{"id":5561,"date":"2024-12-10T12:12:04","date_gmt":"2024-12-10T11:12:04","guid":{"rendered":"https:\/\/www.rivistaeco.com\/?p=5561"},"modified":"2024-12-10T12:12:04","modified_gmt":"2024-12-10T11:12:04","slug":"green-and-fair-guidelines-for-a-feasible-transition","status":"publish","type":"post","link":"https:\/\/www.rivistaeco.com\/en\/2024\/12\/10\/green-and-fair-guidelines-for-a-feasible-transition\/","title":{"rendered":"Green and Fair: Guidelines for a Feasible Transition"},"content":{"rendered":"

The green transition is inevitable. However, the numerous crises that have affected\u2014and continue to affect\u2014workers and families have led many to view environmental policies as a threat rather than as an opportunity to improve the health of the planet and its inhabitants. To sustain support for environmental measures, a range of interventions is needed to assist those who will be most impacted.<\/span><\/i><\/p>\n

The world is at a pivotal moment in the fight against climate change. The devastating effects of climate change are now clearly visible in many parts of the planet. Although governments are under pressure to accelerate the green transition, there are rising concerns that environmental policies\u2014though necessary\u2014might place significant financial burdens on many people. The shift toward zero emissions is occurring within a socioeconomic context marked by multiple crises and profound structural transformations that have severely challenged workers and businesses alike: the global financial crisis, the COVID-19 pandemic, and, more recently, rising costs of living. Additionally, the labor market and society are experiencing the pressures of the digital transformation and rapid demographic shifts, such as the retirement of the baby boomer generation in many OECD countries.<\/span><\/p>\n

Climate Change Reduces GDP<\/b><\/h3>\n

Without drastic actions, climate change will have severe consequences for future generations. According to the IPCC (Intergovernmental Panel on Climate Change), maintaining current emission levels through 2030 will almost certainly eliminate the chance of containing global warming to below 1.5 degrees. However, the costs of climate change are already immense: recent estimates indicate that global per capita GDP would be 37% higher today if global warming had not occurred since 1960. These estimates do not take into account effects on other aspects of well-being. For instance, an OECD survey reveals that 8% of workers in Italy report experiencing severe heat discomfort for more than half of their working hours, an issue that particularly affects outdoor workers and those in heavy or process industries, with significant negative impacts on health and productivity. A recent study estimates that on days when temperatures exceed 40 degrees, the risk of workplace accidents rises by more than 10% compared to days with normal temperatures.<\/span><\/p>\n

Where Opposition to Mitigation Policies Originates<\/b><\/h3>\n

Public awareness of the costs of climate change has recently increased, yet the most ambitious mitigation policies still encounter opposition, risking potential abandonment. Unlike other major changes\u2014such as digital and demographic shifts, often perceived as \u201cexternal\u201d forces\u2014the fight against climate change depends on political choices. Governments decide how and when to implement mitigation measures, which need to account for the costs of transition. Therefore, it is essential that strategies for transitioning to zero emissions be designed with consideration for their effects on the labor market and society. In other words, interventions should be proactive rather than reactive, addressing potential job and income losses before they occur. This approach not only \u201cdoes the right thing\u201d but also helps secure the long-term public support necessary for the success of the zero-emission transition.<\/span><\/p>\n

An OECD study shows that public support for climate mitigation policies depends on three main factors: perceptions of the effectiveness of adopted policies in reducing emissions, the benefits and costs these policies might generate, and perceptions of their impact on vulnerable households. Unequal distribution of the burdens and opportunities associated with the transition heightens opposition to climate action (see figure below).<\/span><\/p>\n

Support for Climate Policies Depends on Perceived Gains and Losses<\/b><\/h4>\n

Effect of Beliefs and Perceptions (Indicated) on Support (Percentage) for a Carbon Tax with Cash Transfers<\/span><\/i><\/p>\n

\"\"
Note: Regression results where the dependent variable is support for the policy package and standardized variables measuring beliefs and perceptions are the independent variables. Dark green columns refer to variables measuring expected gains and losses. Estimates are controlled for individual and country characteristics. Interpretation: Believing that low-income households would lose reduces public support for an increase in carbon taxes offset by an equal cash transfer by 3.8%. Source: Adapted from Dechezlepr\u00eatre, A. et al. (2022), \u201cFighting Climate Change: International Attitudes toward Climate Policies.\u201d<\/figcaption><\/figure>\n

Employment Effects<\/b><\/h3>\n

A key element in assessing the green transition\u2019s impact on the labor market is defining \u201cgreen jobs.\u201d In the 2024 edition of the OECD Employment Outlook, we include in this category all jobs that could expand as a result of the transition (see box). This approach considers not only jobs that directly contribute to emissions reduction\u2014\u201cgreen jobs\u201d\u2014but also those producing goods and services essential to supporting low-emission activities.<\/span><\/p>\n

Our analysis offers reasons for optimism. In OECD countries, approximately 20% of workers are employed in \u201cjobs promoted by the green transition,\u201d according to this broad definition, signaling that the process is well underway (see figure below). In the near term, it seems unlikely that the transition will significantly impact overall employment levels. Most macroeconomic simulations indicate nearly neutral effects (close to zero) in the short term (by 2030), while in the longer term, the effects could even be positive.<\/span><\/p>\n

One in Five Workers Is Employed in a Green Activity (OECD Countries)<\/b><\/h4>\n
\"\"
Note: Data refers to the 2015\u20132019 average, except for Canada (2017\u20132019) and New Zealand (2018). OECD: unweighted average. Interpretation: In Italy, 19.5% of workers are employed in jobs promoted by the green transition, and 5.1% work in high-CO2-emission sectors. Source: OECD Employment Outlook, 2024, Chapter 2.<\/figcaption><\/figure>\n

Redistribution of Jobs Across Sectors<\/b><\/h3>\n

Significant job redistribution across sectors, professions, and local labor markets is anticipated. Many activities will expand, especially those directly contributing to emissions reduction and those providing essential goods and services for low-emission activities. Conversely, high-emission industries will inevitably need to restructure, downsize, or even phase out. Sectors like fossil fuel energy supply, transportation, mining, and high-energy-intensive manufacturing account for 80% of global emissions but only 7% of employment. OECD projections for the EU suggest that by 2030, employment in these industries could decline by 13% if planned policies are fully implemented, a reduction 9 percentage points greater than under a business-as-usual scenario.<\/span><\/p>\n

For workers in these industries, the green transition poses particularly severe challenges. In OECD countries, the income of those laid off in high-emission sectors decreases by 24% over five years compared to individuals dismissed from low-emission sectors (see figure below). When these workers find new employment, it is often within another high-emission sector. However, for nearly every job lost in high-emission activities, there are potential alternatives in expanding sectors, requiring only limited retraining.<\/span><\/p>\n

High-emission industries are often concentrated in specific, mostly rural, areas. In contrast, green jobs demand higher skills and are predominantly based in urban areas. Without targeted interventions, less-skilled workers and their families, who tend to live in high-CO2 regions, are likely to bear most of the transition\u2019s burdens, while urban and highly skilled workers have more opportunities to benefit.<\/span><\/p>\n

Workers Laid Off from High-Emission Firms Face Higher Costs<\/b><\/h4>\n
\"\"
Note: The figure shows annual income losses for laid-off workers compared to non-laid-off peers, three years before the collective layoff (a point sufficiently before company difficulties). Year 0 is the year of layoff. Bars indicate a 95% confidence interval. Included countries: Australia, Austria, Canada, Denmark, Estonia, Finland, Germany, Hungary, Netherlands, Norway, Portugal, Spain, France, and Sweden. Interpretation: On average, one year post-layoff, income loss for workers laid off from high-emission sectors is 58%, compared to 52% for those from other sectors, a 12% difference. Six years post-layoff, former high-emission sector workers earn 26% less than they would have without the layoff, compared to an 18% loss in other sectors\u2014a cumulative 24% greater loss for high-emission sector workers. Source: OECD Employment Outlook 2024, Chapter 3.<\/figcaption><\/figure>\n

The Role of Vocational Training<\/b><\/h3>\n

How can we address the social and employment impacts of the zero-emission transition? First, it is crucial to gather more information on potential new jobs and the skills they require to shape training policies that meet new demands. A promising approach is the systematic use of Skills Anticipation and Assessment (SAA) tools, which enable employment services and other actors involved in labor transitions to develop targeted training paths that align with emerging job opportunities.<\/span><\/p>\n

Today, however, only a minority of OECD countries incorporate green transition perspectives into their SAA exercises and offer dedicated financial support for training workers in new green jobs. Additionally, workers in high-CO2-emission sectors\u2014who face the highest risk of unemployment\u2014tend to participate in continuing education at lower rates than other workers.<\/span><\/p>\n

In Italy, the new Support for Training and Work program provides additional incentives for training but should be more focused on addressing labor shortages in sectors crucial to the zero-emission transition. Quality certification mechanisms for training programs should also become standard across all regions. Ultimately, strengthening career guidance to make it more accessible and effective is essential for helping workers seize opportunities in new \u201cgreen\u201d careers.<\/span><\/p>\n

Lower Wages in Green Jobs<\/b><\/h3>\n

Another issue warrants attention. Data indicate that new jobs created by the green transition tend to offer lower wages and poorer working conditions for low- and medium-skilled workers compared to high-emission sectors. Collective bargaining and social dialogue play a vital role in ensuring an orderly transition, as demonstrated by some Italian union initiatives, particularly in the metalworking sector. The challenge is that workers in low-emission sectors tend to be less represented in collective bargaining than those in high-emission industries, often dominated by large companies. Sweden provides an example through its Job Security Councils, managed jointly by employers and unions. These councils participate actively at all stages of company restructuring, often intervening before layoffs occur and significantly reducing unemployment duration between jobs. For workers facing substantial wage reductions, temporary wage supplements could also be considered. However, access to these subsidies should be time-limited, with benefits gradually decreasing.<\/span><\/p>\n

A further challenge in the green transition is the geographic concentration of high-emission industries in specific areas, where their decline impacts entire communities. Local development policies are essential for supporting these areas. It is no coincidence that the 2022 U.S. Inflation Reduction Act directs investments and incentives toward these regions to facilitate the zero-emission transition. If areas most affected by the decline of high-emission industries cannot attract new green activities, complementary policies may help facilitate geographic mobility for workers, combining financial incentives with job search assistance, housing support, and childcare services.<\/span><\/p>\n

The Carbon Tax<\/b><\/h3>\n

Protecting not only workers but also consumers is essential during the green transition. Carbon taxes are among the most effective tools for encouraging change, especially in Europe, as they both generate public resources for green infrastructure investments and incentivize behavioral shifts. However, these taxes impact basic expenses such as energy, transportation, and food, which are significant costs for low-income households. Allocating part of the revenue from carbon taxes to the most vulnerable households would allow governments to mitigate the negative effects while retaining fiscal flexibility to fund other key interventions, such as incentivizing household investments in energy efficiency and supporting workers and communities affected by job losses.<\/span><\/p>\n

The time has come to renew the commitment made in Paris in 2015: to double global efforts to limit emissions and global warming. However, to ensure that this transition is both feasible and sustainable over the long term, it is crucial to make it fair\u2014not just in principle, but through tangible support policies for those who bear the greatest costs.<\/span><\/p>\n

\n

Jobs Promoted by the Green Transition<\/b><\/h3>\n

There is no universally accepted definition of \u201cgreen job\u201d in economic literature. Generally, many researchers and institutions define as \u201cgreen\u201d any job that helps preserve or enhance environmental quality and sustain or reduce greenhouse gas emissions. Operationally, however, it is often challenging to draw a clear line between green and non-green jobs. Classic examples of green jobs include forest engineers or technicians specializing in the installation and management of renewable energy production systems. If the goal is to identify jobs that will develop due to the transition, it is necessary to also consider all roles where demand will grow with low-emission activities, as they produce essential goods and services supporting those activities. For example, given the high need for new infrastructure, many construction jobs fall into this category.<\/span><\/p>\n

In the 2024 edition of the OECD Employment Outlook, we adopt a broad definition of green jobs, including both new and existing roles whose demand will increase due to the green transition. We use the concept of \u201cjobs promoted by the green transition.\u201d This definition is based on the American occupational taxonomy developed by O*NET, a program sponsored by the U.S. Department of Labor.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

The green transition is inevitable. 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