By Dave Elliott
Green sector employment accounts for as many as 3.4 million jobs in the EU, or 1.7% of all paid employment, more than car manufacturing or pharmaceuticals. Will that expand?
A new UKERC report, “Low Carbon Jobs”, asks if policy-driven expansion of green energy actually creates jobs, taking account both of jobs created and jobs displaced, particularly when the policies in question require subsidies that are paid for through consumer bills or taxes. www.ukerc.ac.uk/support/Low+Carbon+Jobs
The report reviews over 90 existing studies and concludes that there can be positive net job gains from expansion, since renewables and energy efficiency are more labour-intensive than fossil-fired generation, both in terms of short-term construction jobs and average plant lifetime jobs: “If investment in new power generation is needed, renewable and energy efficiency can contribute to short-term job creation so long as the economy is experiencing an output gap, such as is the case during and shortly after recession”.
However, at the micro economic level, it’s more complicated. As the report notes, some argue that “even if one can create green jobs in the short-run, is it a good thing to have high employment factors per unit of output? Does high labour intensity not simply imply an inefficient and more expensive energy sector which will be a drag on the economy in the long-term?” It says ‘This critique is really aimed at the rather one-dimensional nature of much of the green-jobs literature. Taken at face value, it seems a fair criticism, since much of the green jobs literature tends to ignore these long-term questions of efficiency. On the other hand, the most important dynamic efficiency benefits of green energy investments lie outside the domain of the labour market in the economics of transition towards a low carbon economy. Viewed from this angle, the disagreement between the pro- and anti- literature essentially boils down to a difference of opinion about the need for such a transition, its timing, and the role of RE. Those supporting such a transition also point to dynamic effects that could come into play, but in a positive way”.
As an example, the report quotes Fankhauser et al: “In the longer term, climate change policy will unleash a wave of innovation as firms reposition themselves and seek to exploit carbon opportunities. Jobs will be created in research and the development of low-carbon technologies. Over time, the results of this research will generate new investment and further job opportunities. What these will be and how this would differ from what would have happened without these policies is hard to predict. What is not in doubt, however, is the powerful effect that innovation and technical change can have on productivity and economic growth.” Fankhauser, S, Sehlleier, F & Stern, N 2008 Climate change, innovation and jobs. Climate Policy, 8, 421-429.
Even so, the report says that “in the long-term, assuming full employment, high labour intensity is not in itself a desirable quality, and ‘green jobs’ is not a particularly useful prism through which to view the benefits of renewable energy and energy efficiency investment. What matters in the long-term is overall economic efficiency, taking into account environmental externalities, the desired structure of the economy, and the dynamics of technology development pathways. In other words, the proper domain for the debate about the long-term role of renewable energy and energy efficiency is the wider framework of energy and environmental policy, not a narrow analysis of green job impacts.”
This seems reasonable as a general statement and the report does do well in trying to clarify the differences and confusions between quantitative job numbers and qualitative strategic issues. However, while it’s hard to assess the knock-on impacts in the wider economy of technological change, some confusions persist. For example, it’s not automatic that, longer term, new renewable and energy-efficient technologies will require continuing subsidies and lead to higher costs, and so reduce economic efficiency. Indeed, as the quote above suggests, it could lead to economic benefits. Certainly, many claim that green energy systems will make economies more efficient since the need to use increasingly expensive fossil fuel is avoided, as are the short- and longer-term health impacts. And although it may be true that, if there is full employment, investing in job-intense green energy options isn’t needed to increase net employment, it may lead to different kinds of jobs, substituting for work on dangerous and undesirable activities. Isn’t that what we want? Not more jobs, so much as better jobs? That is what I have argued in previous posts on this issue, based on my chapter on “Green Jobs” in Marion Hersh’s “Engineering Ethics”, Springer press, which should be out next year.
The bottom line, I argue, is that, as part of a wider “just transition” strategy, while we do need a quick transition to green jobs, longer term it’s not necessarily just more jobs net we need, but to replace employment on unsustainable energy activities . Though, more immediately, we may need to take up the slack where there is unemployment. Initially, of course, that does mean a big quantitative increase in green jobs. That’s certainly what is now being called for by some parts of the UK trade union and labour movement. For example see the new edition of the agitational booklet “1 million climate jobs”, produced by the Campaign against Climate Change: www.climate-change-jobs.org/And in the USA, Obama has launched a new Federal initiative offering training in solar installation for 50,000 armed service veterans, a small step in the right direction. But longer term, once the initial flurry of new net job creation is over, the question arises, can these jobs be sustained and yet more created? For example, if and when we get to near 100% renewables, what then?
The backup notes to the Campaign against Climate Change booklet argue single-mindedly for green job creation, and suggest that the 1 million green jobs it proposes can be sustained indefinitely, despite the likely improvement in technology efficiency as the programme unfolds (requiring less work). It says, reasonably enough, that there will be replacement/upgrade jobs to keep the system going, but also that we will go for more advanced renewables, initially harder to harvest sources (e.g. very-deep-sea wind), which will create more jobs. That’s not clear – e.g. floating wind will be cheaper so there will be fewer jobs. Finally it says we will go for more economic growth based on renewables – to sustain jobs. Devotees of stable state economics may not welcome this. Surely we don’t want growth just to keep people working? At some point can’t we shift to lower levels of work – shorter hours, albeit at the same pay? And away from the growth treadmill? Don’t we have to, given the planet’s wider resource and carrying capacity limits?
Some big issues there! For a brave attempt at addressing some of them see: www.resilience.org/stories/2014-11-04/how-to-shrink-the-economy-without-crashing-it-a-ten-point-plan Although some say we can have growth and sustainability: http://newclimateeconomy.report/ and www.ClimatePolicyInitiative.org