The green transition will profoundly impact Europe’s labour markets. While a few regions will be exposed to job losses in fossil fuel-reliant sectors like coal mining, the energy transition will keep generating demand for low- and medium-skilled roles, write Maroš Šefčovič and Bertrand Piccard.
Maroš Šefčovič is vice-president of the European Commission in charge of interinstitutional relations and foresight. Bertrand Piccard is the initiator behind Solar Impulse, the very first airplane capable of flying perpetually without fuel
It was not so long ago that the notion of an ecological transition remained intangible. We were unsure what it would look like or what it would require. All that has changed.
The decision by the European Commission President von der Leyen – the European Green Deal strategy towards “net-zero” by 2050 – has shown the EU’s “green” global leadership and changed the way the climate question is regarded. It has forced governments worldwide to re-assess what an ecological transition will mean for their economies and political relationships.
With the direction of travel set, we have embarked on a long and bumpy, but exciting journey commonly known as the “green transition”. It is worth reminding that this shift is unprecedented for any government: it has never been done before, and we are learning along the way.
It is not dissimilar to flying a solar aircraft, where you at times fly blind and rely on your instruments to feed the correct information so that you can keep on course to your goal. We need to predict turbulences and be best prepared to navigate through the crucial transitions Europe has embarked upon.
But first we need those instruments. This is why President von der Leyen made the bold decision to embed Strategic Foresight into EU policymaking and have the first-ever College member in charge of it.
Foresight tells us the inconvenient truth that the green transition, as it is the case for most epochal shifts, will not be easy. It dispels the myth that this journey will be for free.
The European Green Deal can be the EU’s growth strategy, benefitting our economies and quality of life, but will require substantial targeted investments and the right policy mix to succeed.
For instance, the risk of carbon leakage – the global relocation of energy-intensive sectors to regions with lower environmental standards – is a major concern, to be managed with the right policy mechanisms.
On the other hand, clean investments are now able to provide attractive returns, and this is in large part because technology is no longer the obstacle it once was. The effort by the Solar Impulse Foundation to identify more than 1,000 solutions that protect the environment and spur growth by generating profit proves just that.
Taken together and implemented across all sectors, these solutions can make a difference for both Europe’s competitiveness and climate action.
From packaging material based on sustainable wood fibres in Finland; to aerogels superinsulation products from recycled construction and demolition waste in France; to sodium-based solutions to mitigate pollutants for air emission control in Belgium.
Each solution grabs a few percent of dangerous emissions, reduces electricity needs by a few kilowatts, and brings us closer to the moment when we can leave fossil fuels in the ground.
This is why the Commission’s 2022 Strategic Foresight Report will focus on the “twinning”, that is how the technological transition can help us reinforce the green one – and vice versa.
Another silver lining comes from the Commission’s recent Green Jobs foresight study.
The green transition will profoundly impact Europe’s labour markets. For example, more ambitious climate targets alone, delivering a 55% reduction in greenhouse gas emissions in the EU by 2030, could lead to a net increase of up to 884,000 jobs.
This is positive, considering that entire industries may be left behind. It suggests that the green transition is mainly about managing the transformation across sectors and regions, as employment is redirected towards cleaner production to fuel Europe’s flight towards the net-zero.
Regionally, the job impact of the green transition will be unevenly spread: a few regions will be exposed to job losses in fossil fuel-based sectors, like coal mining and manufactured fuels, due to the need to promote alternative fuels in transportation. Other regions will see new jobs in renewable energy and the Circular Economy.
Interestingly, if all countries stick to the climate targets in the Paris Agreement, the Fit-for-55 Package could also lead to employment gains in energy-intensive industries, such as a 7 % rise in the ferrous metals sector.
An important conclusion of the foresight study is related to skills: the green transition is not only about jobs for highly-skilled people, with all the rest automated. Rather, it will keep generating demand for low- and medium-skilled roles in the renewable energy sector, with 75% of employees expected to be manual workers and technicians in 2050.
As such, technological skills will be in high demand, and education and retraining will be key to ensure successful job migration from polluting activities to growing green sectors.
In conclusion, the significant economic shift related to the green transition in Europe will come – if Foresight guides our future policies, including re-skilling – with a net gain in jobs in a fair sectoral and regional rebalancing.
Moreover, new technologies can fuel our journey towards net-zero in a cost-effective manner.
That really is an extraordinary silver lining unveiled by Strategic Foresight, which, bouncing forward from inconvenient truths ahead, lends credence to the idea that, if we prepare for and manage the turbulences ahead, the green transition can be the market opportunity of the century.