Green Jobs and the Challenge of the Ecological Transition

According to the International Labor Organization (ILO), the United Nations agency that deals with the labor market, the transition towards a green economy can act as a new engine for growth thanks to the creation of “good” jobs in both advanced and developing countries. The ILO recognizes, though, that this outcome is certainly not guaranteed, because new green jobs will not automatically also be good jobs. They will become good only through effective action, adopting economic and social policies that help workers adapt to the new market dynamics. This means first of all policies aimed at promoting large-scale investments in education and training systems at the secondary and tertiary levels.

A job can be defined as “green” from two different, complementary standpoints: that of the product, and that of the process. From the standpoint of production, jobs are green when they create goods or provide services that benefit the environment, such as those linked to low environmental impact construction, environmentally sustainable transport, or alternative energy sources. In the first case, the product is green even if the production process is not always completely green. From the standpoint of the process, jobs are green when they contribute to making production respect the environment, for example reducing water consumption, limiting atmospheric pollution, or improving waste recycling services. In the second case, the production process is green if even the product is not always completely green.

“Good” and “decent” jobs (to use ILO terminology) are those which not only respect people’s fundamental rights, but also the rights of workers in terms of workplace safety and salaries, safeguarding the physical and mental integrity of the exercise of work activities. In this sense, a job is good to the extent that it guarantees fair pay, safety in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their worries, to organize and participate in decisions regarding their lives, and equal opportunity and treatment for all women and men.

It follows that not all green jobs are necessarily good. For example, many of the jobs currently linked to the collection and recycling of waste involve recovering raw materials and contributing to alleviating pressure on natural resources. So they are green jobs. However, in various parts of the world they cannot be defined as good, because they are often carried out in dangerous environments and precarious hygiene conditions, provoking serious health damage. Moreover, employment tends to be unstable, unprotected, and poorly paid. For this reason, in order to avoid any misinterpretations during the ecological transition, the ILO has proposed granting a “green stamp” only to jobs that are not only green but also good, that is, jobs that are decent and contribute to improving energy efficiency and raw materials management, limiting greenhouse gas emissions, reducing waste and pollution to a minimum, protecting and restoring ecosystems, and favoring adaptation to the effects of climate change.

From this point of view, the major challenge for the ecological transition in terms of employment is to transform jobs that are currently “black” and “bad” into at least the same number of green and good jobs, without leaving anyone behind. The risk is in fact the emergence of a social backlash, that in the event of a lack of inclusion, could lead to the interruption of the initiatives necessary to combat the adverse effects of climate change. This risk is concrete especially because the most negative effects in terms of employment tend to be concentrated in specific sectors with high intensity of emissions, that in turn are concentrated in limited geographic areas, with political repercussions that are easy to imagine.

According to the Organization for Cooperation and Economic Development (OECD), the goal of reducing emissions can be reached only if governments fully take into account the social aspects associated with the pursuit of ambitious climate policies, guaranteeing an “inclusive transition” based on dialogue and the creation of consent among the interested parties, including through the adoption of active labor policies to guide and facilitate the reallocation of human resources.

The ecological transition will entail a reduction of economic activity and of value added in high-emissions sectors, with a related loss of jobs. The actual offsetting of this loss through reallocation of workers towards alternative jobs in expanding industries (such as renewable energy) will depend on various factors, including labor market flexibility, the alignment of incentives to invest and involve workers in low-emissions sectors, and support measures adopted by governments to facilitate the transition.

The ecological transition will have a significant impact on the need for skills. The ILO and the European Centre for the Development of Vocational Training (CEDEFOP) have found a frequent and significant gap between the skill levels required for work in green sectors and the training standards provided by national professional and tertiary institutions.

To contribute to the public debate on the best way to face these difficulties, in 2016 the International Trade Union Confederation (ITUC) created the Just Transition Centre, that brings together workers and their unions, businesses, governments, communities and civil society to plan a just transition towards a world with low emissions. According to the ITUC, to be just, the ecological transition will have to guarantee the future and means of subsistence of workers and their communities. To do this, it will have to provide decent jobs, social protection, training opportunities, and job security to all workers damaged by the policies aimed at limiting global warming and climate change.

For employment, the ecological transition does represent a great opportunity, but also a great challenge; especially in a labor market like ours, that in recent years had had difficulty absorbing the negative effects of other epochal transitions, such as those linked to globalization, automation, and ICT.

Gianmarco Ottaviano is a Professor of Political Economy at the Bocconi University, where he holds the Achille and Giulia Boroli Chair in European Studies. He writes for il Sole 24 ore and lavoce.info. For Economia & Management he expands on the comments and analyses published in those locations.