Greening The Economies – Transitioning To More Sustainable And Socially Just Societies

Greening The Economies – Transitioning To More Sustainable And Socially Just Societies



This blog post reflects on the climate and environmental crisis and on the transition we need to have to more just, inclusive and environmentally sustainable societies. It reflects on the current economic model and its unsustainable mantra of growth. It looks at the energy transition and the progress towards circular economy, and the industries that are most likely to have the biggest job decline and the biggest job growth.

“May you live in interesting times” – a Chinese proverb says. And we definitely do. The ongoing Covid-19 pandemic is having a grip on societies worldwide and will impact our lives long after the crisis is overcome. While facing a global pandemic, an economic recession is on the horizon, and the most serious threat facing humanity, climate change and ecological collapse. The picture below probably most accurately describes the situation we are having.

“May you live in interesting times” – a Chinese proverb says. And we definitely do. The ongoing Covid-19 pandemic is having a grip on societies worldwide and will impact our lives long after the crisis is overcome. While facing a global pandemic, an economic recession is on the horizon, and the most serious threat facing humanity, climate change and ecological collapse. The picture below probably most accurately describes the situation we are having.

Our economic model has shown that is unsustainable. Economic growth has been the ultimate objective to societies and politicians for decades now, and this addiction to economic growth is directly linked to the emission of greenhouse gases and environmental degradation. The metric with which economic growth is measured is the Gross Domestic Product (GDP) which is a crude measure of progress. When we cut down a forest for timber, GDP goes up. Deforestation is one of the main causes of climate change and is in direct conflict with GDP. When we strip down a mountain for coal, GDP goes up. When natural disaster strike, and hospitals have more visits GDP goes up. GDP simply ignores environmental and social costs and accelerates the climate and environmental crisis, and increases social inequality.

It is clear that we need an economic model that promotes human flourishing in harmony with the planet on which we depend. To achieve sustainability, we truthfully need to rethink our economic model and replace the current economic mantra of growth. Perhaps, it is time for Degrowth[1], which is an idea that has been coined in 1972, the same year when “Limits to growth” was published by the Club of Rome.



Image taken from: https://www.kateraworth.com/2015/12/01/degrowth/

It is encouraging to see that some of the politicians are starting to see that and take concrete actions, like the “well-being budget” of New Zealand. To Prime Minister Jacinda Ardern, the purpose of government spending is not wealth or economic growth, but to ensure citizens’ health and life satisfaction. And that – GDP alone is not providing. GDP does not guarantee improvement to our living standards and does not take into account who benefits and who is left out”[2].

Why does the environment matter for jobs?

From the world of work perspective, some 1.2 billion jobs, or 40 per cent of total world employment, depend directly on ecosystem services[3]. Climate change and other forms of environmental degradation place economic activity and all jobs at risk. Achieving environmental sustainability is also a question of social justice, as women and the most vulnerable people in the world – migrant workers, youth, persons with disabilities, people in poverty, indigenous and tribal peoples and other vulnerable population groups– are particularly exposed to the risks and damages associated with environmental degradation, despite contributing to it the least. This asks whether a job that degrades the environment and harms other workers’ rights and productivity can be considered decent work? Can we consider jobs in the polluting industries decent, since this jeopardizes other jobs and livelihood of millions?

To address environmental degradation and climate change, countries must commit to climate neutrality i.e. net zero carbon dioxide emissions, on a global scale by 2050. By 2050 the world needs to be climate (carbon) neutral. This has been confirmed by the science community and the IPCC[4] reports and has been politically committed with the 2015 Paris Agreement. The long-term goal of the 2015 Paris Agreement is to keep the increase in global average temperature to less than 2°C (1,5°C for coastal and small-island countries) above pre-industrial levels. If the Planet goes above 2°C warming irreversible and unpredictable cycles would occur that will be beyond human control. We have already reached 1°C and if we continue “business as usual” we are on track of surpassing 2°C in 2040.

To stabilize the global warming, we need to stop burning fossil fuels (coal, oil, gas) and cut forests. Moving away from fossil-fuels and building a climate resilient society will inevitably cause job losses in certain sectors as carbon and resource-intensive industries are scaled down. But new opportunities arise in the “greener” sectors, especially the renewable energy and resource-efficiency sectors. This process of “greening” the economy is essentially one in which socio-economic systems are organised in ways that enable society to live well within planetary boundaries. Also, one of the most important roles in “greening” the economies, besides decreasing the GHG emissions, protecting and improving the environment, is also to contribute to social equality and provide a just transition for workers and livelihoods that are engaged in the so called “polluting industries” and provide them with decent work opportunities and income.




Source: European Environment Agency

One example of essential greening of an economy, that protects the environment and contributes to social equality, is the decentralization of the energy system. When we move away from the coal-powered plants and replace them with solar energy, the policies can embrace different choices. One choice can be that a big corporation makes a deal with the Government and invests in solar-power plants to replace the energy that was previous provided by coal. In this case we have employment, but the profits and the governance stay in the hands of few people and is probably accumulated in foreign banks. Other choice would be that the energy system is liberalized and decentralized, which allows for the citizens, micro and small enterprises to produce energy from the sun by installing solar panels on their rooftops, yards, or other available spaces. They can use the produced energy for their own needs and/or sell it to the electricity market and gain income/profits. In this case, ordinary people and small enterprises benefit from the energy system and the income stays locally and is diversified among many ordinary citizens. The second choice is the true process of “greening” the economies.

Green jobs also carry the social element in its core, as every job that helps restore and advance the environment should be a high-quality job, or in the words of ILO, it should be decent. Decent jobs are productive and deliver a fair income; provide security in the workplace and social protection for the workers and their families; offer better prospects for personal development and encourage social integration; give people the freedom to express their concerns, to organize and to participate in decisions that affect their lives; and guarantee equal opportunities and equal treatment for all.

Cleaner and circular also means more jobs

In the transition process from fossil fuels to renewable energies, the International Energy Agency (IEA) created a 2°C scenario and the International Labor Organization projected it in the perspective of jobs in the energy sectors. The findings showed that a transition from “dirty” to “clean” energy will see a net increase of approximately 18 million jobs across the world by 2030. Employment creation will be driven by the higher demand of renewable energy sources in comparison with electricity produced from fossil fuel sources, and the employment demand of the entire value chain associated with renewable energy and electric vehicles and construction. The table below shows the industries that will experience the highest job decline and job growth.



Source: ILO, “Greening with jobs – World Employment and Social Outlook 2018”, Table 2.1, page 44

Besides the energy sector, advancing towards a circular economy will also create jobs. Resource-intensive sectors such as mining and manufacturing will also undergo substantial changes on the path towards sustainability. The circular economy, as an alternative, instead of produce-use-throw, is based on the principle of resource-efficiency and produce-use-service-reuse. One of its principles is to reduce the extraction of raw materials and to rely instead on reuse, repair and recycling. In a circular economy, the aim is that the products are designed to have longer lives and to be repaired, reused or recycled.

Circular economy scenario under 5% annual increase in recycling rates replacing the direct extraction of the primary resources, explores the employment impact in the table below. It is equivalent to around 6 million more jobs in an economy that adopts the principles of the circular economy, such as recycling and the service economy. The table below shows the sectors most affected by the transition to a circular economy.

Source: ILO, “Greening with jobs – World Employment and Social Outlook 2018”, Table 2.4, page 52

These scenarios confirm that the process of greening the economies will lead to net-employment gains. We can be happy about it, since it promises more jobs for everyone. But! There is another serious concern in the world of work that we need to be aware of. The automatization of work and the advancement in the artificial intelligence (AI) poses a threat to many jobs, especially the vocational and low-qualified ones[5].

Of one thing we can be certain – change is constant. And it will accelerate. 

Seeing the ILO projections in the tables, one can conclude that vocational and low-qualified workers are one of the most dominant profiles that will be needed in the “greening” process. The recycling and the clean energy industries will not be immune to these developments and probably this topic on “How the automatization and AI will influence the greening of economies and jobs?” is a subject for another blog post.

What is certain is change. Change will be more rapid and unexpected and one of the most serious challenges we will face is certainly psychological. Imagine learning, studying and preparing for years for a career that will no longer exist in the future. It has been stripped away by automatization and the AI revolution or the geographical location where your dream job was became vulnerable to the climate consequences and people became climate refugees. We will need to be able to mentally cope with these changes. The ability to stay psychologically fit, to reinvent ourselves, to rethink our purpose, is needed like never before. To cope with such challenges, mental stability and psychological resilience will probably be one of the most important traits in the 21st century.

[1] https://www.degrowth.info/en/what-is-degrowth/

[2] https://www.weforum.org/agenda/2019/05/new-zealand-is-publishing-its-first-well-being-budget/

[3] International Labor Organization, “Greening with jobs – World Employment and Social Outlook 2018”, page 7

[4] Intergovernmental Panel on Climate Change that assess the science related to climate change www.ipcc.ch

[5] Sterling, A. “Millions of jobs have been lost to automatization”, Forbes, June 2019



Source:
https://bit.ly/2MaZgqs

 







Antonio Jovanovski

Antonio Jovanovski holds a Master’s degree of Science in Environmental Economy and Sustainable Development.

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