Working towards sustainable development. Opportunities for decent work and social inclusion in a green economy. Studie der International Labour Organization, 2012 (pdf, 1.81 MB, EN)

Working towards sustainable development. Opportunities for decent work and social inclusion in a green economy. Studie der International Labour Organization, 2012 (pdf, 1.81 MB, EN)
Working towards sustainable development
Working towards sustainable development
Opportunities for decent work and social inclusion
in a green economy
INTERNATIONAL
INSTITUTE FOR LABOUR STUDIES
Copyright © International Labour Organization 2012
First published 2012
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Working towards sustainable development : opportunities for decent work and social inclusion in a green economy / International
Labour Office. - Geneva: ILO, 2012
xxi, 185 p.
ISBN: 978-92-2-126378-4 (print)
ISBN: 978-92-2-126379-1 (web pdf )
International Labour Office
sustainable development / economic growth / employment creation / green jobs
03.02.3
Also available in Spanish, Trabajando hacia un desarrollo sostenible (ISBN 978-92-2-326378-2) Geneva, 2012.
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SCR
Working towards sustainable development:
Opportunities for decent work and social inclusion in a green economy
This report is the result of the collaborative efforts of the Green Jobs Initiative (which includes UNEP, ILO,
IOE and ITUC) and the International Institute for Labour Studies of ILO.
It has been prepared by: Peter Poschen, Ana Lucía Iturriza and Xinxing Li (Employment Sector); Steven
Tobin, Elodie Dessors and Daniel Samaan (International Institute for Labour Studies); and Michael Renner
(external collaborator) with contributions from Cornis Van Der Lugt (external collaborator). The drafting team
benefited from the valuable comments and suggestions from members of the Initiative, notably Janet Asherson
(IOE), Anabella Rosemberg (ITUC) and Steven Stone (UNEP).
The report has been coordinated by Peter Poschen and Steven Tobin. The coordinators are grateful for the
guidance and direction given by José Manuel Salazar-Xirinachs (Executive Director of the Employment Sector)
and Raymond Torres (Director of the International Institute for Labour Studies).
Excellent feedback on earlier versions of the report was provided by ILO colleagues including Philippe
Egger, Ekkehard Ernst, Christine Hofmann, David Hunter, Konstantinos Papadakis, Aurelio Parisotto,
Kees Van Der Ree, David Seligson, Valentina Stoevska, Olga Strietska-Ilina, Brandt Wagner and Edmundo
de Werna Magalhaes.
Helpful comments and suggestions were also received from Aleksandr V. Gevorkyan (Senior Economist, New
York City Council); Benny Popp (Economist, University of Osnabrück) and three anonymous peer reviewers.
v
Executive Summary
The current development model is unsustainable,
not only environmentally, but also from economic,
employment and social perspectives…
The resource-intensive development model of the past
will lead to rising costs, loss of productivity and disruption
of economic activity. Estimates based on the ILO Global
Economic Linkages (GEL) model suggest that in a business-as-usual scenario, productivity levels in 2030 would
be 2.4 per cent lower than today and 7.2 per cent lower
by 2050. This is in line with the findings of a number of
studies assessing economic damages due to environmental
degradation and loss of basic ecosystem services (see
Chapter 1).
The current development model is also inefficient as
regards productive employment and decent work. It has
failed to create sufficient decent work opportunities and
has generated increasing systemic instability induced by
the financial sector, which has high costs for enterprises
and workers in the real economy.
There are also important socials costs associated with
environmental degradation above and beyond those associated with job destruction and income loss resulting
from the overuse of natural resources. If the business-asusual scenario continues to dominate, wasteful
production and consumption patterns along with continued soil degradation, deforestation, overfishing and
climate change will result in increasing water shortages
and escalating prices for food, energy and other commodities. This will exacerbate problems such as poverty
and inequality as well as malnutrition and food insecurity.
This is due to the fact that low-income households spend
a significant and disproportionate share of income on energy and food and related items. These trends will impose
massive social and economic costs.
… whereas a greener economy and more sustainable enterprises is creating tens of millions of
green jobs…
The report documents evidence that for countries at all
levels of development the drive towards environmental
sustainability and greener economies is gaining momentum. Already, tens of millions of green jobs have been
created. For example, employment in environmental
goods and services in the United States in 2010 was 3.1
million (2.4 per cent) and growing. Similar levels and dynamics are seen in other countries, such as in Brazil, where
2.9 million green jobs (6.6 per cent of formal employment) were recorded in 2010 in sectors aimed at reducing
environmental harms.
Job growth has been particularly strong in the renewable energy sector, increasing globally at a pace of 21 per
cent per annum. As a result, renewables now employ close
to 5 million workers – more than double the number employed only a few years ago (see Chapter 5). Energy
efficiency is another important source of job creation,
particularly in the construction industry, which has been
hit particularly hard by the financial and economic crisis
(see Chapter 8). Large numbers of jobs also exist in the
area of ecosystem services: for example, in the European
Union, 14.6 million direct and indirect jobs protect biodiversity and rehabilitate natural resources and forests.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
And China has created over a million new jobs in its
forestry programmes.
…and there is significant potential to create more
decent work opportunities…
viii
The shift to a greener economy is creating employment
across a range of sectors. In fact, an increasing number
of assessments are showing that net gains are possible.
Most studies indicate gains in the order of 0.5–2 per
cent, which would translate into 15–60 million additional jobs globally. More ambitious green growth
strategies could result in even stronger net gains in employment by triggering a wave of new investment into
the real economy, as suggested by studies of Australia
and Germany (see Chapter 10). A significant potential
also exists in emerging and developing countries. For example, targeted international investment of US$30
billion per year into reduced deforestation and degradation of forests (REDD+) could sustain up to 8 million
additional full-time workers in developing countries (see
Chapter 3).
Concerns over job losses caused by greening the
economy are therefore exaggerated. While job losses are
expected to occur in some parts of the economy, the
numbers appear to be manageable. In industrialized
countries, which stand to see the biggest impacts on their
labour markets, the transition between sectors of the
economy is likely to affect only 1 per cent of the workforce. Movements of workers between enterprises are
expected to be ten times larger, but would still be small
compared with the shifts associated with globalization
experienced in recent decades.
An important finding from the modelling undertaken for this report is that outcomes for employment
and incomes are largely determined by the policy instruments used and the institutions which implement them,
rather than being an inherent part of the shift to a greener
economy.
Outcomes are also country specific, pointing to the
need for more country-level assessment. While this has
started, with support from ILO and others, most analyses
are still for developed economies or a few emerging
economies. However, net gains in employment are likely
to be highest in emerging and developing countries; these
countries have the opportunity to leapfrog in a number
of areas, notably as regards the use of technology,
thus avoiding the costs associated with replacing
obsolete legacy infrastructure and related employment
substitution.
… and improve social inclusion.
A greener economy can also make a major contribution
to poverty reduction by improving incomes. This is particularly the case for over 400 million smallholder farmers
in developing countries. There have been some encouraging examples. Investment to enable farmers to adopt
practices that have a much lower environmental impact
but which are more productive and provide better market
access has been very effective in countries such as Uganda
and Madagascar (see Chapter 2). Similar outcomes are
possible for 15–20 million informal waste pickers currently in precarious and hazardous jobs with incomes
often below the poverty level. Experiences from
Colombia, Brazil and other countries show that the formalization and organization of these workers and their
integration into a modern recycling system has significant
economic, social and environmental benefits (see
Chapter 7).
Greening the economy also offers the opportunity to
improve social inclusion by addressing the challenges of
energy poverty and of lack of access to energy. In most
countries, the poor spend a disproportionate share of their
income on energy and an even higher share on related
goods and services, such as food and transport. For instance, in much of Asia, Africa, Latin America and parts
of Europe, the proportion of expenditure on energy by
poor households is three times – and can be as much as
20 times – that of richer households. The situation is aggravated by the fact that many poor households have no
access to energy-efficient housing or transport.
Some 1.3 billion people in developing countries have
no access to clean modern energy at all. Greater efforts
to promote affordable renewable energy can make a major
contribution to overcoming energy poverty and the lack
of access to energy. Moreover, they can also create badly
needed employment and income opportunities in the
production of energy and even more so through the use
of that energy. For instance, a programme in Bangladesh
initiated by the NGO Grameen Shakti has taken clean
electricity to over 1.2 million poor rural families through
small solar household panels, providing direct employment to several thousand women and some 60,000 new
jobs in downstream activities, particularly for youth (see
Chapter 5). A greener economy could thereby also lead
to greater gender equality. Women would be the main
beneficiaries from improvements in smallholder agriculture and in recycling, for example. Access to clean energy,
to energy-efficient social housing and to transport would
all alleviate current burdens on women and open up new
opportunities.
Executive Summary
In the context of a greener economy, it is important to note that transformation will be greatest
among a number of key sectors.
While changes in employment and incomes will be seen
throughout the economy, eight key sectors will undergo
major changes: agriculture, forestry, fishing, energy, resource-intensive manufacturing, recycling, buildings and
transport (see Chapters 2 through 9). Between them these
sectors employ around about 1.5 billion workers worldwide, approximately half of the global workforce.
● Agriculture is the largest employer globally with over
a billion workers, including a large number of poor
rural workers and subsistence farmers (notably
women). Strong investment in skills, rural infrastructure and organization to enable smallholder farmers
to adopt greener and more productive farming practices could boost food security, lift tens of millions out
of poverty and prevent accelerated rural–urban migration (see Chapter 2).
● In the forest industries, unsustainable practices have already led to job losses, sometimes on a very large scale.
Sustainable forest management provides both essential
environmental services and renewable raw material to
other sectors while also providing quality jobs (see
Chapter 3).
● The fisheries sector faces a major, albeit temporary,
transition challenge due to overfishing. Of particular
concern is that the vast majority (95 per cent) of the
45 million workers employed in fishing are mostly
poor artisanal coastal fishermen in developing countries. Temporary reductions of catch are needed in
many fisheries to avoid the collapse of fish stocks and
to allow their recovery for sustainable food production
and employment (see Chapter 4).
● In the energy sector, rapid employment growth in renewable energy, improvements in energy efficiency
and enhanced access to energy can lead to major gains
in employment and income opportunities, as well as
in significant environmental benefits. Fossil energy
generation is likely to see job losses, calling for policies
that ensure a just transition for workers and communities (see Chapter 5).
● Resource-intensive manufacturing has seen a decline in
employment for decades, in which the environment
has been a minor factor. However, a green economy
could increase demand for products from these industries, contributing to improved competitiveness while
protecting existing employment and even creating new
jobs (see Chapter 6).
● Recycling is critical for energy efficiency, avoidance of
waste, safe treatment of hazardous waste and recovery
of valuable materials. Employment could be increased
significantly by improving recycling rates, and there is
major potential to improve social inclusion and reduce
poverty through formalization, as the majority of
waste pickers, notably women and child labourers, are
concentrated in informal employment (Chapter 7).
● Energy- and resource-efficient buildings have the
largest potential to reduce greenhouse gas emissions
and resource use. There are also significant opportunities for employment creation in new, green buildings, and even more opportunities in retrofitting the
large estate of older buildings. A successful strategy
hinges on skills development and on preparation and
upgrading among the small and medium-sized
enterprises (SMEs) which dominate the sector (see
Chapter 8).
● Transport is central to the functioning of modern
economies and for development, but it has also been
the most rapidly growing source of greenhouse gas
emissions. However, substantial gains in employment
can be created by a shift to mass transportation and to
more energy-efficient vehicles (see Chapter 9).
To ensure that the momentum towards a greener
economy is sustained, and a new sustainable development
model realized, a comprehensive policy approach is
needed. The approach must recognize the country-specific and sector-specific challenges while ensuring that
opportunities for decent work and social inclusion are
achieved. This requires a three-pillared strategy:
1. Provide the right mix of incentive
structures and support to encourage
the greening of the economy
A greener economy requires sustainable production and
consumption patterns; these will trigger modifications to
practices in most enterprises and structural change across
the economy. The shift needs to create not only the incentives for enterprises to invest but also the capability
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
for them to adopt the new mode of production. A greener
economy can be mutually reinforcing, with good labour
market and social development outcomes, but this is not
automatic. It will hinge on the right policies and on institutions capable of implementing them.
x
● Introduce environmental tax reform, in particular
an eco-tax, that shifts the burden to resource use and
pollution and away from labour. A successful strategy
is one that links the dimensions of sustainable development in a way that generates positive outcomes in
all areas. For instance, the GEL model indicates that
if an eco-tax is combined with employment-support
measures, by 2020 multi-factor productivity would be
1.5 per cent higher than if green taxes are not used to
support employment, and by 2050, it would be 5 per
cent higher. Growing evidence indicates that the net
impact on employment is also likely to be positive. At
the global level, if a tax on CO2 emissions was imposed and the resulting revenues were used to cut
labour taxes, then up to 14 million net new jobs could
be created.
● Encourage investment in a greener economy. Efficient product markets will be essential, but current
market signals do not mobilize and channel sufficient
investment in the right direction. Investment has been
grossly insufficient in many areas, including clean and
modern sources of energy, resource-efficient housing,
manufacturing and transport, sustainable smallholder
agriculture and rural infrastructure, and the rehabilitation of ecosystem services. In addition to adjusting
economic incentives, targeted programmes, including
public works schemes, which have already proven effective, will be needed. Transfers such as those envisaged for REDD+ will help developing countries to
create much-needed employment through investment
in environmental services.
● Provide targeted support to enterprises, notably
SMEs. The role of SMEs in the transformation to a
green economy will be critical for successful greening
of the economy, especially in terms of improved employment and social outcomes. Indeed, SMEs provide
two-thirds or more of all employment and are also the
biggest source of new job creation and innovation.
Cooperatives, business associations and partnerships
along value chains can play an important role in supporting SMEs to grow and become sustainable, but
policies which enable SMEs to successfully navigate
the shift to a greener economy and seize the opportu-
nities will be essential. This applies in particular to the
construction, energy, resource-intensive industries,
transport, agriculture and fisheries sectors. The creation and growth of SMEs are particularly sensitive to
a number of factors, including a generally enabling regulatory and institutional environment – one which
makes it easy for businesses to start and grow as part
of the formal economy – and access to information,
green markets, skills programmes, technologies and finance. Environmental regulation, research and development as well as public procurement need to be
mindful of the needs and limitations of SMEs.
2. Ensure that employment, decent work
and social inclusion are integral parts
of any sustainable development strategy
A sustainable development approach which puts people,
the planet and fairness at the core of policy-making is urgently needed and eminently possible, but a greener
economy is not inclusive and socially sustainable by default. Leveraging the opportunities and achieving a just
transition which buffers the downside risks requires social
and labour market policies to complement economic and
environmental policies.
● Put in place social and labour market policies, which
are essential for sustainable development with social
inclusion. Efforts are needed to strengthen social protection, active labour market policies, in particular
skills development, and targeted programmes for disadvantaged groups. Income-support measures such as
unemployment benefit and transfers will be central
and need to be linked with other measures, such as assistance with job search and matching through employment services. While most of these policies are
relevant to any type of structural change in labour
markets, they need to be tailored for the shifts and dynamics that are specific to the greening of enterprises
across the economy and which vary between sectors.
They may also have to be location specific, and combined with economic diversification where labour
market shifts are concentrated in particular regions
and industries. This will require strengthening, and in
some instances creating, labour market institutions.
Unlike in other structural transformations, those associated with a greener economy can to a large extent
be anticipated. Early identification of the opportunities and potential risks and losses is possible with the
Executive Summary
help of assessment methods and modelling tools, as
well as through dialogue with employers’ organizations and trade unions.
● Place emphasis on skills and education policies to facilitate job transition and improve employability.
This is critical because without skilled workers and
competent enterprises the shift to a greener economy
will be neither technically feasible nor economically
viable. A greener economy will see the emergence of
some new occupations, but it will mostly require new
competencies in existing jobs and shifts in demand for
occupations. There is ample evidence from around the
world that it is both possible and necessary to anticipate future skills needs and make adjustments in education and training systems. These can be an
important stepping stone for giving youth, women
and other disadvantaged groups access to the job and
income-generation opportunities that will be created
in a green economy.
● Ensure equitable outcomes for women and men. The
potential positive outcomes for women are no more
automatic than the other social outcomes of greening
the economy. They will require targeted programmes,
and will often need legal reforms, for example of
tenure and ownership rights, equal access to skills and
employment opportunities and more representation
of women in decision-making.
● Leverage social protection for sustainable development. The value of social protection floors in attenuating the impacts of economic shocks on individual
households and the wider economy has been well documented. The same mechanisms at work in periods of
crisis can also facilitate green transitions, for example
by protecting redundant workers as they look for new
opportunities or undergo retraining. They can be an
important part of a package of measures to help the
poor in developing countries affected by climate
change, to pay the poor for environmental services and
to address energy poverty.
The power of social protection to build rural productive
capacity and climate resilience is demonstrated by the
large-scale investments under the National Rural
Employment Guarantee Act in India and the Expanded
Public Works Programmes in South Africa. Successful
examples of income-support schemes paying poor households for environmental services they provide by
protecting forests and marine life are the ‘green grant’
programme in Brazil and the Plan Nacional de Quisqueya
Verde in the Dominican Republic. Furthermore, they
can provide access to energy and energy-efficient housing
as well as serving to compensate for energy price increases
resulting from subsidy reforms or pricing of emissions.
These would otherwise hit poor households disproportionately hard, a fact that has often led to protests and
has stalled necessary reforms in a number of countries.
3. Place social dialogue at the centre of
policy making to improve coherence
and to ensure a successful shift to
a new development model
Social dialogue aims to promote consensus-building
among the major stakeholders. Effective dialogue can help
resolve crucial socio-economic issues and improve economic performance. Given that the transition towards a
greener economy will entail profound changes in production processes and technologies as well as reallocations of
jobs, close cooperation between government and the social partners will be central to the success of this
transformation.
● Social dialogue will lead to better and more sustained outcomes. The programme of renovation of
buildings for energy efficiency in Germany has mobilized about €100 billion over the past decade, making
it the largest such programme worldwide. The programme was originally proposed to the government
by the German trade unions and employers’ organization as a ‘pact for the environment and employment’.
It is reducing energy bills, reducing emissions and providing around 300,000 direct jobs per year. The report
documents many such cases where social dialogue is
making a vital contribution to greening the economy,
ranging from individual enterprises to large-scale national programmes.
● Tripartism will ensure that job quality is at the heart
of a green economy. A greener economy does not automatically create high-quality, decent jobs. Job quality needs to be monitored and measures taken to
ensure labour legislation is applied and that workers
and employers can organize and make use of collective
bargaining. In this regard, International Labour Standards provide both a legal and institutional framework
and practical guidance for work in a greener and more
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
sustainable economy. Similarly, while a green economy
is very likely to be healthier and safer for workers and
the public, care is nonetheless needed to prevent possible new occupational hazards.
xii
● Effective social dialogue is necessary to ensure that
policies are coherent and that change is adopted.
Well-informed and coherent policies that result from
broad support and active commitment among stakeholders and in society will be essential to ensuring that
the shift towards a greener economy is sustainable.
These can only be achieved through active dialogue
with stakeholders, particularly with employers’ organizations and trade unions, as key actors in the labour
market. Major national programmes and policies have,
for example, been implemented with the help of social
dialogue under the Grenelle de l’Environnement in
France, the climate strategy in Brazil and the Green
Economy Accord in South Africa (see Chapter 10).
Sustainable development with social inclusion and a transition to a greener economy is indispensable, but the time
frame is short. This report lays out a wealth of policy lessons, good practices and successful programmes, many
on a large scale. It demonstrates that a green economy
with more and better jobs, poverty reduction and social
inclusion is both necessary and possible. The earlier the
transition to sustainable development and to a greener
economy starts, the more this transition can be managed
to avoid the economic and social cost of disruptive change
and to seize the opportunities for economic and social
development.
Table of Contents
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
vii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
xxi
Chapter 1 Employment and income implications
of a move to a green economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
A.
Environmental sustainability and economic growth:
Issues and considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Employment and social dimensions of climate change. . . . . . . . . . . . . . . . . . . . .
6
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16
Chapter 2 Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
A.
Technical and policy options for greening agriculture . . . . . . . . . . . . . . . . . . . . .
21
B.
Impacts of greening on employment and incomes
in agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
C.
Examples of good practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
D.
Social and labour: Issues and challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
E.
Conclusions and way forward. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
Chapter 3 Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
B.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
xiv
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
A.
Technical and policy options for greening the sector . . . . . . . . . . . . . . . . . . . . . .
39
B.
Impacts on employment and incomes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
C.
Good social and labour practices in greening the sector . . . . . . . . . . . . . . . . . . .
47
D.
Social and labour: Challenges and issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52
E.
Conclusions and way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55
Chapter 4 Fisheries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62
A.
Aligning fisheries with sustainable development . . . . . . . . . . . . . . . . . . . . . . . . . .
62
B.
Impacts of greening on employment and incomes in fishing . . . . . . . . . . . . . . .
65
C.
Issues and challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68
D.
Conclusions and way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
Chapter 5 Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
A.
Energy: Greening of the sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
B.
Impacts of greening on employment and incomes
in the energy sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
Transition from conventional energy to renewable:
Challenges and issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86
D.
Job quality, skills and transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87
E.
Conclusions and way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
89
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
90
Chapter 6 Manufacturing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96
A.
Opportunities: Greening of the sector and its industries . . . . . . . . . . . . . . . . . .
96
B.
Impacts of greening on employment and incomes
in manufacturing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98
C.
Examples of good practices at sector and enterprise level . . . . . . . . . . . . . . . . . .
103
D.
New skills and professional service requirements. . . . . . . . . . . . . . . . . . . . . . . . . .
105
E.
Conclusions and way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
106
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
107
C.
Table of Contents
Chapter 7 Recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
111
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
111
A.
Greening recycling: benefits and policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
112
B.
Impacts of greening on employment and incomes . . . . . . . . . . . . . . . . . . . . . . . .
114
C.
Organization, inclusion and formalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
117
D.
Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
120
E.
Conclusions and way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
121
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
123
Chapter 8 Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
127
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
127
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128
A.
Greening the building sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128
B.
Emerging policy instruments for green building . . . . . . . . . . . . . . . . . . . . . . . . . .
130
C.
Impacts of greening on employment and quality of life. . . . . . . . . . . . . . . . . . . .
131
D.
Conclusions and way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
139
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
140
Chapter 9 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
145
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
145
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
146
A.
Greening of the sector and of enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
146
B.
Impacts of greening on employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
147
C.
Issues and challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
155
D.
Conclusions and way forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
156
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158
Chapter 10 Policy measures to ensure decent work
and social inclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
163
Main findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
163
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
164
A.
Facilitating environmental change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
164
B.
Linking environment and labour through tax reforms. . . . . . . . . . . . . . . . . . . . .
167
C.
Labour market and education policies for a successful
transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
172
D.
Evidence of positive employment effects from green policies. . . . . . . . . . . . . . .
175
E.
Social dialogue will help ensure a successful transformation . . . . . . . . . . . . . . .
179
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
183
xv
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
List of figures, tables and boxes by chapter
FIGURES
Chapter 1
Figure 1.1
Productivity loss of a further increase in GHG
compared to the baseline. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Schematic relationships between total employment,
green jobs and decent work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Figure 1.3
Impact of a green economy on the volume of employment. . . . . . . . .
8
Figure 1.4
Share of income spent on energy expressed as a ratio of poorest
quintile to richest quintile in Latin America
(selected countries) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Shares of global GHG emissions by sectors . . . . . . . . . . . . . . . . . . . . . . .
12
The contribution of the sector to the global
GDP and employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
NREGA employment by type of activity, 2009 . . . . . . . . . . . . . . . . . . .
29
Formal employment in forestry subsectors (per 1,000 full-time
equivalent employees). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
Employment status in 2010 of forest workers laid
off after the logging ban in 1998. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
Share of employment and income in sectors
and subsectors of Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51
Global trend in fish consumption per capita by decade . . . . . . . . . . . .
64
Comparison of job-years across technologies
(job-years/GWh). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78
Renewable energy employment in Europe,
by energy source and country. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80
Share of steel production based on scrap, selected countries,
2006–10 (millions of tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99
Direct and indirect jobs in energy efficiency retrofits
financed by Kf W loans and grants, Germany, 2005–10 . . . . . . . . . . .
136
Public transport infrastructure employment in France,
2006–12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
151
Figure 1.2
Figure 1.5
Chapter 2
Figure 2.1
xvi
Figure 2.2
Chapter 3
Figure 3.1
Figure 3.2
Figure 3.3
Chapter 4
Figure 4.1
Chapter 5
Figure 5.1
Figure 5.2
Chapter 6
Figure 6.1
Chapter 8
Figure 8.1
Chapter 9
Figure 9.1
Table of Contents
Figure 9.2
Employment impacts of rising US light vehicle
fuel efficiency: Annual fuel efficiency improvement
scenarios, 2017–25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
152
Brazilian car production by fuel type, 1957–2010 . . . . . . . . . . . . . . . .
153
Figure 10.1 Global productivity effects of using green tax revenues
to support jobs (per cent) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
168
Figure 10.2 Environmental tax revenue in the EU, 2008 . . . . . . . . . . . . . . . . . . . . . .
169
Figure 9.3
Chapter 10
TABLES
Chapter 1
Table 1.1 Overview of estimates of cost of inaction
on climate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Table 1.2 Average annual expenditure on energy as a share
of total expenditures, United States, 1982–2004 . . . . . . . . . . . . . . . . . . . .
10
Table 1.3 Share of energy spending in household budgets
in Eastern Europe and Central Asia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
Table 1.4 Global direct employment figures and percentages by sector . . . . . . . . .
12
Table 1.5 Employment shares per sector (per cent of total employment) . . . . . . .
13
Table 1.6 Employment shares and skill level in carbon-intensive
sectors (percentages). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Chapter 2
Table 2.1 Labour requirements in organic and traditional production
in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Table 2.2 Incomes of organic farmers in the United Kingdom
during and after conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
Table 2.3 Total employment and investment in NREGA . . . . . . . . . . . . . . . . . . . . .
29
Chapter 3
Table 3.1 People dependent on forests for employment,
income and livelihood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
Table 3.2 Regional distribution of jobs and estimated green jobs
in the forest industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
Table 3.3 Employment multipliers in forestry broad and core
sectors, EU-27(2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
Table 3.4 Potential new jobs in sustainable management of forests
and level of investment required (annual targets for an
initial 5-year period). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
Table 3.5 Plantation activities lead to employment
growth in China (1999–2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44
Table 3.6 Average earnings of occupations in forestry compared
to the minimum wage (MW) of selected countries. . . . . . . . . . . . . . . . . .
46
xvii
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Chapter 4
Table 4.1 Impacts of the introduction of artificial reefs . . . . . . . . . . . . . . . . . . . . . . .
66
Chapter 5
Table 5.1 Worldwide policies in support of renewable energy,
2005 and 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
Table 5.2 Wind energy jobs per unit of capacity, Europe, 2009 . . . . . . . . . . . . . . . .
78
Table 5.3 Estimated renewable energy employment worldwide in major
economies (direct and indirect jobs) in 2009/10. . . . . . . . . . . . . . . . . . . .
79
Table 5.4 Direct and indirect renewable energy employment in India,
2009/10 and 2015/20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80
Table 5.5 Estimated biofuels employment in APEC states, 2008 . . . . . . . . . . . . . .
84
Table 5.6 European power sector employment (direct jobs in operations
and maintenance), 2000, 2010 and scenario for 2030 . . . . . . . . . . . . . . .
86
Chapter 6
xviii
Table 6.1 Green jobs in selected US basic industries, 2010 . . . . . . . . . . . . . . . . . . . .
100
Table 6.2 Estimated output and job impacts on European steel
production with 10 per cent increased use of
recycled materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
101
Table 6.3 Estimated output and jobs due to take-up of energy efficiency
and low-carbon technologies by energy intensive industries
in Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102
Table 6.4 Green jobs in the US electrical and electronics industries,
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102
Table 6.5 Estimated new jobs and savings in the United States due to
enforcement of appliance and equipment efficiency
standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
103
Chapter 7
Table 7.1 Environmental benefits of recycling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
112
Table 7.2 Metals’ end-of-life recycling rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
113
Table 7.3 Direct employment and payroll in the US recycling
industry, 2001. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
114
Table 7.4 Comparison of materials recovery by the formal and
informal sector, five cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
115
Table 7.5 Number of waste pickers in selected developing
country cities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
116
Chapter 8
Table 8.1 LEED certification outside the United States . . . . . . . . . . . . . . . . . . . . . . .
129
Table 8.2 Urban and slum populations in developing regions. . . . . . . . . . . . . . . . . .
131
Table 8.3 Construction industry green employment,
selected countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134
Table 8.4 US building energy efficiency retrofit impacts . . . . . . . . . . . . . . . . . . . . . .
135
Table of Contents
Chapter 9
Table 9.1 Strategies and measures to reduce the environmental
impact of transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
146
Table 9.2 Employment at leading rail-vehicle manufacturing
companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
149
Table 9.3 Estimated employment in global urban public
transport, 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
150
Table 9.4 Employment and wages in the transportation sector,
United States, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
156
Chapter 10
Table 10.1 Some examples of ETRs implemented in the EU . . . . . . . . . . . . . . . . . . .
169
Table 10.2 Some examples of ETRs and environmental taxes
in developing countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
170
Table 10.3 Successful examples of skills upgrading
and training schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
174
Table 10.4 Country evidence on employment effects of
a greener economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
178
Table 10.5 Examples of social dialogue green initiatives around. . . . . . . . . . . . . . . . .
181
xix
BOXES
Chapter 1
Box 1.1
The links between GHG emissions and human activities . . . . . . . . . . . .
3
Box 1.2
Decent work and environmental sustainability: Definitions,
issues and considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Employment and skill levels in carbon-intensive sectors . . . . . . . . . . . . .
14
Box 1.3
Chapter 2
Box 2.1
Empirical evidence of yield increases from greening agriculture
in developing countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
Box 2.2
Low-carbon agriculture in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Box 2.3
Employment benefits of organic cotton and sugarcane
in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Box 2.4
The case of Uganda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Box 2.5
Plugging into the global value chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
Box 2.6
Indian National Rural Employment Guarantee
(NREGA) scheme. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
A cooperative for sustainable production of coffee:
The case of Ethiopia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
Box 2.7
Chapter 3
Box 3.1
The plantation of Allanblackia trees in the Novella
Africa Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Box 3.2
Box 3.3
Sustainable agroforestry practice in Nicaragua from
Alfred Ritter GmbH & Co. KG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
The greening of a pulp and paper mill in the United States . . . . . . . . . .
47
Chapter 4
Box 4.1
Norway’s response to overfishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67
Box 4.2
Greening of the fishing value chain by a large retailer:
Walmart’s sustainable seafood initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68
Social protection and management of fish stocks in Brazil . . . . . . . . . . .
69
Box 4.3
Chapter 5
Box 5.1
Navarra: A wind power success story. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81
Box 5.2
Solar home systems in Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
83
Box 5.3
Indian biogas and biomass enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85
Chapter 6
xx
Box 6.1
Box 6.2
Greening manufacturing through stakeholder dialogue
– the Top Runner programme in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98
Environmental and social life cycle assessments . . . . . . . . . . . . . . . . . . . . .
99
Chapter 7
Box 7.1
Organization and integration of waste pickers in Brazil . . . . . . . . . . . . .
118
Box 7.2
Improvements in earnings and social benefits . . . . . . . . . . . . . . . . . . . . . . .
119
Box 7.3
WEEE Recycle in India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
121
Chapter 8
Box 8.1
Revitalizing the inner city of Johannesburg . . . . . . . . . . . . . . . . . . . . . . . . .
132
Box 8.2
Brazil: Programa Minha Casa Minha Vida—
PMCMV (My House, My Life) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
132
Box 8.3
The employment benefits of green retrofitting in Hungary . . . . . . . . . .
135
Box 8.4
Energy efficiency retrofits in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
135
Box 8.5
Australia’s GreenPlumber® . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
137
Chapter 9
Box 9.1
Air France KLM’s fleet modernization and fuel efficiency . . . . . . . . . . .
148
Box 9.2
Cleaning up trucking at California’s ports . . . . . . . . . . . . . . . . . . . . . . . . . .
150
Chapter 10
Box 10.1 Environmental policy instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
165
Box 10.2 The Double Dividend Hypothesis (DDH) . . . . . . . . . . . . . . . . . . . . . . . . .
167
Box 10.3 Social dialogue in action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
180
Introduction
Working towards sustainable development
The present report has been prepared by the Green Jobs
Initiative1 and the International Institute for Labour
Studies at the ILO as a contribution to the United Nations
Conference on Sustainable Development ‘Rio+20’ in
June 2012. It contains a number of key findings to be considered by world leaders as they are setting out to chart
new pathways to sustainable development.
This report shows that the overuse of natural resources, such as forests, fish and clean water, and the rising
levels of pollution, including emissions of greenhouse
gases, are increasingly exceeding planetary boundaries. As
a result, the natural processes and systems which are vital
to the livelihoods of people are being disrupted. The
damage to economies and to society caused by environmental degradation has the potential to undo many of the
gains in development and poverty reduction achieved over
the past decades.
Failure to address these challenges at a time when
global unemployment levels exceed 200 million, one in
three workers lives in working poverty and 5.1 billion
people are without access to essential social security could
exacerbate the weakening of social cohesion and rising instability already present in a number of countries. The
report highlights that the green economy offers an opportunity to create decent work and improve social
inclusion – if the right policy mix is put in place.
Indeed, the environmental and social challenges are
inextricably linked. Economic growth, job creation and
incomes depend on – and can degrade – natural resources
and systems. However, they can also restore and enhance
environmental sustainability. Given the scale and the urgency of the challenges, it is clear that the world will have
neither the resources nor the time to tackle them separately or consecutively. They need to be addressed
together, in a comprehensive and complementary manner.
1
The Green Jobs Initiative includes UNEP, ILO, IOE and ITUC.
This report explores the drivers of change and transmission channels for the shift to a green economy, and
considers their implications for economic activity, employment growth and social outcomes, notably as regards
to the key economic sectors. It also identifies successful
policies and good practices, to ensure that the green
economy is characterized by gains in job quality, reductions in poverty and improvements in social inclusion.
In particular, Chapter 1 identifies the main environmental concerns and analyzes the sustainability of the
current economic development model. The chapter then
conceptually explores the inter-relationship between employment and incomes, considering direct, indirect and
induced effects as well as gross and net balances. In this
context, the chapter discusses new surveys and assessments
based on the emerging operational definition of green
jobs. It closes with a discussion of the important aspects
for income distribution and social inclusion: energy
poverty and access to energy.
Chapters 2 through 9 discuss the specific challenges,
drivers of change, opportunities and technical and policy
options in seven key sectors. These are the sectors that
would be most affected by the shift to a greener economy:
agriculture, forestry, fisheries, energy, manufacturing, recycling, buildings and transport. Each chapter analyses
the impacts of current policies on employment and incomes in these sectors and presents policy lessons and
good practices.
Finally, Chapter 10 examines the evidence on net employment effects, highlighting the importance of taking
a comprehensive approach to addressing the challenges.
An approach that recognizes the interplay between
environmental policy on the one hand and labour market
and social policy on the other. This chapter also draws
attention to the importance of social dialogue as a mechanism for achieving sustainable development from all
perspectives.
xxi
Chapter 1
Employment and income implications
of a move to a green economy*
Main findings
● Increasing empirical evidence demonstrates that the
current global growth model is unsustainable from environmental, economic and social perspectives. Environmental degradation is materializing into increasing
loss of biodiversity, water scarcity, land degradation and
the unsustainable extraction of natural resources. Pollution is already a major concern in many big cities and
greenhouse gas (GHG) emissions are expected to double during the next three decades in middle- and lowincome economies, with the global temperature
expected to rise over this period by between 3 and
6 °C.
● Higher concentrations of greenhouse gases in the atmosphere will also entail considerable economic costs,
notably in terms of productivity. Projections indicate
that, under a business-as-usual (BAU) scenario, productivity in 2030 will be 2.4 per cent lower than today
and 7.2 per cent lower in 2050. Moreover, severe
weather events linked to climate change – such as
warmer temperatures, floods and extreme natural
events – impose significant negative economic costs on
society.
● Recent evidence indicates that the social costs of failing
to address climate change are mounting. If the BAU
scenario continues to dominate, then wasteful production and consumption patterns – along with continued
soil degradation, deforestation and overfishing – will
result in increasing water shortages and escalating prices
for food, energy and other commodities. This will exacerbate problems in developing countries, such as
poverty and inequality as well as malnutrition and food
security, due to the fact that low-income households
spend a significant, and disproportionate, share of income on food and energy-related items. These trends
will impose massive social and economic costs.
● The shift to a greener economy offers significant opportunities to create decent work and improve social
inclusion, while placing the global economy on a sustainable growth path. At the same time, the transition
phase is likely to entail some challenges, particularly
within certain sectors and for certain workers and,
therefore, a comprehensive approach is needed. This
report will examine these transformations, notably in
the key sectors most affected by this shift, highlighting
the conditions, policy prescriptions and good practices
necessary to achieving sustainable development from
all perspectives.
* Iris Macculi provided an earlier draft of the chapter. Excellent research
assistance was also provided by Clemente Pignatti.
1
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Introduction
2
Prevailing approaches to economic growth and development of the past few decades have been inefficient from
social, economic, environmental and employment perspectives. They have led to the overuse of natural resources,
which is environmentally unsustainable in the long term,
and have failed to meet the aspirations of a large proportion of society who is seeking decent work and incomes.
Moreover, a continuation of the business-as-usual (BAU)
scenario will have adverse consequences for both labour
markets and personal well-being. The current approach is
also limited in terms of its ability to sustain growth and
is likely to lead to greater economic volatility.
Instead, a sustainable development approach is needed;
one which puts people, the planet and fairness at the core
of policy-making. The transition towards a greener
economy, which entails reorienting growth to ensure that
equal weight is given to the economic, social and environmental pillars when setting objectives, is of critical
importance. In this respect, the Decent Work concept can
serve as a coherent policy framework to the mutual benefit
and improved integration of macroeconomic, investment,
employment, social protection and environmental policies
and objectives.
The shift to a greener economy will entail changes in
employment patterns and income distribution. With this
in mind, the purpose of this chapter is to develop a better
understanding of the environmental challenge and to identify more clearly the transition mechanisms with respect
to labour markets and social issues.
A. Environmental sustainability
and economic growth: Issues
and considerations
The world is facing a number of growing and interrelated
environmental challenges which, in turn, have potentially
serious negative implications for economic growth and social development, notably in terms of the impacts on
employment and income. Arguably, the most prominent
among these challenges are the loss of biodiversity, the
growing scarcity of fresh water and land, the escalating use
of natural resources, rising pollution levels and climate
change. It is important to bear in mind that these challenges are often interrelated and can trigger feedback loops
which aggravate the initial problems.
1. Current path of growth is not
environmentally sustainable
Biodiversity
Today, species become extinct at a rate which is 100–
1,000 times higher than what could be considered
natural (Rockström et al., 2009). The Economics of
Ecosystems and Biodiversity (TEEB, 2009) studies have
pointed out that ecosystems, biodiversity and natural
resources underpin economies, societies and individual
well-being. The multiple benefits provided by nature
are often overlooked, however, even though their value
is enormous. In spite of their vital functions and the
scale of their value, ecosystem services and biodiversity
are not systematically reflected in national accounts and
rarely transmitted as market signals into business decision-making. While the main drivers of biodiversity loss
have been land-use change and management (agriculture and commercial forestry) as well as pollution,
climate change is projected to become the fastest
growing driver of biodiversity loss by 2050 (OECD,
2012). Up to 30 per cent of all mammal, bird and
amphibian species will be threatened with extinction
this century (Díaz et al., 2005).
Water scarcity and land degradation
Fresh water is already scarce in many parts of the world.
Water stress is projected to increase, with water supplies
predicted to satisfy only 60 per cent of world demand
in 20 years’ time (Water Resources Group, 2009). The
OECD (2012) Environmental Outlook to 2050 projects
that 2.3 billon more people will be living in areas experiencing severe water stress, bringing the total to over 40
per cent of the world’s population in 2050. It points out
that water shortages would hinder the growth of many
economic activities, with industry, power generation,
human consumption and agriculture increasingly competing for water, a scenario which has serious
implications for food security. Irrigation already takes
about 70 per cent of available water, yet meeting the
Millennium Development Goal on hunger will mean
doubling food production by 2050. And, while agriculture has experienced increasing yields thanks to the use
of chemical fertilizers, more intensive farming continues
to reduce soil quality. As climate change continues to
alter weather patterns, unpredictable weather conditions
remain the most significant factor causing volatility in
the price of agricultural products (OECD/FAO, 2011).
Chapter 1: Employment and income implications of a move to a green economy
Natural resource use and commodities
The International Resource Panel (UNEP RP, 2010) has
analysed the economic effects of scarcity of natural resources. Its recent report (UNEP RP, 2011) examined the
extraction of four categories of primary raw materials –
construction minerals, ores and industrial minerals, fossil
fuels and biomass. It found that, in total, these materials
are harvested at a rate of 47 to 59 billion tonnes per year.
A BAU scenario would lead to a tripling of global annual
resource extraction by 2050. Such a scenario assumes no
major system innovation in terms of sustainability – such
as faster efficiency improvements or a switch away from
fossil energy.
Pollution
According to the OECD (2012), exposure to hazardous
chemicals is already significant on a worldwide scale and
likely to increase in coming decades, particularly in
emerging economies and developing countries. The concentrations of pollutants in some cities already exceed safe
levels.
Box 1.1 The links between GHG emissions and
human activities
The principal GHGs include carbon dioxide (CO2),
nitrous oxide (N2O) and methane (CH4). Measured
as CO2 equivalents, over the past few decades there
has been little change in the composition of gases
(it is common practice to express other GHGs in
terms of CO2).
CO2 accounts for roughly three-quarters of all emissions and is the result principally of (i) the
combustion of fuels, (ii) biomass burning and (iii)
deforestation. Methane (CH4), which contributes to
about 14 per cent of global GHG emissions, is linked
mainly to animal husbandry and irrigated rice fields.
Nitrous oxide (N2O) makes up the remainder of the
GHG emissions and stems mainly from nitrogenous
fertilizers used to increase crop yields.3
Source: IPCC, 2007.
3
One of the principal causes of the changes in global temperatures is higher levels of greenhouse gas (GHG)
emissions in the atmosphere.1 Between 1970 and 2005,
GHGs have increased by more than 70 per cent, with most
increases stemming from human activities (box 1.1).
Moreover, given the fact that the combustion of fossil fuels
and biomass burning account for the vast majority of
GHG emissions, it is not surprising that energy supply
and agricultural-related activities together account for
roughly 57 per cent of total emissions. Industrial activity
(i.e. manufacturing) and transport are also two major
drivers, accounting for 19 and 13 per cent respectively.
Indeed, the vast majority of carbon emissions result from
the production of goods and services rather than from the
direct consumption of energy by households.2
The current levels of CO2 concentration in the atmosphere are, to a large extent, the result of historic emissions
from industrialized counties over the last century. This is
of particular relevance because CO2, once released into
the atmosphere, remains there for a long period of time
(generally called “residence time”). While most of the CO2
is progressively incorporated into plants or dissolved into
the oceans following a gradual carbon cycle, around 15–
30 per cent of carbon is expected to persist in the
atmosphere after 200 years (and 3–7 per cent will still be
there in 100,000 years). Indeed, even after CO2 concentrations in the atmosphere have been stabilized, global
temperatures and sea levels would continue to rise for centuries, altering – in some cases irreversibly – the climate
system balance. This is of considerable concern when discussing policies that are intended to address, for example,
only the flow of emissions as opposed to addressing the
stock.
High-income countries are still the largest emitters of
GHG emissions per capita. In 2005, per capita emissions
were ten times the average of those of developing countries.
With just 20 per cent of the world population, high-income countries accounted for over 45 per cent of total
emissions in 2005. By contrast, low-income countries –
1
GHGs are those gases that absorb and release infrared radiations
(coming from the sunlight) within our atmosphere, instead of letting them
re-radiate back into space.
2
In the EU, for example, goods and services industries account for
approximately 80 per cent of emissions (IILS, 2011a).
3
Fluorinated gases – hydrofluorocarbons (HFCs), perfluorocarbons
(PFCs), chlorofluorocarbons (CFCs) and sulphur hexafluoride (SF6) –
are a type of synthetic greenhouse gases which also result from various
human activities (such as the running of air conditioners) but, due to their
lesser importance, they are not examined in this chapter.
Greenhouse gas emissions: Trends, sources and
links to sectoral activities
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
with one-third of the world population – accounted for
only 7 per cent of total CO2 emissions. Under BAU scenarios, emissions are expected to nearly double over the
next three decades in middle and low-income countries
and to rise by another 5 per cent in industrialized
economies. These emission levels could drive concentrations of GHGs in the atmosphere to 685 parts per million
by 2050, with probable consequent warming of 3–6° C.
This concentration and attendant range of temperature
increases would have serious and possibly unmanageable
consequences and far exceed the internationally agreed
targets of 450 ppm and 2°C (OECD, 2012). The challenge for the future is therefore to radically and quickly
reduce emissions in industrialized countries and to adopt
low-carbon growth strategies in developing and emerging
economies.
4
2. Economic costs of doing nothing
It can be argued that there is an inherent trade-off between
the goals of economic activity and environmental sustainability. This view stems from the fact that resource use
and the bulk of GHG emissions originate from industrial
activities, so any efforts to curb resource consumption and
emissions are considered, from this viewpoint, to have an
adverse effect on output and jobs in these industries.
This view rests on the assumption that it is possible to
continue with the current path of production and con-
sumption. Recent analysis, however, suggests that a BAU
approach will be unsustainable. Indeed, the OECD (2012)
points out that “there is compelling scientific evidence that
natural systems have tipping points or biophysical boundaries beyond which rapid and damaging change becomes
irreversible”. It warns that further delay in addressing environmental challenges risks very costly or even, in certain
cases, catastrophic changes. Estimates available for some
of these costs highlight that they are indeed significant.
Initial findings from the TEEB series point out for instance that annual loss in biodiversity and ecosystem
services due to deforestation and forests degradation is
equivalent to US$25 trillion (EC, 2008).
In order to estimate the impact on economic growth
of rising GHG emissions, the International Institute for
Labour Studies (IILS) expanded its Global Economic
Linkages (GEL) model to simulate firm behaviour in this
context.4 If nothing is done, much higher concentrations
of GHGs in the atmosphere will entail considerable costs
in terms of output and aggregate productivity levels. In
particular, the model estimates that productivity levels
in 2030 would be 2.4 per cent lower than today and
7.2 per cent lower by 2050 in a BAU case (figure 1.1).
Unmitigated climate change could also lead to a permanent loss of global consumption per capita of 14 per cent
by 2050 (ILO and OECD, 2012). Living standards will
be significantly affected as a result. These estimates are in
line with a number of studies assessing economic damage
due to environmental degradation (table 1.1).
Figure 1.1 Productivity loss resulting from further increases in GHG compared to the baseline (per cent)
0
-1
-2
-3
-4
-5
-6
-7
-8
2010
2020
2030
2004
2050
Note: The baseline scenario assumes that environmental damages remain at the level of the base year (2000).
Source: Bridji et al., 2011.
4
The model excludes costs on individual well-being. Taking these into
account will obviously worsen the costs of inaction.
Chapter 1: Employment and income implications of a move to a green economy
Table 1.1
Overview of estimates of cost of inaction on climate change
Study
Methodology
Cost of inaction on climate change
Stern, N. (2007)
Integrated assessment model
• Scenario of 2–3° C warming, cost could be a
permanent loss of around 0–3 per cent in global
world output (compared to what could have been
achieved in a world without climate change).
• Scenario of 5–6°C warming by end of century
(including the risk of abrupt and large-scale climate
change) could result in an average loss of 5–10 per
cent in global GDP.
Stern, N. (2007)
PAGE2002 model
• Total cost (estimated) over the next 200 years of
climate change (BAU) would be equivalent to an
average reduction in global per capita consumption
of at least 5 per cent.
• If the PAGE2002 model were to systematically take
into account the following three important factors,
the cost of BAU would be even higher:
non-market impacts (direct impacts on the
environment and human health) – estimate
increases to 11 per cent of global per capita
consumption;
if the climate system is more responsive to GHG
emissions than previously thought (i.e. amplifying
feedbacks) – estimate increases to 14 per cent,
including non-market impacts;
climate change burden falls disproportionately
on the poor regions of the world (5–6° C warming
could be more than 25 per cent higher).
If all three factors are added together, it could total a
20 per cent reduction in consumption per capita.
Nordhaus, W. (2007)
DICE-2007 model
No controls baseline (aka BAU approach, no controls
on GHG emissions for the first 250 years) would
increase damages by almost 3 per cent of global output
in 2100 and close to 8 per cent of global output in
2200.
Ackerman, F. and Stanton,
E. A. (2006)
PAGE Model
In the absence of new policies, the discounted present
value of all cumulative climate damages from now until
2200 will amount to US$74 trillion (at 2000 prices).
The average annual damages, from 2000 to 2200, will
be US$26 trillion.
The costs related to the externalities associated with
policy inaction are considerable and will increase significantly in coming decades as GHGs and other sources of
environmental damage continue to accumulate. They are
due to the direct impact of erratic weather patterns,
warmer temperatures and extreme weather events on agriculture and infrastructures, increased scarcity of fresh
water resources and an indirect effect on social well-being
through, among other things, higher food prices and
health costs due to climate change and pollution. Already,
there is growing evidence of how severe weather, that may
be linked to global warming, can have a dramatic effect
on the economy and society. For example, as a result of
Hurricane Katrina in the United States in 2005, New
5
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
6
Orleans lost some 40,000 jobs (ILO, 2007). The Cyclone
Sidr in Bangladesh adversely affected 567,000 jobs and
the estimated value of non-agricultural private assets lost
amounts to some US$25 million (ILO and MLE, 2008).
Intensive resource use drives up energy and commodity prices. For instance, Dobbs et al. (2011) argue
that a complete rethink of resource management will
be needed to keep pace with soaring demand. In particular, demand increases of 30–80 per cent across all
major resources will coincide with increasing difficulty
and cost of finding and extracting them. The study
points out that the sharp increase in commodity prices
from 2000 to 2011 has wiped out the price declines of
the previous 100 years. Moreover, it suggests that the
global economy could face several decades of higher and
more volatile resource prices, which could have adverse
consequences on output. Already, the overuse of resources has led to the sharp contraction or collapse of
some industries in G-20 countries, such as forestry in
China, Indonesia and the western United States, or
fishing in parts of Canada.
3. Social costs of inaction
There are also important social costs associated with environmental degradation. For instance, unabated
increases in pollution are likely to lead to a doubling of
premature deaths caused by airborne particulate matter
in urban areas to 3.6 million per year by 2050, with
most deaths occurring in China and India. At the same
time, the benefit:cost ratio of acting on pollution can
be as high as 10:1 in emerging economies (OECD,
2012).
In addition, in developing countries, problems such
as malnutrition, health disease, child mortality, income
poverty and inequality are being exacerbated by changes
in climate patterns. Deforestation, higher sea temperatures, soil erosion, water contamination and more
uncertain weather conditions are resulting in increased
food insecurity and higher food prices. This will affect
the livelihoods of low-income households, whose share
of food-related expenditures is significant (see section
B).
In tropical areas for instance, the incidence and extent of infectious diseases, including malaria, cholera
and dengue fever, may increase substantially as a consequence of increased warming and flooding. Water and
food diseases caused by diverse viruses and bacteria may
also increase as a result of higher temperatures and water
contamination, along with illnesses or death caused by
heat stress and extreme weather events. Findings from
UNFCCC show that global warming – through its impact on disease vectors – could expose an additional
400 million people to the risk of malaria before the end
of the century (UNFCCC, 2007).5 Respiratory problems resulting from pollution could also increase,
particularly in urban areas. Additionally, indoor air pollution from burning biomass, coal and kerosene is
responsible for at least 1.5 million, and perhaps as many
as 2 million, premature deaths each year (Legros et al.,
2009). Such trends could exacerbate existing inequalities
and vulnerability among the poor.
B. Employment and social
dimensions of climate
change
1. Decent work and a green economy:
Issues and considerations
The debate about a greener economy has been marked
by a strong focus on (and controversy over) whether or
not a green economy creates jobs. This has brought to
the fore the importance of better understanding the concept of a green job. The Green Jobs report of 2008
broadly defined a green job as any decent job that contributes to preserving or restoring the quality of the
environment, be it in agriculture, industry, services or
administration (UNEP et al., 2008).6 An important element in this definition of green jobs is the fact that the
jobs have to be not only green but also decent, i.e. jobs
that are productive, provide adequate incomes and social
protection, respect the rights of workers and give
workers a say in decisions which will affect their lives.
This definition incorporates the three dimensions
of sustainable development. Green jobs significantly
reduce negative environmental impacts of economic
activity, ultimately leading to sustainable enterprises and
economies (box 1.2).
5
Similarly, an increase of 2 °C in the global temperature (i.e. the
threshold marker for “dangerous” climate change) is likely to lead an additional 600 million facing acute malnutrition over the same period.
6
In practice these jobs: (i) reduce consumption of energy and raw materials; (ii) limit greenhouse gas emissions; (iii) minimize waste and
pollution; (iv) protect and restore ecosystems; and (v) enable enterprises
and communities to adapt to climate change.
Chapter 1: Employment and income implications of a move to a green economy
Box 1.2 Decent work and environmental sustainability: Definitions, issues and considerations
A better understanding of the impacts of a greener economy on labour markets and an assessment of the effectiveness
of policy measures requires a more specific definition for consistent data collection and measurement. Operational
definitions have been developed and applied in a growing number of countries and work is under way to formulate
agreed statistical definitions at national, regional and international levels.
These efforts are complicated by the dynamic nature of the green economy, with evolving technology and thresholds
for environmental impacts. A second complication is the fact that green products and services produced in economic
sectors, such as renewable energy or energy-efficient buildings, are not necessarily based on green production
processes and technology, and vice versa. Measurement of green jobs therefore must take account of employment
in green economic sectors and industries from an output perspective and of environmental occupations and job
functions in all sectors from a process perspective. These two concepts complement each other and shed light on
different ways of greening enterprises and economies, offering different entry points for policies. Figure 1.2 presents
these relationships schematically, specifically:
A: decent green jobs in green industries (including green output from non-green industries)
B: decent non-green jobs in green industries
C: non-decent green jobs in green industries
D: decent green jobs in non-green industries
E: employment in green industries
F: green occupations
7
G: decent jobs
Green jobs, according to the UNEP et al. (2008) definition above, are those in segments B plus D plus A.
Figure 1.2
Schematic relationships between total employment, green jobs and decent work
E: Employment in
green industries
B
C
A
G: Decent jobs
D
F: Green
occupations
Most practical applications have taken an industry approach, identifying green jobs with employment industries
that are judged to produce green products and services with variations in scope and thresholds. The UNEP et al.
definition is broader, in that it includes employment in green sectors as well as green occupations across the
economy. It also encompasses employment in parts of non-green sectors, such as agriculture, forestry, construction,
manufacture or transport, which operate in an environmentally friendly manner.
A growing number of national governments are developing their own definitions of green jobs to serve as a basis
for collecting statistics and making policy choices. While these initiatives have been instructive, no consensus has
been reached among researchers and practitioners. A harmonization of concepts would make it easier to compare
developments in different countries. Accordingly, the ILO is working on the development of a statistical definition
for green jobs, and on guidelines for statistical measurement of employment in the context of a green economy.
In October 2013, the ILO will host the 19th International Conference of Labour Statisticians (ICLS) where it will
present a concept paper reviewing current practice in selected countries, and suggest a standardized definition for
green jobs that could be applied by countries in all regions and at all stages of economic and social development.
Stoevska, V. (2011).
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
2. Understanding employment transitions
8
The move towards a greener economy is likely to lead to
significant shifts in employment and income, with gains
and losses both within and between sectors of the
economy. All potential implications of this transition –
both positive and negative – should be taken into consideration (figure 1.3). On a positive note, increased
demand and investment in greener products and services,
as well as the equipment and infrastructure to produce
them, will lead to the expansion of certain industries and
enterprises. This will translate into higher labour demand
and job creation (direct jobs), primarily in green sectors.
In addition, due to inter-industry relations of the expanding industries, other parts of the economy which
supply inputs to the expanding green sectors also benefit,
creating additional employment (indirect jobs), including in non-green sectors, such as high-insulation
glass and cement for green buildings or steel and carbon
fibre for the blades and towers of wind turbines. The income generated by this additional economic activity is
redistributed by spending on additional consumption
and investment across the economy, creating further employment (induced effects) in addition to the direct and
indirect jobs.
The number of jobs created at all stages of the
greening process is a function of the size of demand and
investment, of trade (where products themselves or inputs are imported, subtracting from domestic demand
or export, thereby increasing domestic demand and related employment) and of the employment elasticity
(jobs created or maintained per unit of demand). Using
the example of France, figure 1.3 illustrates that this shift
can be very favourable in terms of job creation. Demand
for green goods and services has higher employment elasticities than average demand and is substantially greater
than demand for resource- and energy-intensive goods
(with the exception of car maintenance).
A further conditioning factor are “budget effects”. If
green products and services are more expensive than their
substitutes, enterprises and households will have fewer
resources left to spend on other goods and services. A
negative budget effect can, for example, be associated
with the introduction of renewable energy. Although the
cost of power generation using renewables has been
falling fast and has become increasingly competitive, it
initially resulted in higher costs to consumers, albeit temporarily.
Conversely, positive budget effects do occur due, for
example, to cost-effective investments in energy efficiency (Rosenfeld et al. 2009) and broader resource
efficiency (Dobbs et al. 2011). The resulting gains shift
demand away from energy consumption, which has a
low employment elasticity, to goods and services with
higher elasticities. Importantly, these gains are cumulative over time. Thus, the potential for job creation is not
only limited to certain industries, but can occur
throughout the economy, with some significant spill-
Figure 1.3 Impact of a green economy on the volume of employment
Gross effects
Demand
Employment
(C+I) +/- Trade X
elasticity
+/Trade
= Gross transition
Net effects
= Direct creation in sector - substitution
+
+
Indirect creation in
supply chain
= Net indirect
= Net value chain
+
Induced
= Net induced
+
+
Income multiplier
Indirect loss
Creation - Loss
+
Budget effects
(prices)
= Net direct
Induced
= Net induced
=Total net effect
Chapter 1: Employment and income implications of a move to a green economy
over effects. Together, these add up to the gross gains in
employment.
However, this mechanism also has a downside since,
for every job lost, employment (and income) will be
adversely affected in other parts of the economy, because
a given green product or service replaces a less green
one. An increase in renewable energy, for example, reduces demand for conventional fossil power and
thus for fossil power plants as well as having an impact
on supply sectors, such as coal mining. The direct,
indirect and reduced losses add up to a gross loss in employment.
Both the gross and the net effects are important.
Taken together, the gross gains and losses are equivalent
to the number of workers who will have to change jobs.
This is an indication of the size of the transition occurring in the labour market. The direct and indirect gains
and losses also help to explain the nature of the transition
as they show whether workers are likely to have to move
between sectors or if the relocations will take place
mainly within the same sector. The net effects are equally
important because they show whether or not a greener
economy will generate more jobs or result in job losses.
Whether the overall, quantitative effect on employment
is positive or negative depends on the complex interplay
between these job flows and the policy mix (see also
Chapter 10).
In addition to the impacts on employment, the shift
to a green economy will also affect income levels and
distribution, with implications for poverty reduction.
These impacts are a result of how the shifts in employment affect primary incomes, most importantly the levels
of wages among workers and incomes among the selfemployed, as well as the redistribution of incomes
through taxation, social protection and prices. As the
following section will show, changes in prices can have
strongly differentiated impacts on households of
different income levels.
3. Poverty and energy access:
Opportunities and challenges
proportion of their income on energy, despite the fact
that poorer households consume less energy,7 findings
which are confirmed by a number of recent studies:
● Africa and Asia: A 2010 study by the World Bank
which analysed the structure of household expenditures in several Asian and African countries (namely
Bangladesh, Cambodia, India and Uganda), found
that expenditures on energy – in both urban and rural
areas – were the highest in the lowest income quintile
(Bacon et al., 2010). For South Africa, Sugrue (2005)
finds that poor households spend, on average, 25 per
cent of their income on energy compared to 2 per
cent for more affluent households. A study for China,
Ghana and Indonesia found that poor households
spend between 30 per cent and 50 per cent of their
resources on energy, while households with a medium
income spend less than 10 per cent (Meikle and Bannister, 2003).
● Latin America: A study commissioned by the Economic Commission for Latin America and the
Caribbean (ECLAC) found that the share of income
spent on energy among the poorest quintile, in comparison to the richest quintile, ranges from roughly
13 times in Ecuador to two times in Peru (figure 1.4).
● North America: A study published by the Federal Reserve Bank of Chicago shows that, in the United
States, the share of energy spending declines with income (Cashin and McGranahan, 2006). Estimates
for the period 1982–2004 indicate that the bottom
quartile spends 9.2 per cent of their expenditures on
energy, compared to 6.7 per cent for the top income
quartile (table 1.2). The gap is particularly pronounced with respect to electricity.
● Western Europe: Drawing data from the British
Household Panel Survey (BHPS), a study from the
University of Cambridge examines energy spending
among households with very low incomes, including
pensioners, female single parents and benefits recipients ( Jamasb and Meier, 2010). Results show that all
these low-income household groups had higher levels
Energy and fuel poverty: Addressing current
inadequacies
One area of particular concern directly related to environmental policies and change is the extent of energy
and fuel poverty in both developed and developing countries. In particular, poor households spend a higher
7
Although various definitions exist, one common approach is to define
households in fuel poverty as those whose expenditures on energy and fuel
bills account for more than 10 per cent of total expenditures, yet have
difficulties in maintaining a satisfactory heating regime.
9
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Figure 1.4 Share of income spent on energy expressed as a ratio of poorest quintile to richest quintile in Latin America
(selected countries)
14
12
10
8
6
4
2
0
10
Ecuador
Bolivia
Paraguay
Chile
Peru
Source: IILS estimates based on Kozujl, 2009.
Table 1.2
Average annual expenditure on energy as a share of total expenditures, United States, 1982–2004
Total
energy
Gasoline
and motor
oil
Electricity
Natural gas
Fuel oil
Bottom income quartile
9.2
3.8
3.5
1.5
0.4
Second income quartile
8.9
4.1
3.1
1.3
0.4
Third income quartile
8.2
4.1
2.7
1.1
0.3
Top income quartile
6.7
3.3
2.2
0.9
0.3
Source: Cashin and McGranahan, 2006.
of energy spending than the average household in
the sample.8 Similarly, research by the Irish Department of Communications, Energy and Natural Resources highlights the fact that, in 2009, 20.5 per cent
of Irish households spent more than 10 per cent of their
disposable income on energy, of which 9.8 per cent
were classified as “severely poor” and 5.4 per cent were
“extremely poor” (O’Connor, 2011). In France, a report published in 2006 by the European Fuel Poverty
and Energy Efficiency Project showed that 25 per cent
of an estimated 1.6 million households that could not
afford to keep their homes warm belonged to the first
income decile (EPEE, 2006).
● Eastern Europe and Central Asia: A 2002 report from
the World Bank (Lampietti and Meyer, 2002) used
household survey data for selected countries in the European and Central Asian Region to analyse household
energy consumption and heating patterns. The report
showed that households spend a significant portion of
their budgets on energy – from 3 per cent in Tajikistan
to about 12 per cent in Armenia and Moldova. These
expenditures include district heat, electricity, coal, liquefied petroleum gas (LPG), kerosene, wood and central gas. In all countries except Latvia, the poor spend a
larger share of their household budgets on energy than
do the non-poor (table 1.3).
8
The study also illustrated that low-income households tend to live
in homes with poor energy efficiency.
Of particular concern is the fact that low-income households also tend to have lower income elasticity in terms
Chapter 1: Employment and income implications of a move to a green economy
Table 1.3
Share of energy spending in household budgets
in Eastern Europe and Central Asia
Poor
Non-poor
Armenia
12.9
10.5
Kyrgyz Republic
13.1
7.0
Croatia
5.5
4.0
Moldova
13.2
12.0
Tajikistan
2.8
1.6
Lithuania
9.0
7.5
Latvia
3.0
5.1
Source: Lampietti and Meyer, 2002.
of energy spending than those with higher incomes
(Jamasb and Meier, 2010). This is further aggravated by
the close link between energy prices and those of other
essential goods and services, such as food and transport
on which the poor spend an even larger percentage of their
income.9 The majority of poor households therefore have
little budgetary flexibility, and an increase in prices or a
change in energy policies can have a direct impact on them,
forcing them to choose between energy payments and essential goods (Sustainlabor Foundation, 2008).
Ensuring better access: Leveraging the shift
to green
More than 1.3 billion people are currently without any
access to electricity and 1 billion people have unreliable
access (Sustainlabor Foundation, 2008). Some 85 per cent
of those with no access live in rural areas. In sub-Saharan
Africa, urban areas are also affected and roughly one-third
of the continent’s population have no access to electricity.
Similarly, a study commissioned by the Economic
Commission for Latin America and the Caribbean
(ECLAC) (Kozujl, 2009), showed that, despite high rates
of urbanization, almost 30 million people in the region
still lacked access to electricity in 2009 and of, these, 21.4
million (73 per cent) are poor. Looking ahead, in a BAU
scenario, some 15 per cent of the world’s population is expected to lack access to electricity in 2030, the majority
of them living in sub-Saharan Africa (IEA, UNDP and
UNIDO, 2010).
9
In nearly half of the countries for which data exist, the share of food
expenditures in household income among the poorest population quintile
is over 60 per cent – ranging from 38 per cent in Latin America to 70 per
cent in Asia and 78 per cent in Africa (IILS 2011b).
Household energy use is increasingly important in the
context of fuel poverty and the equity debate, as well as
in relation to energy-saving and efficiency policies (Jamasb
and Meier, 2010). While energy is not in itself a basic
need, it is a critical input for providing other essential
human needs. Consequently, the satisfaction of basic
human needs and poverty alleviation efforts cannot be
achieved without improving access to energy services
(UNECA, 2003). In fact, an estimated 2.7 to 3 billion
people depend on traditional, highly polluting biomass
for cooking and heating. Indoor air pollution from
burning biomass, coal and kerosene is responsible for at
least 1.5 million, and perhaps as many as 2 million, premature deaths each year (IEA, 2011; Legros et al., 2009).
Both the burden of the extra work involved in collecting
fuelwood and traditional biomass and the health impacts
of indoor air pollution fall disproportionately on women
and children.
Yet, greening the environment can be seen as an opportunity to address these inadequacies. Indeed, there is
scope to introduce new measures; investments made to
improve access to more efficient energy supplies will have
widespread benefits, not only for education and health
but also for employment and incomes (see Chapter 5).
4. Overview of sectoral and employment issues
Employment and social implications of the transition to
a green economy will be strongly influenced by the economic structure and the sectoral composition of
economies. Key economic sectors will be affected, either
because they are directly resource and climate dependent
(such as agriculture, fisheries and forests), or because they
are large consumers of resources or significant polluters
(such as agriculture, forests, energy, transport, buildings
and industry) and/or have considerable potential to reduce environmental impacts (all of the above). This can
be illustrated by the differential impact of a transition
across sectors in terms of GHG emissions: those related
to the combustion of fossil fuels – which remains one of
the main sources of GHG emissions and energy supply –
are likely to be most affected (figure 1.5).
More specifically, the sectors that are most likely to
be impacted by the shift to a greener economy include:
agriculture, forestry, fisheries, energy, resource-intensive
manufacturing, recycling, buildings and transportation.
From an employment perspective, taken together, these
sectors account for approximately half of the global
workforce (table 1.4).
11
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Figure 1.5 Shares of global GHG emissions by sectors
Industry 19%
Agriculture and forestry 31%
Energy supply 26%
Transportation 13%
Source: IPCC, 2007.
12
Residential and commercial
buildings 8%
Industry structures vary considerably by country, so
that the economic challenges arising from sectoral adjustments in response to greening the economy will also
differ. For example, emerging and developing countries
employ large proportions of their labour force in the pri-
Table 1.4
Waste and waste
water 3%
mary sector, i.e. in agriculture, forestry, fishery and the
extraction of natural resources (table 1.5). Indeed, among
emerging countries, Indonesia has the largest share in
agriculture, followed by Brazil and Turkey. Interestingly,
in most of the countries analysed, the majority of the
Global direct employment figures and percentages by sector
Sectors
Direct employment (millions)
Agriculture
1,000 a
Forestry
44 b
Fisheries
25 c
Energy
30 d
Manufacturing (resource intensive)
200 f
Recycling
24 g
Buildings
110 e
Transport
88 h
Total
Percentage of global employment
1,521
50.1
Based on global estimate by ILO, 2012.
Based on full-time equivalents (FTEs), according to the lower bound of estimates by ILO, undated; FAO, 2011a.
c
Based on global estimate of FTEs in 2008 by FAO, 2011b.
d
Based on author’s own estimation of renewable energy and fossil fuel employment, see Chapter 3.
e
Based on UNEP SBCI, 2007; ILO, 2001.
f
Author’s own estimation based on table 1.5 (see below and ILO and OECD, 2012).
g
Based on author’s own estimation, see Chapter 7.
h
Based on author’s own estimation, 50 million jobs linked to motor vehicle manufacture and use, 26 million in rail and urban public
transport and 12 million in the air transport sector, see Chapter 9.
a
b
Chapter 1: Employment and income implications of a move to a green economy
Table 1.5
Employment shares per sector, 2008 (per cent of total employment)
Other
Manufacturing
and fishing
Argentina
69.1
14.0
Australia
68.6
Brazil
Agriculture
and
quarrying
Mining
Energy
Construction
Transport
0.8
0.4
0.4
8.8
6.4
10.3
3.3
1.2
0.9
9.2
6.5
54.9
14.4
18.3
0.4
0.4
6.7
4.8
Canada
69.4
11.9
2.4
1.5
0.9
7.2
6.7
China
46.7
28.8
3.5
4.4
2.5
8.7
5.2
France
67.6
15.0
3.0
0.1
0.8
7.2
6.3
Germany
62.5
22.0
2.3
0.3
0.9
6.5
5.5
Indonesia
34.9
12.2
40.3
1.0
0.2
5.3
6.0
Italy
60.9
20.5
3.8
0.2
0.6
8.4
5.5
Japan
62.3
18.4
4.2
0.0
0.5
8.4
6.1
Korea, Republic of
60.6
17.1
7.6
0.1
0.4
7.9
6.4
Mexico
56.6
16.5
13.1
0.4
0.5
8.3
4.6
Russian Federation
53.2
16.4
8.6
1.9
3.0
7.6
9.2
Saudi Arabia
71.5
6.5
4.3
1.3
0.9
11.1
4.5
South Africa
63.0
14.3
5.7
2.4
0.7
8.3
5.6
Turkey
44.4
20.0
23.7
0.5
0.4
5.9
5.1
United Kingdom
70.7
12.0
1.5
0.4
0.7
8.1
6.7
United States
74.1
10.9
1.5
0.6
0.8
7.5
4.5
Source: IILS estimates.
Note: For Argentina, Brazil and China, estimates are drawn on the latest year available.
labour force is employed in low carbon intensive sectors.
In contrast, in industrialized countries large proportions
of the labour force are concentrated in the manufacturing sector. Among the carbon-intensive sectors,
construction has the second largest share of employment, with most of the countries employing around 10
per cent of their workforce in the industry. Mining and
quarrying represent a small percentage in almost all
countries (with the notable exception of China), while
transport employs between 4 and 10 per cent of the
total active population across all countries. It is interesting to note that the energy sector – including
electricity, gas and water supply – accounts for a relatively minor share of total carbon-intensive employment
in all G20 countries, the highest shares being in the
Russian Federation and China.
However, the biggest transition is likely to occur in
those sectors that are the most carbon intensive,10 but
it is important to bear in mind that among carbonintensive sectors, only a small number of industries are
in fact responsible for most of the GHG emissions
(box 1.3).
Even within sectors, CO2 intensity varies considerably.
For example, the energy sector in Brazil is relatively lowcarbon intensive (based on hydro power) but it is highly
carbon-intensive in South Africa where energy is mainly
generated through coal combustion. Similarly, many agricultural farms in developing or emerging economies still
operate with non-industrial methods. In these cases the
10
High carbon intensive industries or sectors are those for which CO2
emissions are greater than the median of the economy. See also IILS, 2009.
13
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Box 1.3 Employment and skill levels in carbon-intensive sectors
At first glance, employment levels in the carbon-intensive sectors are relatively high, accounting for an average
of just under 40 per cent among G20 countries (table 1.6). In some instances, for example China, Indonesia
and Turkey, employment in these sectors represents more than half of national employment. Generally, highincome countries have lower levels of employment in key emitting sectors. For instance, the United States (at
less than 30 per cent) has the lowest employment share in high-emitting sectors, followed by Canada.
However, the ILO estimates that, among advanced economies, some 15 industries account for approximately 70
per cent of all emissions.11 These industries are also likely to be among the top CO2 emitters in developing
countries, given that following a similar development path to industrialized countries will soon result in ratios
of carbon intensity that match those of industrialized countries.
For the countries that have data available, the share of total workers in the top 15 emitting industries is strikingly
low. In the United States, for instance, only 8 per cent of all workers were employed in the top 15 emitting
industries in 2005 (HC15), compared to nearly 45 per cent in all high-carbon industries. Similar trends are observed in other countries: in the EU, only 10 per cent of employed persons work in the most polluting industries,
whereas in Japan and the Republic of Korea the figures, albeit higher, are still comparatively low, at 15 and 12
per cent respectively.
Table 1.6
Employment shares and skill level in carbon-intensive sectors (percentages)
Employment share in carbonintensive sectors
Share of low-skilled workers in
low- vs. high-carbon sectors
HCIS
Top 15
industries
LCIS
Top 15
industries
Australia
45
12
35
26
Canada*
48
23
–
–
EU**
41
10
18
26
France
39
9
17
24
Germany
41
9
28
34
Japan
46
12
7
21
Republic of Korea
47
15
8
35
United Kingdom
38
7
10
15
United States
45
8
8
14
14
* Data is for 2005, except for Canada (2010) for the employment share (for the share of low-skilled it is also for 2005).
** Data for employment share in HCIS is for EU15, whereas for the share of low-skilled workers it is for EU20.
Note: HCIS refers to all high-carbon intensive sectors (above the median) taken together. The top high carbon-intensive sectors include agriculture,
mining and quarrying, manufacturing transport. “Low-skilled” refers to education levels. Therefore strict comparisons across countries should
be made with caution. The employment shares of low-skilled workers are based on the total of hours worked in the economy.
Source: ILO estimates based on EU KLEMS and national statistics.
Despite the relatively low shares of employment in the most polluting industries, the share of low-skilled workers
in the top 15 emitting industries is often high and exceeds that in low-carbon industries – at least for advanced
G20 countries with available information. For instance, among the countries with skill data presented above,
the share of low-skilled workers is higher in the top 15 industries by 8 per cent in the EU and as much as 27
per cent in the Republic of Korea. These workers face greater difficulties in transitions to a greener economy;
therefore, labour market measures, such as training programmes, are particularly important for keeping them in
employment.
11
For example, in the EU the top four polluting industries are: electrical
energy, gas, steam and hot water; coal and lignite; products of agriculture,
hunting and related services; and other non-metallic mineral products. See
IILS, 2011a: 13.
Chapter 1: Employment and income implications of a move to a green economy
carbon-intensity of the sector as a whole is much lower
than agricultural industries in developed economies.
For this reason, it will be critical to examine green policies by sector on a case-by-case basis (Jarvis et al., 2011).
The key challenge is to develop a practical interpretation
of environmental sustainability for each of the main sectors
that can be agreed upon and supported by policy-makers
and the other main stakeholders. The process of developing this definition is likely to draw on national policies
and priorities as well as on international benchmarks.
With this in mind, Chapter 2 examines issues in the
agricultural sector, which has the greatest share of employment and the highest concentration of poverty among the
industries considered. The chapter analyses the need to
balance environmental issues – agriculture is the biggest
user of water and a central cause of land degradation –
with the need to guarantee food security to a continuously
growing world population and to generate higher incomes
for smallholder farmers.
Chapter 3 analyses the environmental impact of the
destruction and degradation of forests – which causes the
biggest loss of biodiversity and is the second largest source
of GHG emissions – as well as different best practices and
country examples for achieving sustainable forest management, good labour practices and social inclusion.
Chapter 4, on fisheries, reveals how, despite employing
a relatively small share of the global labour force, greening
the sector is necessary to ensure the sustainability of the
industry from an ecological and food security perspective,
despite the challenges that this process will cause for employment in fishing. Chapter 5 discusses the
transformation of the energy sector due to the urgent need
to reduce GHG emissions through gains in energy effi-
ciency and a rapid shift towards renewable sources, and
reveal the potential benefits for employment and social
inclusions.
Chapter 6 focuses on resource-intensive sub-sectors of
manufacturing in which greening will help to secure the
viability of the industries and their workforce. Chapter 7
covers the issue of greening the recycling industry.
Although the share of employment is relatively small –
20–25 million workers, most of them in the informal
sector – waste management is crucial in a world faced with
exponentially increasing volumes of often hazardous
waste. Increased recycling would have positive environmental effects, while at the same time upgrading job
quality and boosting employment creation.
Chapter 8 examines the role of the building industry
– the biggest consumer of energy and emitter of GHG
globally. Yet the chapter illustrates that the potential for
greening the sector is high and will generate substantial
benefits in terms of employment. Chapter 9 covers the
transportation sector and examines the possibilities for
promoting rail and public transportation, while increasing
the energy efficiency of motor vehicle and air transportation as means of greening the sector.
Finally, the purpose of Chapter 10 is to highlight the
necessary conditions, policy prescriptions and good practices required to achieve a sustainable development model
and ensure that the green economy is one that is characterized by gains in job quality, reductions in poverty and
improvements in social inclusion. It recognizes the regional-, country-, and sector-specific challenges while
ensuring that opportunities for decent work and social inclusion are achieved.
15
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Jamasb, T.; Meier, H. 2010. Energy spending and vulnerable households, EPRG Working Paper 1101,
Cambridge Working Paper in Economics 1109 (Cambridge).
Jarvis, A. et al. 2011. Assessing green jobs potential in developing countries: A practitioner’s guide
(Geneva, ILO).
Kozujl, R. 2009. Contribución de los Servicios Energéticos a los Objetivos de Desarrollo del Milenio y a
la mitigación de la pobreza en América Latina y el Caribe, CEPAL. Available at:
http://www.eclac.cl/drni/noticias/noticias/6/37496/Kozulj.pdf [17 May 2012].
Lampietti, J.; Meyer, A. 2002. Coping with the cold. Heating strategies for Eastern Europe and Central
Asia’s urban poor (Washington, DC, World Bank).
Legros,G. et al. 2009. The energy access situation in developing countries: A review focusing on the Least
Developed Countries and Sub-Saharan Africa (UNDP and World Health Organization).
Available at: http://content.undp.org/go/cms-service/stream/asset/?asset_id=2205620 [17 May,
2012].
Meikle, S.; Bannister, A. 2003. Energy, poverty and sustainable urban livelihoods, Working Paper 126
(Development Planning Unit, University College London).
Nordhaus, W. (2007). The challenge of global warming: Economic models and environmental policy.
O’Connor, S. 2011. Affordable energy policy: Energy efficiency and affordability division (Department
of Communications, Energy and Natural Resources, Ireland).
Organization for Economic Cooperation and Development (OECD). 2012. OECD Environmental
Outlook to 2050 (Paris). Available at: http://dx.doi.org/10.1787/9789264122246-en [15 May,
2012].
—; Food and Agriculture Organization (FAO) of the United Nations. 2011. OECD-FAO
Agriculture Outlook 2011–2030 (Paris).
Rockström, J. et al. 2009. “A safe operating space for humanity”, in Nature. Vol. 461, pp. 472–475
(24 September).
Rosenfeld, J. et al. 2009. Averting the next energy crisis: The demand challenge (McKinsey Global
Institute, McKinsey & Company).
Stern, N. (2007). The economics of climate change: The Stern Review (Cambridge University Press).
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Stoevska, V. 2011, Statistical definition of green jobs (ILO Department of Statistics, mimeo).
Sugrue, A. 2005. Energy for sustainable development, presentation to the Parliamentary Portfolio
Committee for Minerals and Energy, 9 March, South Africa.
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and fair energy (Madrid). Available at: http://www.sustainlabour.org/documentos/EN1612008.pdf [17 May 2012].
The Economics of Ecosystems & Biodiversity (TEEB). 2009. The economics of ecosystems and biodiversity for national and international policy makers – Summary: responding to the value of nature.
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natural resource use and environmental impacts from economic growth (Nairobi).
—. 2010. Assessing the environmental impacts of consumption and production: Priority products and
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18
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in a sustainable, low-carbon world. Available at:
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Chapter 2
Agriculture
Main findings
● In no other sector do the social and the environmental
challenges stand in greater contrast to one another.
With a global workforce of over one billion – about
one in every three workers – agriculture is the largest
single employer in the world. It is also the sector with
the highest concentration of poor people, two-thirds
of whom live in rural areas. Yet, agriculture is one of the
largest emitters of greenhouse gases and, very probably,
the sector most vulnerable to climate change. Moreover, it is the biggest user, and a significant polluter, of
water and a key cause of land degradation and loss of
biodiversity.
● Despite these issues, a major increase in food production is needed to feed a growing population and provide a more resource-intensive diet. The evidence
suggests that these challenges can be met if there is a
strong drive to introduce, especially among small-scale
farmers in developing countries, more productive farming methods with a low environmental impact. Equally
important, significantly higher incomes and poverty
reduction can be achieved if output increases while
production costs fall. Low-impact methods tend to be
more labour-intensive, and therefore would allow agriculture to continue to absorb new workers in the short
to medium term. These methods can also improve
working conditions, in particular with regard to occupational safety and health.
● Since an income gap between farm and non-farm
households has widened over the past decades, successful outcomes will require a narrowing of this gap. In
particular, over the longer term, growing mechanization and an increase in the average size of farms are
likely to be necessary to ensure incomes in agriculture
remain attractive relative to those in other sectors. One
of the most important policy measures to achieve this
outcome is that of enhancing the skills and capabilities
of smallholder farmers in developing countries. To do
this, investment in extension services will be required,
and will need to be complemented by rural infrastructures and the development of non-farm rural economy.
● Social protection schemes, as promoted in the UN Social Protection Floor Initiative, can also play a major role
in sheltering rural communities from crop failures, injecting finance in cash-starved rural areas and creating
infrastructure. The Rural Employment Guarantee Act
in India, for example, links direct income transfers
through public works programmes with investment in
rural water management, irrigation, soil improvement
and access to roads.
● Solutions must be adapted to specific situations, built
on the local farming system and developed in cooperation with the farming communities themselves. The
organization of farmers and workers is an important
stepping stone to give rural communities a voice in policy-making for rural development and greening agriculture. It will also be critical for acquiring the
capability to implement more productive, low-environmental impact farming methods. The formation of cooperatives can help with access to know-how, inputs,
finance and markets at fair prices.
19
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Introduction
20
Current projections indicate that the world will need 70
per cent more food in 2050 (compared with 2000) for
the anticipated 9.2 billion people. Achieving food security
globally continues to be a challenge, not only for developing, but also for developed nations.
Despite the fact that a portion of agricultural activity
is devoted to the growing of green products, it is not, in
the ecological sense, a particularly green sector. The global
agricultural industry is, in fact, a significant polluter, with
crop and livestock production being the main sources of
nitrate, phosphate and pesticide pollution (see Chapter
1). It is also a key cause of land degradation through salinization, the over-extraction of water and the reduction of
genetic diversity in crops and livestock. Moreover, agriculture is also the main anthropogenic source of
greenhouse gases such as methane and nitrous oxide, estimated to be responsible for 13.5 per cent of total global
emissions (IPCC, 2007) and one of the main drivers of
deforestation (see Chapter 3). The share of emissions is
considerably higher for emerging economies. In China,
for example, the agricultural sector emits 21 per cent of
total national GHGs, mostly as a result of rice cultivation,
while in Brazil, emissions from agriculture, including from
deforestation, account for 57 per cent of the national total.1
Agriculture is thus at the same time the sector most im-
pacted by climate change and one of its largest contributors. Finally, agriculture is a major consumer of resources,
accounting for 38 per cent of global land use and 70 per
cent of fresh water consumption (OECD, 2008).
Any meaningful discussion of agriculture and agricultural reform has to take into account the heterogeneous
nature of the sector, which is characterized by major differences in production systems and types of farms
between, but also within, countries. Multinational agroindustries, family farms and subsistence production units
coexist, but differ significantly in terms of natural resource
use, land tenure, capital, technology and many other variables, including, notably, the numbers of people employed.
The majority work on small farms, often referred to as
smallholdings, family farms, subsistence farms or resourcepoor farms.2
Taken as a whole, agriculture is the largest employer
in the world with a workforce of over 1 billion, though
the share of the sector in total employment has fallen in
the past two decades from 45 per cent to around 34 per
cent today (ILO, 2012). In many developing countries
the percentage is much higher than that. In India, for
example, over 60 per cent of the country’s working population is engaged in farming of one sort or another,
while in Mali, 83 per cent of the workforce relies on agriculture for some or all of its income (ILO and
CEDEFOP, 2011). At the same time, the share of agri-
Figure 2.1 The contribution of the sector to the global GDP and employment
GDP composition
Labour force composition
Agriculture 6%
Industry 31%
Industry 22%
Services 63%
Agriculture 34%
Services 44%
Source: CIA, 2012; ILO, 2012.
1
Available at http://unfccc.int [accessed 1 Apr. 2011].
2
There is no common definition of what a small farm is. The World
Bank’s Rural Strategy has defined “smallholders” as those with a low asset
base operating on less than 2 hectares of cropland. On the basis of that
figure, 85 per cent of the world’s 525 million farms are smallholdings, and
75 per cent of these are made up of less than 1 hectare of land (ILO, 2008).
Chapter 2: Agriculture
culture in employment in most countries and globally
is much higher than its contribution to GDP. Despite
employing one-third of the global workforce, agriculture
only generates 6 per cent of world GDP (figure 2.1).
This situation has been exacerbated by the fact that in
Sub-Saharan Africa per capita incomes in agriculture
are growing much more slowly than agricultural GDP
(0.9 per cent against 2.8 per cent) (World Bank, 2008).
Incomes in agriculture are thus typically much lower
than average and often below the poverty line. Twothirds of all poor people in the world live in rural areas
and derive their incomes from agriculture.
The challenges of adaptation to climate change are
most severe in arid and semi-arid developing countries,
where a high proportion of the population lives in rural
areas. This is notably the case in Africa, where it is estimated that some countries could see a reduction in
yields from rain-fed agriculture of up to 50 per cent by
2020. For this reason — and others connected to climate
change such as increased water stress – agricultural production, rural livelihoods and access to food are likely
to be severely compromised in many areas of the continent, endangering food security and exacerbating
malnutrition (IPCC, 2007). Perhaps more than in any
other sector, the issue of greening in agriculture must
integrate socio-economic, environmental and climate
concerns.
A. Technical and policy options
for greening agriculture
At the heart of agricultural greening is the idea of
ecosystem management and husbandry rather than excessive reliance on external agricultural inputs like
chemical fertilizers, pesticides, mechanization using
fossil fuels, livestock growth hormones and feed additives. But the greening of agriculture requires a holistic
approach based on the understanding that regional conditions require locally adapted systems (FAO/WHO,
1999). Broadly speaking, agricultural greening should
be undertaken with a view to increasing sustainability,
notably by reducing the negative impact of agriculture
on the environment. Indeed, it is hoped that in some
cases agriculture can actually help in reversing those impacts by, for example, augmenting the storage of carbon
in soils, enhancing the filtration and retention of water
and preserving (or even increasing) biodiversity.
1. Technical options3
Five areas are the key to greening agriculture (UNEP,
2011a): (i) soil fertility management; (ii) more efficient
and sustainable water use; (iii) crop and livestock diversification; (iv) biological plant and animal health
management; and (v) appropriate farm-level mechanization.
Integrated soil management (ISM) and integrated
plant nutrient management (IPNM) involve the careful
management of nutrient stocks and flows in a way that
ensures profitable and sustained production. ISM also addresses other important aspects, such as maintaining
organic matter content, soil structure and soil biodiversity
– that is, the plethora of living organisms in the soil, from
the microbial level up to familiar macro-fauna, such as
earthworms and termites. Instead of adding synthetic fertilizers to boost crop yields, farmers use manure and crop
residues, or cultivate leguminous plants, relying on the rhizobial bacteria living in their root nodules to fix nitrogen
from the air and add it to the soil (FAO, 2012). Mixed
cropping also allows better nutrient management and diversification of production, as well as integrated pest
management.
Improved water harvesting, retention and irrigation
are crucial to boosting production and to addressing the
increasing irregularity of rainfall patterns. Today, irrigation
is practised on only 20 per cent of the agricultural land in
developing countries, despite the fact that it can generate
130 per cent higher yields than rain-fed systems. Where
rain-fed agriculture has to be relied on, zero-tillage, that
is, avoidance of ploughing and soil disturbance, significantly reduces water loss and increases yields. Another
approach being used in settings where rainfall cannot be
relied on is the planting of drought-tolerant crops, the cultivation of which is crucial to achieving food security.
Typically, local crops provide the gene pool necessary to
allow selection of the best adapted varieties. It is also worth
noting that the building of soils with a high content of organic matter has positive effects on soil drainage and water
retention capacity, including groundwater recharge and
decreased run-offs (FAO, undated).
Investment in livestock as an element of greening
strategies offers a number of benefits, including soil enrichment, animal draught and the extension of the land
area utilized; also, importantly, it opens up the possibility
of livelihood diversification. Diversification is usually
achieved by introducing a new productive activity, such
3
This discussion of technical options draws heavily on the UNEP
(2011a) Report: Towards a green economy: Pathways for poverty eradication.
21
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Box 2.1 Empirical evidence of yield increases from greening agriculture in developing countries
In general, measures for greening agriculture are effective in increasing yields at various levels of farm operations.
A meta-study by Pretty (2006) covered 12.6 million farms in 57 poor countries, encompassing over 37 million
hectares (3 per cent of the cultivated area in developing countries). The analysis found an average yield increase
of nearly 80 per cent as a result of farmers adopting 286 recent best practice initiatives, including integrated pest
and nutrient management, conservation tillage, agroforestry, aquaculture, water harvesting and livestock integration.
Water-use efficiency improved in all crops, with the highest improvement occurring in rain-fed crops. The carbon
sequestration potential averaged 0.35 tonnes of carbon per hectare per year. Among projects with pesticide data,
77 resulted in a decline in pesticide use by 71 per cent, while yields grew by 42 per cent. In another example,
bio-dynamic farms recorded a 100 per cent increase in productivity per hectare due to the use of soil-fertility techniques, such as compost application and the introduction of leguminous plants into the crop sequence (Dobbs and
Smolik, 1996; Drinkwater et al., 1998; Edwards, 2007).
For small farms in Africa, where the use of synthetic inputs is low, converting to sustainable farming methods has
increased yields and raised incomes. In a project involving 1,000 farmers in South Nyanza, Kenya, who are
cultivating two hectares each on average, crop yields rose by 2–4 tonnes per hectare after an initial conversion to
organic farming. In yet another case, the incomes of some 30,000 smallholders in Thika, Kenya, rose by 50 per
cent within three years after they switched to organic production (Hines and Pretty, 2008).
Source: UNEP, 2011a.
22
as a dairy unit, on a holding previously used only for
growing crops. This not only adds to total farm production
and household income, but may also alleviate risks
(Upton, 2004).
There is ample scope for increasing food supplies and
food security in developing countries through simple targeted investments in pre- and post-harvest supply chains.
Along the entire value chain, a significant share of food is
lost or wasted. In developed countries this primarily occurs
in the retail, home and municipal food-handling stages.
Losses in developed countries are often attributable to factors such as retailers’ rejection of produce due to poor
appearance or supersized packages which lead to post-retail spoilage. The latter can account for up to 30 per cent
of the food bought by retail distributors. Post-retail food
losses tend to be lower in developing countries. There,
they mainly result from a lack of storage facilities, on-farm
pest infestations, poor food-handling and inadequate
transport infrastructure (UNEP, 2011a).
An extensive review of the empirical evidence of yield
increases in developing countries points to potential gains
of 50 to 80 per cent on average, for a large area and diverse
farming systems (see box 2.1).
Estimates of the long term returns indicate that, with
an additional 0.16 per cent of the global GDP invested
annually in green agriculture between 2011 and 2050
(compared with business as usual (BAU)), the volume of
agricultural production would be 11.4 per cent higher in
2050, while soil quality would be 42.8 per cent higher
(UNEP, 2011a). Water use would also decline by 34.3 per
cent relative to BAU, and deforestation would drop by
53.3 per cent. Investments are made in more extensive use
of organic fertilizers, agricultural research and develop-
ment, biological pest control (for instance, systems that
use natural predators) and improvements in food storage
and processing.4
2. Policy instruments being applied
Policy instruments for greening tend either to encourage
greener practices or to discourage production methods associated with the harmful environmental effects of
agriculture.
Low-impact and organic farming support payments:
Policy support schemes specifically targeted at organic
farming have existed in Europe for more than 20 years,
with Member States providing financial support for conversion to organic farming. Support payments take a
number of forms, including payments based on farm-fixed
assets, where monetary transfers are made to offset the investment cost for farmers of adjusting farm structure or
equipment to adopt more environmentally friendly
farming practices, or to purchase conservation easements.
These instruments create thereby a legally enforceable land
preservation agreement between a landowner and a government agency. Payments can also be made in cases of
“land retirement”, that is, when farmers retire eligible environmentally fragile land from commodity production
for a given contract duration. Annual monetary output or
input-based transfers to farmers to support site-specific
production practices that have the greatest net environ4
The business-as-usual (BAU) scenario assumes the same amount of
money is spent on current practices.
Chapter 2: Agriculture
Box 2.2 Low-carbon agriculture in Brazil
As part of the Brazilian strategy to reduce carbon emissions by 2020 and to increase food production without deforestation, the Brazilian Ministry of Agriculture (MoA) is implementing a programme called ABC (Agricultura de
Baixo Carbono) – Low Carbon Agriculture. Created in 2010, the programme grants incentives and resources to producers to adopt sustainable techniques. The ABC Programme hopes to reduce emissions by 30.8 per cent by
2020, by cutting emissions from farming operations and by avoiding deforestation.
According to the MoA, over the next decade 20,000 qualified technicians will assist 900,000 farmers. In some
Brazilian states, groups of managers have already been formed, with the participation of state authorities and representatives of both workers and employers. The managers will be responsible for administering the activities of
the Technical Assistance and Rural Extension Programme and will also facilitate access to credit. A credit line of
R$3.5 billion (approximately US$2.1 billion) was also set up in 2011. It offers an annual interest rate of 5.5 per
cent, with a grace period of 8 years before a 15-year period for repayment of principal. The five states that have
already formed groups of managers (Goiás, Mato Grosso, Rio Grande do Norte, Tocantins and Minas Gerais) will
prioritize three out of the six eligible production technologies included in the programme: no-tillage system of direct
plantation in straw; crop–husbandry–forestry integration; and recovery of degraded land. These technologies were
chosen due to their relevance to the local production base. Other states may have other priorities, such as reforestation,
the treatment of animal waste or biological nitrogen fixation.
To support the work in the field, an information campaign was launched, including general explanatory videos on
the programme, on the benefits of sustainable practices in agriculture and on the conditions governing access to
credit.
Sources: Ministerio de Agricultura, Pecuaria e Abastecimiento (Brazil), undated; Secretaria de Comunicacao Social da Presidencia da Republica
(Brazil), undated; Agrosoft Brasil, undated.
mental benefit have also been used. A good example of
this is Brazil’s low-carbon agriculture scheme, which extends low-interest credit to farmers adopting low-carbon
agricultural practices that increase the food supply without
threatening forests (box 2.2).
Subsidies: Governments should phase out subsidies for
unsustainable farming methods that rely on the intensive
use of fossil fuels, while encouraging efforts to adopt more
sustainable practices. In many developed countries, largescale commodity crop agriculture is heavily subsidized.
These policies encourage crop monocultures (such as corn,
wheat, rice, soybeans, sugar and cotton) and undermine
farmers who cultivate a broad variety of grains, vegetables
and fruits. Subsidies distort markets, providing an unfair
advantage to farmers in developed countries over those in
other parts of the world who do not receive comparable
subsidies. These payments have been a key factor in the
rapid growth of international trade in crop commodities
and have undoubtedly been instrumental in reducing private sector incentives to invest in developing countries’
agricultural sectors for decades. The continuation of these
subsidies is undoubtedly hindering the necessary investment for a transition to a green agriculture (Herren et al.,
2011).
Training and extension services: In industrialized countries, public financial support is needed to reduce the costs
of sustainable production equipment and of farmer
training and extension services. It can as also offer temporary compensation assistance to farmers, especially during
the early transition years, when yields run the risk of being
adversely affected. In developing countries, green investment is primarily required for immediate soil
improvements. This can be achieved through an increased
application of organic and mineral fertilizers, through the
provision of improved seeds for food and fodder crops and
by purchasing or hiring minimum tillage farming implements. A radical change in policies as well as in investments
is consequently needed to alter the prevailing trends in
these regions (IAASTD, 2009). For all farmers in developed and developing countries, training is the single largest
investment need. In developing countries in particular,
such training will also improve the quality of agricultural
jobs and help to reduce rural out-migration (Herren et al.,
2011). Training should notably include technical and entrepreneurial components.
Environmental taxes/charges: Taxes, or other charges
contributing to the internalization of costs related to pollution or environmental degradation, are an equally
important tool. They can create a level-playing field for
green agriculture versus the resource-intensive agriculture
that is currently widely practised. This includes taxes and
charges on farms’ inputs that are a potential source of environmental damage.
Certification schemes: Products from sustainable agriculture command a price premium in many markets.
Certification allows product differentiation and provides
information about certain characteristics of a product, for
instance the sustainability aspects of a fruit or vegetable.
23
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Depending on how sensitive a market is to specific product
attributes, certification may have a significant market impact, affecting both domestic and imported products.
However, certification is costly and small farmers cannot
always afford to certify their products.
There are a number of critical support measures that
should accompany the greening of agriculture in order to
render any such strategy socially and economically sustainable. One objective is to improve the security of tenure for
smallholders in developing countries in order to encourage
investments in sustainability. Another measure is to invest
in rural infrastructure, particularly roads for market access,
water management and access to modern energy.
3. Market trends
24
On the supply side, the rising price of inputs such as energy,
fertilizers and synthetic pesticides, as well as increasing
water scarcity and shrinking arable land share contributing
to the adoption of practices that are resource-saving and
less intensive in the use of energy and chemicals. On the
other hand, the market for organic food is expanding rapidly. For instance, in the United States alone, sales of
organic food and drink have grown from US$1billion in
1990 to US$26.7 billion in 2010 (OTA, 2011). Among
the reasons for the increasing demand for organic products,
one can identify evolving consumer tastes, health concerns
and environmental considerations (Knudson, 2007).
Another driver of organic production is the significant
price premium that consumers are willing to pay for organic food (USDA, 2011).
According to projections from the International Trade
Centre (ITC), in 2010 the organic market, including nonfood products, was estimated at US$46 billion in the
European Union (EU), US$45 billion in the United States
and US$11 billion in Japan. The organic food and beverages segment was expected to reach US$60 billion by 2011,
more than tripling in value from 2000 levels. It is projected
to reach US$104.5 billion by 2015 at an estimated compound annual growth rate of 12.8 per cent (Altprofits,
2011).
One important consideration with respect to the
greening of agriculture is that there are only a few large
companies in the value chain. According to UNEP’s 2008
report on green jobs (UNEP et al., 2008), in 2008 the ten
largest firms in agriculture controlled about 80 per cent of
the global food market. Just two companies distributed 80
per cent of the world’s grain. In the United States, six
companies accounted for 42 per cent of the food retail
market in 2001, a jump of 24 per cent as compared with
1997. There is a similar concentration among suppliers of
agricultural inputs such as seeds, fertilizers and pesticides.
These monopolies in the food market raise concerns about
fair pricing. However, it can also benefit small producers,
who might gain from the provision of organizational services and are guaranteed a buyer at the end of the supply
chain. Improving access to markets, however, could be an
important step in helping producers to increase their bargaining power.
B. Impacts of greening on
employment and incomes
in agriculture
1. Impacts on employment
Within sustainable agriculture, many low-impact and organic farming practices tend to have higher labour
requirements and, in consequence, create more direct jobs
per unit of output than traditional agriculture. A study by
Offermann and Nieberg (2000) using annual work unit
(AWU) per 100 hectares of utilizable agricultural area
(UAA) to compare the labour requirements in organic and
conventional farms in a representative selection of
European countries found that, except in five cases, organic
methods require more labour than conventional methods.
Similarly, a study of 1,144 organic farms in the United
Kingdom and the Republic of Ireland concluded that organic farms employ 135 per cent more full-time equivalent
(FTE) jobs per farm than conventional farms (Morison et
al., 2005). More recently, a study released in May 2011 by
Britain’s Soil Association concludes that organic farming
provides, on average, 32 per cent more jobs per farm in
the United Kingdom than conventional agriculture.
According to the study, 93,000 new jobs could be created
if all of Britain’s farms were to switch to organic practices.
Such job creation could not be replicated in non-organic
farming, the report notes, because it is the system of organic
farming itself that demands more labour and creates more
jobs (Worldwatch Institute, 2011).
The higher labour intensity observed in organic systems is especially true in areas of low ecological potential
(Rehber and Turhan, 2002) and organic farming can boost
in particular rural employment (Nemes, 2009). A number
of other benefits also flow from sustainable farming practices (Herren et al., 2011):
Chapter 2: Agriculture
Box 2.3 Employment benefits of organic cotton and sugarcane in India
Cotton plays a dominant role in the rural Indian economy, employing 7 million people and accounting for 38 per
cent of exports. Cultivated on 5 per cent of arable land, cotton farming consumes 54 per cent of total pesticides
used in agriculture, causing considerable environmental pollution. Conventional cotton growing also leads to soil
depletion. This and other factors have prompted the demand for organic or green cotton.
By comparing organic and traditional systems in the Punjab state, Sharma and Pandove (2010) found that organic
methods utilized more labour in fertilization, irrigation and plant protection. Gross returns from organic farming
were established at Rs23,015.6 per hectare, which were on average 44 per cent higher than net returns of
Rs15,934.8 per hectare from non-organic farming. No major impact on yields per acre was reported. The authors
estimate that if cotton cultivation were converted to organic, there would be scope for the creation of 7,780 million
additional hours of work, which represent approximately 2.68 million jobs. Regarding incomes, a study by Greenpeace
(Tirado, 2010) found that in the year 2009–10, farmers cultivating cotton through organic practices earned 200
per cent more net income than farmers who grew genetically engineered cotton.
India is also a large producer of sugar cane, a crop cultivated on 4 million hectares and employing over 7.5 per
cent of the total rural population. The comparison between organic and inorganic sectors revealed that, on average,
labour requirements are 16.9 per cent higher in the organic segment because of preparatory tillage, manuring,
green manuring and managing pests and diseases. It is estimated that total additional job potential is approximately
155.4 million days of work, equivalent to 0.42 million additional jobs.
Furthermore, the intercropping typically found on organic sugar-cane farms (with crops having various planting and
harvesting schedules) may distribute the labour demand more evenly, which could help to stabilize employment.
This implies that organic sugar-cane farming may provide an opportunity to the rural population of sustained paid
farm employment throughout the year. Table 2.1 summarizes the main figures.
Table 2.1
Labour requirements in organic and traditional production in India
Crop type
Cotton (organic)
Labour
(days per hectare)
621.4
Cotton (non-organic)
513.54
Sugar cane (organic)
251.08
Sugar cane (non-organic)
214.79
Additional labour
(days per hectare)
Additional jobcreation potential
107.86
2,680,000
36.29
420,000
In general, in organic production, higher returns are related to lower costs on external inputs, such as synthetic
fertilizers, together with similar or higher yields and premium prices. Rajendran et al. (1999) concluded that the
productivity of organic farming may be less in the initial years, but that net incomes will increase progressively,
surpassing non-organic farming incomes by the fourth year. A long-term experiment reported by Rupela et al. (2004)
also supports the view that yields of different crops in low-cost sustainable systems, in particular annual productivity
(rainy and post-rainy season yields), are comparable to those of conventional non-organic systems.
Conversion to organic farming also reduces reliance on credit and the risk of crop failure due to pests, disease and
droughts, thereby reducing vulnerability. In addition, the enhancement of natural assets, reduced risk of pesticide
poisonings, improved food safety, higher levels of self-sufficiency, and access to networks supporting knowledge
exchange and political participation are regarded as important benefits of the conversion.
Source: Based on Sharma, forthcoming.
25
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
● No-till cultivation: Studies in Morocco (Pieri et al, 2002;
Sorrenson et al, 1998; GTZ, 1998) indicate that no-till
cultivation offers yields 42 per cent higher than conventionally tilled farms, particularly during periods of
drought. Although labour requirements are 20–50 per
cent lower, daily incomes can double relative to those
earned by conventional farmers. Similarly to a
Paraguayan study (Sorrenson et al., 1998), Herren et al.
(2011) note that “such higher income farm jobs could
be considered more ‘decent’ and greener jobs relative to
the less economically rewarding jobs on conventionally
tilled farms”.
26
● “Push-pull” farming: This method combines several
crops in an intercropping approach for pest control and
soil enrichment, and has been found to require 20–30
per cent more labour than conventional farming. In a
Kenyan field trial, income returns for labour were
higher (US$3.7 per day, compared to US$1 per day for
maize monocropping) due to large yield increases.
Gross revenues of US$424–880 per hectare far outstripped the US$82–132 per hectare range of conventional farms. The farmers are also able to produce milk
and meat from integrated livestock operations and use
the manure as an organic fertilizer.
● Skilled labour pest management: A cocoa field project
applying integrated pest-management (IPM) techniques in southern Cameroon was able to maintain
yields comparable to conventional practices that use
fungicides. The cost of labour increased by 14 per cent,
but total production costs declined by 11 per cent. IPM
translates into more skilled labour input, which means
that a larger share of the proceeds from cocoa production went to workers within the local community. Additional benefits included a reduced outflow of foreign
exchange (reduced expenditure on fungicide imports)
as well as lower health and environmental costs from
reduced fungicide use.
Importantly, however, as organic farms become established,
and possibly larger, they may become more efficient and
adopt labour-saving technologies (which could reduce its
employment content). Furthermore, an increased demand
for labour will not necessarily result in the creation of sustainable full-time employment. In many farms, the
increased demand for labour is to a large extent covered by
seasonal workers. In some countries and regions within the
EU, these workers come from non-Member States, such as
Eastern European countries or North Africa (Offermann
and Nieberg, 2000).
A forthcoming paper by the ILO examines the job creation potential of sustainable agriculture as well as the extent
to which green jobs are ‘decent’ in the agricultural sector
in India. The document, based on an extensive literature
review and on an interaction with experts from the Indian
National Organic Farming Institute, provides evidence for
the cotton and sugar cane subsectors (see box 2.3).
In sum, there is strong evidence that low-impact agriculture generates higher levels of employment than
conventional agriculture, although the precise results depend on the type of farm and crops involved. For
horticulture in particular, labour requirements are much
higher; they may be lower, however, in dairy production.
A macroeconomic model by the Millennium Institute
(Herren et al., 2011) that simulates green investments in
this sector5 suggests that the transition to sustainable agriculture could create over 200 million full-time jobs across
the entire food production system in 2050.6 A critical question, if such a scenario is to be materialized, is whether
agricultural employment would become more attractive.
That is, can it generate incomes above poverty levels in the
short term, and whether these incomes can be competitive
in comparison to other sectors in the medium to long term.
The next section addresses this issue.
2. Impacts of greening on incomes
About 75 per cent of the world’s poor reside in rural areas
and in most developing countries, as both the chances of
being poor and the severity of poverty are greater in rural
than in urban areas. The reasons for low rural incomes include: limited landholding of small farmers; low skill levels
and limited education or training; low-paid and volatile
agricultural wage work; and deteriorating terms of trade
for agricultural commodity exports.
Increasing farm yields can be an effective means to reduce poverty. While it would be a mistake to underestimate
the challenge, it is clear that the greening of agriculture offers rural workers and their families the possibility of
improving their incomes and, as far as possible, increasing
their resilience to the effects of climate change. Sustainable
agriculture and rural development (SARD) constitutes a
comprehensive and powerful approach to balancing the
5
For a full description of the model see UNEP, 2011a.
This includes employment generated from labour-intensive green
farming practices, management and preservation of ecosystems, research
and development and training of rural populations in the use of green agriculture technologies (Pretty, 2006; UNEP, 2008; Lieuw-Kie-Song, 2009;
FAO, 2007; World Bank, 2008).
6
Chapter 2: Agriculture
Box 2.4 The case of Uganda
Agriculture is Uganda’s major source of GDP and employs 69 per cent of the population. Nearly 90 per cent of the 27
million Ugandans live in rural areas and their main activity is agriculture. The sector’s output comes exclusively from
about 4.5 million smallholder farmers, 80 per cent of whom own less than 2 hectares of land (Tumushabe et al., 2007).
Uganda has undergone a significant process of land conversion in the past two decades, starting as early as 1994 when
a few commercial companies chose to engage in organic agriculture. At the same time, there was a general movement
in the agricultural sector towards developing sustainable agriculture as a means of improving people’s livelihoods. By
2003, Uganda had the world’s thirteenth largest land area under organic agriculture production and the largest in Africa
(UNEP, 2011b).
Since then, sustainable practices have continued to expand. According to the Country Report of 2011 (Namuwoza and
Tushemerirwe, 2011), the country has 226,954 hectares under organic agricultural management (up from 210,245
hectares in 2008/09). This was a result of an increase in the number of farmers certified organic from 180,746 to
187,893, representing 1.3 hectares per farmer on average.
Uganda’s certified organic exports increased from US$3.7 million in 2003/04 to US$22.8 million in 2007/08. In terms
of price premiums and income for farmers, studies commissioned by UNEP and UNCTAD (Tumushabe et al.,2007;
UNCTAD/UNEP, 2008) indicate that, in 2006, the farm-gate prices of organic pineapple, ginger and vanilla were 300
per cent, 185 per cent and 150 per cent higher, respectively, than those of conventional products.
Through organic farming, Uganda has not only gained economically, it has also contributed to mitigating climate change.
Indeed at present, greenhouse gas (GHG) emissions per hectare are estimated to be, on average, 64 per cent lower than
emissions from conventional farms. Various studies have shown that organic fields sequester 3–8 tonnes more carbon
per hectare than conventionally cultivated fields (UNEP, 2010).
social, economic and environmental aspects of development, while providing lasting employment, sufficient
income and decent living and working conditions for all
those engaged in agricultural production.
There are many examples of higher productivity and
profitability in developing countries owing to the adoption of sustainable practices in agriculture. For small
farms in Africa, where the use of synthetic inputs is limited, converting to sustainable farming methods has
increased yields and raised incomes. Two examples from
Kenya – one in South Nyanza, the other in Thika – have
already been mentioned in section A1 above. In Uganda,
there has been a major shift towards organic agricultural
production, resulting in a number of impressive gains
(box 2.4).
As seen in the case of India (box 2.3), farmers
adopting greener methods boost their income by reducing expenditure on chemicals, reducing reliance on
credit and lowering the risk of crop failure due to pests,
diseases and droughts. In addition, the conversion to sustainable practices enhances natural assets, reduces the
risk of pesticide poisonings and improves food safety. In
India, it was also apparent that the greening of cotton
cultivation resulted in higher levels of self-sufficiency
and improved access to networks, thus supporting
knowledge exchange and political participation.
However, it was also noted that the most challenging
time was the transition period from conventional to organic agriculture.
This is a widely observed phenomenon. During this
transition period, the price premium has yet to be felt
and yields are low. A joint report by UNEP and
UNCTAD (2008) finds that, in more industrialized
farming systems, after switching from synthetic inputs
to organic systems, farmers usually experience an initial
decline in yields. After the agro-ecosystem is restored
and organic management systems are fully implemented,
yields increase significantly, as illustrated by a survey conducted in the United Kingdom (table 2.2). Almost 40
per cent out of 174 respondents experienced a worsening
of their financial situation during conversion, compared
to 28 per cent that reported an improvement. The perception of farmers reversed when consulted on the
post-conversion period. Half of the respondents (49 per
cent) reported an improvement in their financial situation, while only 18 per cent said that their situation had
worsened.
Green practices in agriculture help to increase the incomes of workers, due to lower input needs, higher yields,
higher prices or a combination of these factors. India’s experience with sugar plantations suggests that, compared
to the conventional option, the cultivation of organic
sugar could represent a 35 per cent difference in the level
of incomes. African data on yield increases suggest more
(up to 100 per cent). Reduced use and more careful selection and application of agro-chemicals not only produces savings on inputs but it also improves occupational
and community safety and health.
27
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Table 2.2
Incomes of organic farmers in the United Kingdom during and after conversion
Large
improvement
(% of
respondents)
Small
improvement
(% of
respondents)
No
change
(% of
respondents)
Small
deterioration
(% of
respondents)
Substantial
deterioration
(% of
respondents)
Don’t know
(% of
respondents)
During
conversion
(n = 174)
5.7
22.4
29.3
25.3
12.6
4.6
After
conversion
(n = 140)
13.6
35.0
17.9
8.6
9.3
15.7
Source: University of Cambridge, 2002.
C. Examples of good practices
28
The implementation and application of sustainable practices within firms and on farms is crucial to enhance and
accelerate the greening of the sector. Large buyers of
farms’ produce can play a pivotal role in the adoption of
more productive and low-impact practices by smallholder farmers, as illustrated by the case of Lecofruit in
Madagascar (box 2.5).
As stated in section A, government support can be
crucial in promoting sustainable agriculture, and government agencies are often best placed to implement the
kind of cross-sectoral initiatives that can integrate agricultural sustainability into broader development
programmes. A good example of this is the Indian
National Rural Employment Guarantee (NREGA)
scheme, which has been in place since 2005 (box 2.6).7
Agricultural extension services provide farmers with
important information, such as patterns in crop prices,
new seed varieties, management practices with respect
to crop cultivation and marketing and training in new
technologies. Extension services improve the knowledge
base of farmers through a variety of means, such as
demonstrations, model plots, specific training and group
meetings. The exposure to such activities is intended
Box 2.5 Plugging into the global value chain
The vast majority of high-value vegetable exports from Madagascar go through a single Madagascar-based company,
Lecofruit. Farmers, working on farms averaging 1 hectare, produce hand-picked French beans and other vegetables
which they sell to Lecofruit. The company sells one-third of its production to supermarkets in France, Belgium and
the Netherlands on the basis of futures contracts, another third to industrial distributors and the remainder to retail
outlets and restaurants. In the 2004/05 season, Lecofruit exported 3,000 tonnes of produce, 70 per cent of which
were French beans. A total of 90 per cent of this tonnage was processed and jarred at its plant in Antananarivo,
then shipped to Europe.
The company successfully transferred a low-impact methodology to its contract farmers. The most important measure
is the restoration of natural soil fertility through composting. Farmers are also applying these methods on land not
producing for export. Compared to similar groups who do not supply to Lecofruit, small farmers that participate in
these contracts enjoy better welfare provisions, more income stability, shorter lean periods and less seasonal fluctuations. For the average household, the contract income represents almost 50 per cent of total monetary income.
About three-quarters of farmers stated that access to a source of income during lean periods was a major reason
for signing the contract, and 66 per cent valued having a stable income throughout the year. Other major reasons
mentioned were access to inputs on credit and the opportunity to learn about new technologies. The survey indicated
that plots with a contract for bean production also saw an increase in the yields of off-season crops and in rice
where yields grew from 3.6 tonnes to 6.0 tonnes per hectare – 64 per cent higher than plots without a contract.
There are thus significant spillovers from contract farming of beans to other crops, in particular the production of
rice, Madagascar’s major staple, probably due to the use of organic and chemical fertilizer in the off-season.
Source: Minten et al., 2009.
7
Renamed the Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA) on 2 October 2009.
Chapter 2: Agriculture
Box 2.6 Indian National Rural Employment Guarantee (NREGA) scheme
Devised as a public work programme, NREGA provides at least 100 days of guaranteed wage employment per
financial year to every household whose adult members volunteer to undertake unskilled manual work. Categories
of work eligible under NREGA include water conservation, drought proofing (including reforestation), flood protection,
small-scale irrigation and horticulture and land development. Environmental protection and conservation constitute
the lion’s share of work performed (figure 2.2). As it would be expected in a programme of this scale, there are
many issues regarding the planning, as well as the embedding into local development strategies, but also concerning
the technical quality of interventions and governance. There is also room for increasing the coverage of families
who are, in principle, entitled to guaranteed work, and for improving working conditions and building pathways out
of what is essentially a transfer scheme. NREGA is nevertheless clearly a major step in the right direction.
Figure 2.2 NREGA employment by type of activity, 2009
Land
development
15%
Other
1%
Rural
connectivity
15%
Water
conservation
50%
29
Irrigation
19%
As shown in table 2.3, NREGA represents a massive investment in the rehabilitation of natural capital related to
poverty reduction.
Table 2.3
Total employment and investment in NREGA
Features
2006/07
2007/08
2008/09
2009/10
Investment (billion US$)
2.0
3.5
5.6
8.1
Number of beneficiary
households (millions)
21
33
45
59
907
1,437
2,163
>3,000
Number of working days
(millions)
The programme has an economic, as well as a social and environmental function, and is part of the broader
sustainable development agenda. The Government of India has a policy of active intervention in this regard which
includes the National Action Plan on Climate Change (NAPCC 2008) and an inter-ministerial task force to deal
with employment issues related to climate change, renewable energies and green jobs.
According to a study conducted by the Centre for Science and the Environment in 2009, the programme managed
most notably to increase water availability and improved agricultural production through better access to irrigation.
This has also led to greater crop diversity and enabled farmers to switch from monocrops to dual crops (UNDP
India, 2010). Similar programmes, albeit on a smaller scale, are also being implemented in South Africa (LieuwKie-Song, 2009, Harsdorff et al., 2011).
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Box 2.7 A cooperative for sustainable production of coffee: The case of Ethiopia
The Oromia Coffee Farmers’ Cooperative Union (OCFCU) brings together smallholder coffee growers. Established
in June 1999 by 34 cooperatives with 22,691 farmers, the cooperative today comprises 197 individual cooperatives
with a total of over 200,000 members. Oromia’s mission is to make small producers economically self-sufficient
and to ensure household food security. A key objective is to improve and maintain the sustainability of the coffee
industry by supporting biodiversity, enhancing soil health through the use of organic compost and to promote environmental protection. Oromia’s coffee is organic, and forest-grown, and no herbicides, insecticides nor chemical
fertilizers are used in its production. Harvesting is carried out by hand. Supervision and inspection are undertaken
once a year by BCS Öko-Garantie, a private agency implementing EU Regulations on organic production.
As a producer of Fairtrade coffee, OCFCU is able to use the Fairtrade Premium and its social fund to finance community development programmes. It has already funded 28 education projects (such as the construction of new
primary schools and the expansion of existing schools), eight health projects (establishment of health clinics,
purchase of medical equipment and maintaining clinic operations), 36 clean water projects, the construction of a
bridge and the improvement of the electrical supply. The OCFCU has also recently created its own members’ bank
which extends credit for much-needed pre-harvest financing. The OCFCU also provides farmers with insurance
options to cover coffee growers against loss.
Source: OCFCU, undated; Alternative Grounds, 2011.
30
solely to increase the ability of farmers to optimize the use
of their resources and ultimately increase their crop yields.
In addition, extension services provide a feedback mechanism from the farmers to the research centres (Muyanga
and Jayne, 2006).
While government action is important, there is much
that farmers themselves can achieve, notably by organizing
themselves into cooperatives. In rural areas, cooperatives
play an important role and are a source of local employment. They tend to be more stable employers, especially
as their members are part of the local community. As individuals and enterprises in a particular community form
cooperatives to serve their needs, cooperatives are less likely
to relocate to lower wage areas, but instead find innovative
ways to retain jobs and to remain competitive. They also
assist in circulating financial resources locally. The services
and products offered assist in keeping money within the
community and so promote further employment opportunities in other enterprises. Likewise, cooperatives
improve the chance of exploiting economies of scale and
improving the members’ bargaining position in the market.
Cooperatives take a variety of forms, including consumers’ cooperatives, producers’ cooperatives and workers’
cooperatives, and operate in a wide range of sectors.
Globally, cooperatives employ around 100 million people,
many of whom live in rural areas. More than 50 per cent
of global agricultural output is marketed through cooperatives (ICA, 2010). Cooperatives often play a key role in
certain sectors, such as rural finance and community
tourism. Furthermore, many cooperative enterprises allow
rural people to have a voice in policy matters. Cooperatives’
values and principles are likely to be especially important
in the rural context (self-help, self-responsibility, democracy, equality, equity, and solidarity) (Henry and
Schimmel, 2011).
The Oromia Coffee Farmers’ Cooperative Union
(OCFCU) exemplifies how agricultural cooperatives improve their members’ capacity to access global markets, as
well as their income and social conditions. In a broader
sense, it is also an illustration of how cooperatives help to
reduce poverty, fight against child labour through education, contribute to the Millennium Development Goals
and promote decent work (box 2.7).
A comparable initiative in Ghana is Kuapa Kokoo, a
Fairtrade-certified cocoa farmers’ cooperative. Established
in 1993 by some cocoa farmers, led by Nana Frimpong
Abebrese and with the help of TWIN Limited UK, the
cooperative derives its strength from the participation of
small-scale farmers at the village level and works to improve
the social, economic and political well-being of its
members.
D. Social and labour: Issues
and challenges
1. Climate change adaptation and rural
employment and incomes
It is generally recognized that the rural poor will experience
the greatest impact of climate change, particularly in areas
already suffering from ecological stresses and food insecu-
Chapter 2: Agriculture
rity. The fourth report by the Intergovernmental Panel on
Climate Change (IPCC) states for example that areas such
as Sub-Saharan Africa – where food typically makes up
more than 60 per cent of the consumption basket –are especially vulnerable to climate change. It anticipates that
agricultural yields will fall by up to 50 per cent in some
countries and between 75 and 250 million more people
could be exposed to increased water stress by 2020 compared to 1990 levels (IPCC, 2007). Given the
vulnerability of agriculture to climate change and the fact
that most agriculture workers are already experiencing
poverty, measures aimed at ensuring a fair transition towards greener practices are essential. A primary critical
step is to identify the impacts of climate change and adaptation measures in agriculture on local employment and
income. In Bangladesh for example – where large sections
of the population are chronically exposed to a range of
natural hazards – there are plans to increase mango cultivation as a way to manage drought and to bring income
to the Barind region. Yet, employment content is much
lower relative to rice cultivation, and a complete shift from
rice to mango cultivation would leave about one-third of
the population in the district without employment or income. A policy to retrain workers for other activities,
increasing their likelihood of obtaining a non-farm income, is imperative. In particular, regional initiatives
should attempt to seize the opportunities derived from
this shift in cultivation. For instance, additional employment opportunities will arise if pulp industries are
developed (FAO, 2006).
Furthermore, it is clear that workers in the agricultural
sector lack even basic social protection. In many developing countries, existing social security coverage is very
limited, particularly in rural areas, the latter being characterized by high poverty levels, high informality and
self-employment, limited payment capacity for services
and correspondingly limited service provision – especially
in health.
There are various social protection instruments that
can be used to reduce vulnerability in agriculture. They
include social safety nets (such as public work programmes
and food aid), social security instruments (including social
assistance and social insurance) and human development
measures (Shepherd et al., 2005). Safety nets are designed
to prevent destitution and to help people cope with emergencies. In the context of greening agriculture, social
protection should aim to preserve the incomes and livelihoods of workers suffering any type of temporary drop in
their economic activity, notably in connection with the
often challenging transition from traditional to organic
production. Social protection coverage can play a major
role in increasing resilience of rural populations to climate
change. This includes, in particular, overcoming significant losses caused by drought, storms or pests. In the
absence of income replacement after calamities, rural populations may not be able to stay on the land until the
following growing season.
2. Job quality
Agriculture ranks among the three most hazardous sectors in both developing and industrialized countries.
Agricultural work is, by its nature, physically demanding,
involving long periods of standing, stooping, bending
and carrying out repetitive movements in awkward body
positions. The risk of accidents is increased by fatigue,
poorly designed tools, difficult terrain, exposure to the
elements and poor general health. Even when technological change has brought about a reduction in the
physical drudgery of agricultural work, it has introduced
new risks, particularly associated with the use of machinery and the intensive use of chemicals without
appropriate safety and health measures, information and
training. Unsurprisingly, the level of accidents and illness
is high in this sector, accounting for half of the global
total (ILO, 2008).
In addition to the absolute number of jobs, it is important that green job opportunities should offer decent
work, i.e. “in conditions of freedom, equity, security, and
human dignity” (ILO, 2000). While much of the employment in green agriculture should generally support
environmental goals, many of these jobs may be of lower
quality, with low wages and long working hours under
extremely poor working conditions. Issues, concerning
for instance forced or child labour, might also arise, especially in developing countries. Indeed, women and
children are the most exposed to these challenges.
Government policies and strategies are necessary to promote decent jobs and address equity issues, as these will
be critical to facilitate a green transition, reduce poverty
and achieve inclusive and sustainable development
(UNEP, 2008).
Gender equality is an integral cross-cutting theme in
the decent work agenda. Women are disproportionately
affected by extremely poor working conditions and they
are less likely to benefit from improvements regarding
the greening of agriculture because they represent the
majority of the world’s poor and have less access to agricultural resources (such as land) and education. Active
labour market reform policies, job standards and broad
31
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
32
social protection are essential to safeguard the rights of
workers and their communities. Green subsidies and tax
incentives for private enterprises could also become conditional upon their provision of decent pay, benefits and
safe working conditions to their workers. Legislation
should also support the provision of adequate training
and educational opportunities, in order to promote skills
for green jobs, with a specific emphasis on promoting
gender equality. It is also important to promote the participation of both women and men in decision- and
policy-making processes (UNEP, 2008; ILO, 2010).
Preliminary evidence indicates that working conditions, rights and standards may be better for workers
engaged in sustainable rather than conventional agriculture. A recent study on Bangladesh for example reports
decent work indicators for a range of jobs in sustainable
sectors, including agriculture, where the smaller size of
organic farms often means there is a closer working relationship between employers and employees (GHK
Consulting, 2010).
Access to training is a major constraint among rural
people in developing countries. For instance, nearly 90
per cent of agricultural workers in India have no formal
training. A study among small-scale entrepreneurs in
Kenya also indicates that over 85 per cent of rural informal sector operators have no business or technical
training at all (ILO, 2011). Training workers in entrepreneurship skills is vital in order improve their
employability and livelihood opportunities, as well as to
reduce poverty, enhance productivity and promote environmentally sustainable development.
E. Conclusions and way forward
Clearly, the greening of the agricultural sector presents
a number of challenges. But it also offers major opportunities for socio-economic as well as for ecological
improvement. Challenges range from producing significantly more food and improving food security at all
levels – not least among farming communities themselves
– to reducing environmental degradation and the sector’s
contribution to climate change. The biggest social challenge that agriculture faces today is the need to create
better quality employment opportunities, with higher
levels of occupational safety and health, as well as with
adequate levels of incomes for workers.
The transition to low-impact agriculture can create
significant additional jobs, while simultaneously improving incomes. In a number of initiatives that focused
on sustainable production, the level of employment has
doubled, with differentials in the levels of income
ranging from 35 per cent to 100 per cent increases for
sustainable practices.
To increase the degree of sustainability in the sector,
further measures will be needed. In particular, training
and extension services are among the most important
measures. Efforts to improve rural infrastructure and facilitate access to technology and finance must also be
made. In addition, self-help programmes, training in entrepreneurship for farmers, as well as agricultural
cooperatives are important means for boosting the level
of organization of small producers and communities’ selfsufficiency.
Over the medium term, additional measures beyond
improving yields per hectare will be necessary. These may
include consolidation in holdings and increasing labour
productivity. Similarly, investments in non-farm employment are urgently needed. A vibrant non-farm rural
economy can develop strong synergies with farming, providing critical inputs and generating local value added from
farm produce. In this respect, the “energy for all” initiative
to be launched by the United Nations (UN), which aims
to ensure universal access to modern energy services, will
primarily benefit rural areas and will have crucial synergy
effects for both agriculture and the non-farm rural
economy.
Climate change poses major uncertainties and risks for
the sector and its workers. Greening goes some way towards improving resilience. However, social protection is
needed to provide a buffer against the disruption of shortterm shocks. This is particularly the case in developing
countries where social protection coverage is very limited
in rural areas.
Moving forward, it will be essential to assess the alternative interventions in consultation with local
governments, representatives of farmers, of trade unions,
women’s organizations and small enterprises, and to
embed feedback and suggestions from communities in
local development strategies.
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Harsdorff, M.; Lieuw-Kie-Song, M.; Tsukamoto, M. 2011. Towards an ILO approach to climate
change adaptation, ILO Employment Working Paper 104 (Geneva).
Henry, H.; Schimmel, C. 2011. Cooperatives for people-centred rural development: Key issues and
policy options to promote the cooperative business model in rural areas, Policy Briefs on Rural
Development (Geneva, ILO).
Herren, H. et al. 2011. Green jobs for a revitalized food and agriculture sector (Rome, FAO).
Hines, R.; Pretty, J. 2008. Organic agriculture and food security in Africa (New York and Geneva,
UNEP-UNCTAD CBTF).
IAASTD, 2009. International assessment of agricultural knowledge, science and technology for
development. 2009. Agriculture at a Crossroads (Washington, DC, IAASTD).
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Intergovernmental Panel on Climate Change (IPCC). 2007. Climate Change 2007: Fourth
assessment report (Geneva).
International Co-operative Alliance (ICA). 2010. Global 300 report 2010: The world’s major
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International Labour Organization (ILO). 2012. Global employment trends 2012: Preventing a
deeper jobs crisis (Geneva).
—. 2011. Skills for rural development, Rural Policy Briefs. Available at:
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Morison, J.; Hine, R.; Pretty, J. 2005. “Survey and analysis of labour on organic farms in the UK and
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Chapter 3
Forestry
Main findings
● The destruction and degradation of forests cause soil
erosion, loss of biodiversity and disturbance of water
regimes on a large scale and are the second largest
source of greenhouse gases (GHG). Continued loss of
forests also threatens the livelihoods of 44 to 64 million workers employed in the forestry sector and of
some 410 million indigenous people and communities, mostly in developing countries, who depend on
forests for all or part of their livelihood. Unsustainable
forest use has led to significant employment losses in
a number of countries, particularly in Asia.
● Under sustainable management and use, however,
forests can be one of the largest renewable sources of
raw material, energy and environmental services.
Where forest legislation has been enforced and enabling conditions have been met, both direct and indirect green jobs have been created and promoted
through forest conservation, reforestation, agroforestry and sustainable forest management. At least
2 million jobs in the forest industries (15.6 per cent of
total formal employment) are based on certified sustainable management and can be regarded as green
jobs.
● Sustainable forest management requires a competent
and motivated workforce. Brazil has incorporated
ILO guidelines for forestry work into its provisions
for forestry concessions in public forests. Voluntary
certification schemes, which cover 9.38 per cent of forest areas globally, have been instrumental in promoting
good workplace practices, skills upgrading and respect
for labour standards, including the freedom of association, as well as the rights of indigenous peoples and
forest communities.
● Achieving the protection and sustainable use of forests
will often depend on overcoming deep-rooted poverty
and the lack of productive employment opportunities.
The success of China’s ban on unsustainable logging
and its programme of reforestation is measured not
only by the degree of environmental improvement, but
also by the extent to which underlying social problems
have been tackled. A just transition strategy was put
in place to provide alternative employment and livelihoods for almost one million forestry workers who
lost their jobs following the implementation of the
ban. China’s extensive reforestation programme also
includes investment in improving the livelihoods of
large numbers of local farmers.
● Payments for ecosystem services create strong incentives for small forest owners and farmers to invest in
sustainable forest practices and rehabilitation. Although an international agreement on Reduced
Emission from Deforestation and forest Degradation
plus positive management (REDD+) is still under negotiation, the initial experience of a number of developing countries demonstrates the employment,
income and poverty reduction potential of such
payments. Brazil, for example, has extended its
social protection system to include payments for
ecosystem services and to provide an incentive to
adopt environmental practices.
37
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Introduction
38
The forest industry comprises three subsectors: forestry,
wood processing, and pulp and paper production.1 In
many countries, forest-related industries are an important source of employment, economic growth and
livelihood, particularly in regions where few other employment opportunities exist. According to the Food
and Agriculture Organization (FAO, 2011), formal employment in the forestry value chain stood at 13.7 million
globally in 2006, equivalent to 0.4 per cent of the total
labour force. The proportion of formal employment
varies considerably between regions and across subsectors. Overall, the three subsectors account for 28 per
cent, 40 per cent and 32 per cent of formal employment
respectively (see figure 3.1). While formal employment
is limited, the number of jobs attributable to forestry is
much larger. Although data varies greatly, studies show
that around half a billion people derive all or part of their
employment and/or livelihoods from forests (table 3.1).
Unpaid subsistence work, primarily fuel-wood harvesting, could occupy between 30 and 50 million people,
90 per cent of whom live in developing countries.
Forests are essential providers of ecosystem services
and drivers of economic growth. They make a major
contribution to climate change mitigation, serving as
carbon storage and sinks, while harbouring the lion’s
share of global biodiversity and providing soil protection and clean water. As a renewable resource, properly
managed forests provide a basis for sustainable livelihoods (ILO, 2001). With US$468 billion of value
added from forest industries and US$75 to 100 billion
from communal lands, forests contribute to only about
1 per cent of global GDP, but this share is much higher
in a number of countries (Elson, 2010; FAO, 2011).
It would increase further if environmental services were
valued properly, as demonstrated by the cases of
Indonesia and the Lao People’s Democratic Republic.2
Forests are important for the livelihoods of over 1 billion
people, especially the rural poor in developing countries,
not only providing goods and services but also functioning as a form of savings (Chambers et al., 1993),
natural insurance (Pattanayak and Sills, 2001;
McSweeney, 2004), a source of gap-filler income in between agriculture harvests and an economic safety net
(Angelsen and Wunder, 2003; Takasaki et al., 2004).
Even though global deforestation rates have fallen
from around 16 million hectares per year during the
Figure 3.1 Formal employment in forestry (FTE) subsectors
(per 1,000 full-time equivalent employees)
Table 3.1
Pulp and Paper
4,374
32%
Forestry
3,876
28%
People dependent on forests for employment,
income and livelihood
Scope
Formal employment in forestry,
wood processing, and pulp and paper
Informal employment in forestry
Indigenous people and forest dwellers
Total
Wood processing
5,459
40%
Source: FAO, 2011.
1
The chapter follows the definition of the forest sector provided in
the 2011 FAO report State of the World’s Forests. However, in national accounts and labour statistics, forestry is a sub-sector of agriculture; wood
processing and pulp and paper are part of manufacturing.
Estimated
number of
people
(million)
13.7 a
30–50 b
410 c
453.7–473.7
See FAO, 2011. The estimation is mainly based on FTEs.
See ILO, 2011b. The estimation is mainly based on FTEs.
c
See World Bank, 2004:16. The figure includes 60 million indigenous people
who primarily depend on natural forests for their livelihood and 350 million
people who obtain additional income from nearby forests. To avoid
overlapping, the number of smallholder farmers who use agroforestry
practices is excluded.
a
b
2
The potential value of forests to Indonesia’s economy is closer to
15–20 per cent (OECD, 2008), while forest goods and services have contributed to three quarters of per capita GDP in Lao People’s Democratic
Republic (Emerton et al., 2002).
Chapter 3: Forestry
1990s to 13 million hectares per year between 2000 and
2010 (FAO, 2010), rapid deforestation and forest degradation, especially the continued loss of primary forests
in many countries, threaten their vital social and environmental functions.
Agricultural expansion in tropical areas has been the
main driver of deforestation over the past two decades
and is likely to continue to be (Geist and Lambin, 2002;
Chomitz et al., 2006), aggravated by unsustainable
timber harvesting for commercial and subsistence needs.
Excessive logging, primarily in Asian countries, and the
extensive consumption of charcoal and fuel-wood in
sub-Saharan African countries are exerting strong pressures on existing forest resources (FAO, 2010). Poverty
and the lack of economic alternatives, identified as underlying causes of deforestation and degradation in the
2008 Green Jobs Report (UNEP et al., 2008), remain
challenges for the future.
Another key employment challenge in the forestry
sector is the low quality of many forestry jobs, characterized by excessive working hours, low wages and
hazardous working conditions. According to MCPFE
Liaison Unit Warsaw et al. (2007: 93), forestry “continues to be one of the most hazardous sectors in terms
of occupational safety and health in most European
countries”. As reported by Gifford (2009), the average
EU fatal accident incidence rate (2000–2005) in
forestry is between 24 and 32 per 100,000 employees,
compared with 3.5 in manufacturing (1994–2001).
Most of these accidents are attributed to lack of protective equipment, improper operations and insufficient
training in operating forestry tools and machines.
This chapter will consider options for maximizing
the sector’s potential benefits and minimizing its
negative externalities for the environment and social
development, through greening forest industries.
A. Technical and policy options
for greening the sector
1. Technical options
Comprehensive measures for greening the forestry
sector and effectively addressing the problems of deforestation and forest degradation involve a combination
of protected area establishment, forest rehabilitation,
reforestation, agroforestry and sustainable forest management (SFM).
Creation of protected areas
The creation of protected areas, restricting access to
forest in order to control excessive logging and forest
degradation, has been the dominant approach used by
governments to secure ecosystem services. Particularly
in the case of species-rich tropical rainforests, active protection is “widely perceived as a crucial ecosystem
management priority and a cost-effective way to reduce
global carbon emissions” (UNEP, 2011: 189). While
forest tourism could be utilized in creating protected
areas, negative interferences which cause biodiversity
loss, such as converting natural forests to tree plantations,
should be avoided. However, the increasing demand for
land and forest products conflicts with attempts to protect existing forests. This dilemma must be addressed by
policy. Many protected areas are inhabited by indigenous
peoples, and provisions for the protection of land rights
and for conflict resolution in the ILO Convention C169
on Indigenous and Tribal Peoples’ Rights Convention
(1989) are particularly relevant in this context.
Reforestation and afforestation
Reforestation and afforestation are effective ways to overcome the perennial problem of over-exploitation of
forests resources due to increased household and industrial energy needs, demand for wood and non-wood
forest products and the need for carbon sequestration.3
The reforested and afforested areas can complement the
environmental and production functions and reinforce
the protection of natural forests. Urban and peri-urban
forestry could also be used as a cost-efficient way to improve the quality of the urban environment.
Nevertheless, the increased competition for land from
agriculture and infrastructure can limit the space for further forestation.
Agroforestry
Agroforestry serves as an integrated solution, reducing
competition for land by combining agriculture with forest
plants. Besides creating a productive and sustainable landuse system, this practice also diversifies biological resources,
increases economic benefits and improves social outcomes.
3
Afforestation activities are carried out on land that has not had forest
cover for more than 50 years under the rules of the Clean Development
Mechanism, while reforestation uses former forestland (which has had
forest cover within the last 50 years) for tree plantations.
39
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Agroforestry encompasses a wide range of practices ranging
“from subsistence livestock silvo-pastoral systems to home
gardens, on-farm timber production, tree crops of all types
integrated with other crops, and biomass plantations
within a wide diversity of biophysical conditions and socioecological characteristics” (Zomer et al., 2009: 1).
Sustainable forest management (SFM)
40
SFM balances forest production and maintenance of the
forest ecosystems. Two key features of SFM are sustainable
harvesting methods and effective regeneration, which deliver socio-economic benefits and environmental services,
such as soil and water protection and carbon mitigation,
while preserving the productive capacity of forests.
Sustainable forest management requires: (i) the application of best practice guidelines for planning and
harvesting, in consultation with local communities; (ii)
research and training in reduced-impact logging; (iii) activities to support forest law enforcement; (iv) industry-led
voluntary initiatives to source legal raw materials; and (v)
the development of chain-of-custody (CoC) and similar
tracking schemes (Pescott and Wilkinson, 2009).
2. Policy instruments being applied
Regulation and law enforcement
Regulation and enforcement through consistent national
law, forest and agriculture policies and international trade
agreements are essential instruments in greening the
forestry sector. In a growing number of countries, including some of the largest and most important in terms
of forest cover, forestry and agriculture policies have been
adopted to reduce deforestation, enhance forest protection
and establish or reinforce reforestation programmes. India
has implemented national forestry policies that aim to increase forest coverage. In 2009, Indonesia established the
world’s first national laws that refer directly to Reduced
Emissions from Deforestation and forest Degradation
(REDD). Bans on unsustainable logging and prosecution
of illegal logging, as used for example in China and Brazil
(see section C), are common regulatory tools. Importantly,
some countries are tackling poverty as the underlying
problem which gives rise to deforestation. International
trade policy represents another vehicle for promoting sustainable forestry by nurturing a robust and fair market,
while sanctioning illegally harvested forest products.
Given that forest stocks in general take time to grow or
recover and that the profit cycle for sustainable forestry
tends to be longer than in conventional forestry, incentives
for enterprises and communities, such as improved market
access through certification schemes and payment for
ecosystem services (PES), are essential. Successful protection and sustainable management of forests also depend
on keeping encroachment by other land-uses, particularly
agriculture, at bay.
Managing the impacts of agriculture on forestry
The expansion of agriculture to satisfy rising demand for
food, animal feed and biofuel materials is likely to continue
to drive deforestation. Meeting these demands will require
further forest clearing, unless agricultural productivity can
increase correspondingly. However, agricultural yields
may, in fact, fall due to climate change impacts, especially
changes in water availability (Rosemberg, 2010). On the
other hand, Chapter 2 has shown that an ecosystem approach to agriculture, as advocated by FAO (2010) and
others, could lead to higher crop yields and reduce the
pressure to convert further forests to agricultural land.
The strong interconnections between agriculture and
forestry suggest that agricultural policies, including subsidies and regulation of unsustainable farming, play an
indispensable role within the forestry sector as well.
Benefits would be maximized if national policies and international agreements on greening the forestry sector gave
full consideration to potential employment and social impacts, and if agriculture policies were well-integrated.
Innovative policies that exploit synergies between the two
sectors were strongly recommended by UNEP (2011).
Certification schemes
Certification schemes provide independent validation of
sustainability and assist consumers to purchase sustainable
forest products, reward forest companies’ commitments
to meeting high social and environmental performance
standards, and thus encourage sustainable forestry practices (Durst et al., 2006). The certification process typically
has four main elements: the development of agreed standards defining sustainable forest management; third-party
auditing of forest operations and issuance of certificates
to companies that meet those standards; auditing to ensure
that products come from certified forests; and the use of
product labels so that certified products can be identified
in the market place (FAO, 2011). As of May 2011, the
Chapter 3: Forestry
global area of certified forest under more than 50 certification programmes was 375 million hectares, mostly
under two large umbrella certification programmes: the
Forest Stewardship Council (FSC), with 148 million
hectares of forest certified, and the Programme for the
Endorsement of Forest Certification (PEFC), with 240
million hectares, with some areas holding both certificates
(FSC, 2011; PEFC, 2011). Standards for employment
and decent work are promoted by most of the certification
schemes, including the PEFC, FSC and the Malaysian
Timber Certification Council, requiring compliance with
national labour laws and international labour standards
concerning freedom of association, collective bargaining,
abolition of forced and child labour and non-discrimination as well as minimum safety and health rules. Some
also recognize the rights of indigenous peoples (FSC,
2011; MTCC, 2011; PEFC, 2011).
Payment for ecosystem services (PES) and
reduced emissions from deforestation and
forest degradation plus positive management
(REDD+) 4
PES provides an effective incentive for sustainable forestry
and improvement of the bio-capacity of intensively managed forests by paying local participants for their provision
of watershed protection, carbon storage, recreation, biodiversity and other ecosystem services (UNEP, 2011;
WBCSD, 2010). Some schemes target the local level, attempting to engage the local poor in providing the services,
such as the schemes developed under the Afforestation
Programme in China. Other schemes are national, such
as in Costa Rica, where farmers are paid to protect biodiverse forests. Funding for such schemes can come from
international sources, including voluntary carbon-offset
schemes. One of the most promising global payment
schemes involving international transfers from industrialized to developing countries is REDD+. The initiative
goes beyond avoiding deforestation and forest degradation
to emphasize the vital role of forest conservation, sustainable management of forests and enhancement of forest
carbon sinks in reducing emissions.
4
REDD+ is similar to REDD, but instead of just covering deforestation and degradation, it includes other activities, such as the sustainable
management of forests and the enhancement of forest carbon stocks.
REDD+ has mainly been discussed in international climate negotiations,
particularly where there is interest in developing new policies to provide
tropical developing countries with financial incentives to reduce deforestation and degradation rates. These incentives are typically financed by more
developed countries.
REDD+ can also become a vehicle for “ensuring a just
transition of the workforce that creates decent work and
quality jobs”, as set out in the “shared vision” under the
UNFCCC Cancun Agreement (UNFCCC, 2011: 4).
Directing investments towards labour-intensive valueadded activities, such as ecosystem restoration, and thus
generating employment for forest communities is one of
the most important strategies for REDD+. Currently,
there are 42 partner developing countries registered in the
UN-REDD Programme, 16 of which are receiving support for their national programme activities. By March
2012, a total of US$67.3 million had been approved by
the Policy Board for National Programmes (UN-REDD,
undated). Financial flows are predicted to reach US$30
billion per year. Norway has pledged US$2.5 billion for
REDD programmes. Large amounts of additional funding
are flowing through voluntary carbon offset programmes,
the World Bank Climate Investment Funds (US$5.7 billion) and the Global Environmental Facility (over US$28
billion) (CFI, undated).
B. Impacts on employment and
incomes
Greening forestry could generate green jobs and improve
livelihoods in many cases, although losses in terms of income and jobs may be unavoidable under some
circumstances. Restrictions on forest use, such as the bans
on logging in several Asian countries, lead to job losses, at
least in the short term. Soil restoration, limiting access to
protected areas and converting cropland to forestland also
affect employment and incomes.
1. Impacts on employment
The number of green jobs can be conservatively assessed
by considering the share of the overall forestry sector that
demonstrably meets appropriate criteria. A good proxy for
this is an independent, third-party certification of sustainable forestry according to environmental and social
indicators (GHK Consulting, 2007; UNEP et al., 2008;
ILO, undated). In other words, the number of hectares
that have been certified as sustainably managed represent
the basis for calculating the number of green jobs. Based
on a global certified area of 320 million hectares in 2008
and on employment data from Lebedys (2008) and PEFC
41
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Table 3.2
Regional distribution of jobs and estimated green jobs in the forest industries
Region
Total jobs
(’000)
Regional
share of total
jobs (%)
Green jobs
(’000)
Regional
share of green
jobs (%)
Green jobs as
a percentage of
total jobs (%)
North America
1,677
12.2
722
33.8
43.1
Europe
3,816
27.8
982
46.0
25.7
Africa
529
3.9
131
6.1
24.8
Oceania
128
0.9
31
1.5
24.2
Latin America and
Caribbean
1,510
11.0
216
10.1
14.3
Asia
6,049
44.1
51
2.4
0.8
13,709
100
2,133
100
15.6
World
Source: Iturriza, forthcoming.
42
Table 3.3
Employment multipliers in forestry broad and core sectors, EU-27 (2000)
Broad and core sector a
Employment multipliers b
Employment (’000 FTEs)
Direct
Indirect
Induced
Total
Type I
Type II
Forestry
405
124
67
595
1.31
1.47
Sustainable Forestry
133
61
30
224
1.46
1.68
The broad sector consists of activities which are dependent on the environment or have a strong impact on it. The core sector is the segment within the broad
sector that improves the environment or manages it sustainably.
b
Type I employment multiplier is the ratio of direct plus indirect to direct employment. Type II employment multiplier is the ratio of direct plus indirect plus
induced to direct employment.
Source: Author’s elaboration based on GHK Consulting, 2007.
a
(2011), it is estimated that 2.13 million green jobs exist,
accounting for 15.6 per cent of total jobs in the forestry
sector globally.5 Geographical variation is very significant
with less than 1 per cent of jobs in Asia qualifying as green
jobs, as opposed to more than 43 in North America (table
3.2).
An earlier assessment for the 27 countries of the
European Union (GHK Consulting, 2007) found green
jobs to make up a 30 per cent share of direct employment.
Interestingly, it also showed that, due to indirect and induced employment effects,6 for every job created in
sustainable forestry, 0.68 jobs are created in other sectors
of the economy. As table 3.3 shows, the employment multipliers are about 10 per cent higher for jobs created in the
sustainable forestry segment than in the industry at large.
5
The calculation applies the standard coefficient that sets one job for
every 150 hectares.
6
Indirect employment effect refers to the suppliers of goods and
services to this type of activity, while the induced employment effect denotes increased household expenditure.
Nair and Rutt (2009) compiled estimates for job creation potential across a range of investments in sustainable
forest management in developing countries, concluding
that an annual investment of US$36 billion would create
and sustain between 10 and 17 million jobs (see table 3.4).
These estimates appear optimistic as the labour inputs assumed seem rather high, while the cost per job and by
extension the wages are rather low. There is little doubt,
however, that the job creation potential from investments
in forestry is substantial.
Impact of creating protected areas
Among the estimates provided by Nair and Rutt (2009),
an annual investment of US$7 billion in forest conservation could create 2 to 3 million FTE new jobs annually
for an initial 5-year period (table 3.4). According to CASS
and IUE (2010), China alone would generate about 1,779
million work-days or over 700,000 FTE jobs in 2010 in
Chapter 3: Forestry
Table 3.4
Potential new jobs in sustainable management of forests and level of investment required
(annual targets for an initial 5-year period)
Activity
Annual
target
area
New jobs
created
New jobs
per
hectare
Approximate
annual
outlay
Cost per
new job
created
(million
hectares)
(million,
FTE)
(FTE/
hectare)
(billion
US$)
(thousand
US$/FTE)
Afforestation, reforestation
and desertification control
5
4–5
0.8–1
8
1.6-2
Improvement of productivity
of existing planted forests
10
0.5–1.0
0.05–0.1
1
1–2
Watershed improvement
1
1–3
1–3
6
2–6
Indigenous forest
management
4
1–2
0.25–0.5
5
2.5–5
Forest conservation
20
2–3
0.1–0.15
7
2.33–3.5
Agroforestry
2
0.5–0.75
0.25–0.375
1
1.33–2
Fire management
10
1.0–1.25
0.1–0.125
5
4–5
Urban and peri-urban
forestry
0.1
0.1–0.5
1–5
2
2–4
20
Skill improvement of forestry
and wood industry workers
0.05
1
Total
10.1–16.5
36
Source: Author’s elaboration on the basis of Nair and Rutt (2009).
newly created reforestation areas. In addition, forest
tourism, mostly based on forest protected areas and national parks, has significant multiplier effects in other
sectors of the economy, such as agriculture, horticulture,
transport and communications. The forest parks in China,
for example, had created 134,000 services and management jobs across the country by 2008 (CASS and IUE,
2010).
Impact of forestation
Reforestation and afforestation activities offer considerable
employment opportunities. Comparing a business-as-usual
(BAU) scenario to 2050 with a green investment alternative, UNEP (2011) estimated that annual deforestation
rates could fall from 14.9 million hectare to 6.7 million
hectare the planted forest area could rise from 347 million
hectare to 850 million hectare, and gross value added in
conventional forest-based industries could increase from
US$0.9 trillion to US$1.4 trillion. This would be accompanied by growth in employment from 25 million to 30
million – a 20 per cent increase. Table 3.4 demonstrates
that, compared to other technical options, forestation and
desertification controls have the highest absolute potential
for generating new jobs and one of the lowest costs of job
creation (US$1,600–2,000 per job annually). In China, a
cumulative additional 4.9 billion days of work (equivalent
to 19.7 million work-years) were generated between 1999
and 2009 solely from plantation activities, in spite of agriculture job losses due to the conversion of cropland to
forests (see table 3.5).7 The Novella Africa Initiative case
in box 3.1 sets a good example of how plantation contributes to forest restoration and employment generation
for indigenous farmers in Central, East and West African
countries. Substantial numbers of jobs are also created from
the development of green spaces in urban areas. In
Bangladesh, urban forestry is considered an important
source of employment, especially tree nursery and gardening (Uddin, 2006).
7
Considering that many forestation jobs are mostly informal and
based on seasonal activities with working hours that are heavily dependent
on temperature, weather and other environmental concerns, the labour
volume for plantation activities should, in fact, create more short-term job
opportunities.
43
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Table 3.5
Plantation activities lead to employment growth in China (1999–2009)
Year
Total
forestation
area
Plantation forestation area
Plantation
forestation
area
Labour
needed for
plantation b
FTE
employment for
plantation c
New
Protected
area
FTE
employment for
protection d
Million
hectares
Million
hectares
Million
work-days
Million
persons
Million
hectares
Thousand
persons
1999
4.90
4.28
427.69
1.71
0.62
2000
5.11
4.35
434.50
1.74
0.76
2001
4.95
3.98
397.73
1.59
0.98
2002
7.77
6.90
689.60
2.76
0.87
2003
9.12
8.43
843.25
3.37
0.69
2004
5.60
5.02
501.89
2.01
0.58
2005
3.64
3.22
322.13
1.29
0.42
2006
3.84
2.45
244.61
0.98
1.12
2.9-6
0.27
2007
3.91
2.74
273.85
1.10
1.05
2.8-5.6
0.12
2008
5.35
3.68
368.43
1.47
1.52
4-8.1
0.15
2009
6.26
4.16
415.63
1.66
1.88
4.9-10.1
0.23
Total
60.45
49.21
4919.31
44
Newly protected area for
plantation purpose a
5.57
Forestation
area by
aerial
seeding
methods
Million
hectare
5.69
The newly protected areas do not take into account those areas already in the scale of protection.
The calculation is based on the average requirement of 100 work-days per hectare for forest plantation, including activities related to site preparation, nursery
and transportation, planting, tending and weeding, referring to Segerström (1976). According to China State Forestry Administration (2010) “Shelterbelt
afforestation project investment estimate indicators”, the labour volume for forest plantation activities is about 71–136 work-days per hectare, which is
approximately the same as Segerström’s estimation.
c
The calculation is based on 250 work-days per year, given that there are 11 public holidays in China.
d
The calculation is based on Yang (2001); one person is needed in forest management or forest protection for every 187–380 hectares of natural forests.
Source: Author’s elaboration on the basis of State Forestry Administration of China, 2010.
a
b
Box 3.1 The plantation of Allanblackia trees in the Novella Africa Initiative
The Novella Africa Initiative is a public-private partnership formed in 2002 by Unilever, the World Agroforestry
Centre (ICRAF), the International Union for the Conservation of Nature (IUCN), and the Netherlands Development
Organization (SNV), which also involves UNDP, and a number of governmental organizations and non-governmental
organizations (NGOs) in Africa. One of the main objectives of the project is reforestation through the planting of
Allanblackia trees – a tall rainforest species in the Clusiaceae family – whose seeds are rich in high-value edible
oil. It is anticipated that the project will provide significant employment opportunities and sustainable benefits to
subsistence farmers in Central, East and West Africa (NAF, undated).
The project contributes to the rehabilitation of unproductive areas, because the trees grow in relatively degraded
lands and improve the soil and the surroundings. Commercial scale collection and extraction of oil from seeds of
the Allanblackia trees provides financial incentives to local farmers. Increased income from seed oil reduces the
frequency of forest clearance, protecting natural flora and fauna. In Ghana and Tanzania, planting of the species
has increased from several thousand to about 100,000 trees per year and has been incorporated into forest
landscape restoration projects (IUCN, 2008). Unilever guarantees the purchase of sustainably produced tree seeds
at a pre-agreed price with specific conditions that farmers must abide by during tree plantation and seed collection.
This not only secures steady levels of payments for farmers, but also promotes sustainable plantation and forest
management. In addition, the function of job creation from the project should not be overlooked. The production
process generated jobs for approximately 4,000 seed collectors in Ghana alone (IUCN, 2008). The number of
farmers involved in the project is expected to grow to 150,000 in Cameroon, Ghana, Liberia, Nigeria and Tanzania
over the next decade, generating returns of US$100 million (UNDP, undated).
Source: Covention on Biological Diversity (CBD), 2009.
Chapter 3: Forestry
Box 3.2 Sustainable agroforestry practice in Nicaragua from Alfred Ritter GmbH & Co. KG
Chocolate producer Alfred Ritter GmbH & Co. KG is a member of the Biodiversity in Good Company Initiative.
Recognizing that the productivity of cocoa plants increases significantly if they are grown in the shade of nutrientrich rainforest trees together with coconut, banana and rubber trees, the company established a programme to
promote the mixed cultivation of cocoa in existing rainforests.
Over a 2–year period, Ritter succeeded in increasing cocoa production in Nicaragua through agroforestry by over
30 per cent. Providing training in ecological cocoa farming and paying well above global market prices (as of 2009
US$3,650 per tonne for organic cocoa and US$3,100 per tonne for regular cocoa), the company stimulated a rise
in the number of certified organic cocoa producers from 350 to 2,000 between 2007 and 2009. The company
also constructs cocoa drying stations and introduces energy-efficient drying methods (tunnel and rack drying), which
save 465 tons of firewood per year, further reducing deforestation and conserving vital habitats in the rainforests.
The agroforestry approach discourages slash-and-burn agriculture and protects the rainforests by increasing the
productivity and quality of organic cocoa and benefitting the indigenous farmers who earn higher incomes.
Source: Biodiversity in Good Company (BIGC), undated.
The net employment gains from afforestation depend largely on what land was previously used for and
how productive the areas were. Reforestation of farming
areas causes job losses, as seen in Chile, since the average
labour requirements per hectare are between three and
ten times lower for forestry than for most types of agriculture. However, increases of forest cover in extensive
grazing or marginal areas where productivity is low are
likely to have positive net effects on employment, for
example in Argentina and Uruguay. Net losses in employment are sometimes driven by reductions in
competitiveness and incomes in agriculture. Jobs in the
forestry sector can be fewer, but more productive, better
paying and more sustainable over time, particularly if
certification encourages good working conditions
(ILO, 2001).
Impact of agroforestry
Agroforestry is one of the most cost-effective technical
options for creating jobs. It was estimated that the average
annual cost of generating a job in agroforestry is
US$1,330–2,000 for an initial 5-year period (see table
3.4). Agroforestry practices, together with certification,
have been proved to be effective in Indonesia in terms
of conserving and protecting forests while maximizing
land use, reducing social conflicts and creating local employment opportunities (Setyawati, 2010). Moreover,
agroforestry can increase productivity and reduce the
negative impact of job loss which result from converting
cropland to forest areas. Combining farming with
forestry activities generates more working hours than reforestation on its own, as first rotation plantations for
agricultural crops require, on average, 16 days more input
beyond tree plantation (ILO, 2001). An example of good
practice is a programme run by the Alfred Ritter com-
pany to promote the mixed cultivation of cocoa in existing rainforests (box 3.2).
Impact of SFM
Compared with conventional forestry, SFM provides
longer term green job opportunities for rural economies
(UNEP, 2011). A study by Nair and Rutt (2009) shows
that an annual input of US$1 million in forest management (including agroforestry) could generate between
500 and 1,000 jobs in many developing countries and from
20 to 100 jobs in most developed and middle-income
countries.
Impact of certification schemes
Because of their requirements for decent working conditions and sustainable management, certification schemes
play an important role in greening forestry employment
– in managing certified forest projects and producing certified wood and other forest products. However, in some
instances the number of jobs can be reduced due to the
limitations imposed on timber production (Cashore et al.,
2006). Analysing a sample of 213 certified forest management units located in the tropical region,8 the study
conducted by Peña-Claros et al. (2009) concluded that
certification schemes had created job opportunities for
local people, improved working conditions, enhanced social cohesion and supported local communities by helping
them to control their indigenous forests. A recent evaluation of community based certification programmes in
Nepal found that they also promote gender equality
(Lewark et al., 2011).
8
The tropical region was defined as the area between the Tropic of
Cancer and the Tropic of Capricorn (23°3’N–23°3’S).
45
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
46
Impact of PES and REDD+
2. Impacts on livelihood and income
PES has positive employment effects. In Costa Rica, a
high proportion of landowners who received PES
funding hired additional workers to carry out conservation- and plantation-related work (Ortiz et al., 2003;
Miranda et al., 2003). Similarly, the Durban Community
Ecosystem Based Adaptation (Durban CEBA, 2011)
initiative in South Africa was able to attract a range of
public and private investments through the purchase of
“CEBA credits” and support indigent community members with both employment and up-skilling. REDD+
has the potential to generate new and decent jobs and
several studies have demonstrated positive outcomes in
existing cooperation projects, including Norway’s contribution to Brazil’s Amazon Fund (see the case study in
section C). While initial results are positive, most of the
projects are in the early stages of implementation and
the REDD+ initiative is still under negotiation. The
scheme’s eventual contribution to job creation is still uncertain and more empirical data is needed to enable
further evaluation.
Livelihood improvement from sustainable
forestry practices
Table 3.6
Sustainable forestry practices have led to multiple benefits,
ranging from general productivity increase and economic
growth, to income generation and poverty alleviation for
local communities. Well-planted forests yield greater returns, as reported by the World Business Council for
Sustainable Development (WBCSD, 2010), and hence
generate more income for forest producers and workers.
Hope and Castilla-Rubio (2008) estimated that a 50 per
cent reduction in deforestation per year from 2010 to 2100
would create a net present value of US$5.3 trillion on average,9 while reducing deforestation by 90 per cent from
2010 would yield benefits of US$10 trillion.10
Governments’ support for certification schemes and
PES has also led to positive changes for small forest owners.
For example, the subsidization of certification costs for
small producers in Brazil has helped to channel their activities into sustainable forestry practices (Consumers
Average earnings of occupations in forestry compared to the minimum wage (MW) of selected countries
Country
Ratio of average
wage/national MW
Forest
supervisor
Forestry
worker
Logger
Tree feller
and bucker
Costa Rica
2.56 a
1.98
1.1
1.3
1.3
Cuba
2.13 b
2.69
1.17
3.42
2.69
Latvia
2.38*
4.64
1.75
1.59
2.97
Romania
3.13*
3.64
3.17
2.24
2.24
Czech Republic
3.03*
1.59
1.59
2.18
2.18
Republic of Korea
2.44–2.63c
3.48
3.48
3.48
3.48
Slovakia
2.70*
1.54
1.54
1.54
1.54
United Kingdom
2.63*
1.54
1.76
1.76
1.76
Developing countries
Developed countries
* The data is “monthly minimum wage as a proportion of average monthly earnings”, author’s estimation based on EUROSTAT, 2010.
a
The average wage figure is based on http://www.ticotimes.net/Business-Real-Estate/Why-is-the-cost-of-living-in-Costa-Rica-so-high-_Friday-February04-2011; the MW figure is based on 107,883 Costa Rican Colones per month for domestic employees in the private sector, from:
http://www.state.gov/j/drl/rls/hrrpt/2008/wha/119154.htm [5 May 2012].
b
The data is based on http://www.state.gov/r/pa/ei/bgn/2886.htm [5 May 2012].
c
The average wage figure is based on 2005 data from: http://www.philembassy-seoul.com/minimum-wage.asp; the MW figure is based on 2010 data from
http://www.worldsalaries.org/korea.shtml [5 May 2012].
Source: Countries selected due to information availability and mainly extracted from LABORSTA October Inquiry Statistics, Table 01: Occupational wages
and hours of work.
9
The result is based on the mean value of the data set with a 90 per
cent confidence interval (CI) of US$0.6 to US$17 trillion.
10
The result is based on the mean value of the data set with a 90 per
cent CI of US$1 trillion to US$30 trillion.
Chapter 3: Forestry
International, 2005). Financial compensation from PES
improves the livelihoods of forest farmers who participated in the scheme. In Costa Rica, adding particularly
disadvantaged districts to priority areas of the programme
has been beneficial for poor landholders in the Osa
Peninsula (Muñoz, 2004). Improved incomes and livelihoods were also found on farms which practise
agroforestry. A study of 200 farms in India showed that
the integration of multiple types of trees led to an increase
on farmers’ annual income from US$56–60 per acre to
US$598–786 per acre (Gangadharappa et al., 2003). In
East Africa, the application of agroforestry to produce
fodder boosted farm income by over 25 per cent among
those who planted 500 trees in average (WAC, 2007).
across countries and depend largely on the type of occupation involved. The data for selected countries in table
3.6 suggests that workers engaged in forestry – and particularly in logging activities – have earnings that are two
to three times the minimum wage, but mostly below average earnings in their respective countries.
C. Good social and labour
practices in greening
the sector
1. Greening of enterprises
Minimum wages
Reference to the minimum wage provides an indicator for
job quality in forestry. Data indicates that wage levels in
forestry are generally low, while jobs in its subsectors of
wood processing and pulp and paper production are generally comparable to wage levels in similar manufacturing
industries (FAO, 2012). The wages and conditions differ
At the workplace level, sustainable practices in forest enterprises require a detailed understanding of ecology,
mastery of reduced-impact logging techniques, the effective application of water, raw material and energy-saving
technologies, effective waste minimization and management, as well as avoidance of emissions.
Box 3.3 The greening of a pulp and paper mill in the United States
The Androscoggin Mill, a large pulp and paper mill owned by International Paper (IP), the world’s largest forest
products company, was transformed from an object of public opprobrium to IP’s best environmental performer. In
the late 1980s, the mill’s environmental violations resulted in a bitter 18-month strike and left its reputation in
tatters.
Early in the 1990s, the mill’s business approach was changed with an initial emphasis on establishing and
maintaining compliance, and later expanded to include aggressive pollution prevention efforts. IP established a
public advisory committee in 1992 to advise management on operational and sustainable wood supply issues,
which later included the application of sustainability criteria (such as the Sustainable Forestry Initiative and ISO
14001) to the company, the mill and the whole supply chain. Through effective dialogue with workers and sufficient
employee motivation, the opacity infractions (an optical measure of particulate emissions) of the mill’s recovery
boiler decreased from 56 incidents a year on average to zero. This successful experience has led to worker–management collaboration to green other workplaces.
The mill’s approach evolved further throughout the 1990s to apply principles of sustainable production. New
measures focused on “closing the loop” by developing new technology to prevent pollution, replacing the most
hazardous chemicals, reducing the generation of solid and hazardous waste and finding beneficial uses for waste
that was previously sent to landfill. The introduction of a computer model of the mill’s waste-fuel incinerator helped
to halve particulate emissions by 2002. The use of safer chemicals and other non-hazardous products had already
reduced hazardous waste generation from 60,000 lb in 1990 to 3,260 lb in 2000. The mill also pursued the establishment of symbiotic relationships with a facility that began using a mill by-product on site and an on-site
natural gas burning facility that supplied part of the mill’s steam demand. Intensive efforts to reuse, recycle, prevent
pollution and recover energy led to a 91 per cent decline in average daily landfill rates from 1988 to 2001. Several
measures contributed to the waste reduction, including recycling wood, metals and paper; compacting non-recyclable
paper into burnable pellets; improving limekiln operations to allow the firing of all lime mud produced; selling
flume grit to a contractor who processed it into landscape material or used it as a farm application; burning bark
and sludge and incorporating the ash into AshCrete, a product developed at the mill; and incorporating green-liquor
dregs into AshCrete.
Source: Hill et al., 2002.
47
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
48
In response to the problems of job quality in the
forestry sector, ILO (2011a: 1) emphasized that “ensuring
adequate protection, training and education of the workforce and facilitating social dialogue among employers,
workers and the government can help realize … the potential for sustainable employment and decent work
conditions within the industry”. It is also noted that,
without clear employment contracts and agreements based
on collective bargaining and other forms of social dialogue,
workers’ rights cannot be adequately protected. It is evident that fostering cooperation and understanding
between employers and workers, not only enables workers
to safeguard their rights, but also benefits employers
through higher productivity and fewer occupational accidents. Close cooperation between workers and
employers within firms has proved to be effective in accelerating the greening of their common workplace (De
Gobbi, 2011) and tripartite cooperation at the national
and local level has worked very well in a number of countries and companies (ILO, 2011a). Box 3.3 details the case
of the Androscoggin Mill in the United States, highlighting not only the significant success of a forest
company in raising energy efficiency and effective waste
management, but also the importance of employee participation in improving the work conditions and
environmental performances of the enterprise.
The following sections discuss the experiences of
China and Brazil, analysing the policies adopted to render
their forestry sectors more sustainable and the efforts necessary to buffer the negative social consequences of
reduced logging and generate positive social impacts
through forest protection measures.
2. China – from unsustainable logging to
afforestation, job creation and poverty
alleviation
Key challenges
Serious drought followed by a devastating flood in China
in the late 1990s triggered national debates and reforms
of environmental policies. Policy-makers and academics
concluded that widespread and excessive cutting of forests
and farming were the root causes. In response to these environmental challenges, the Chinese Government
initiated a massive forestation plan, including the Natural
Forest Protection Programme (NFPP) and the
Afforestation Programme (AP). The NFPP applied to 17
provinces and autonomous regions, banning logging in 73
million hectares of natural forests, equivalent to 69 per
cent of the total natural forest area, while the AP involved
120 million local people in the rural areas across 25
provinces and autonomous regions (State Council, 2002).
The ambitious ban on logging inflicted tremendous
short- and medium-term social economic costs. It was estimated that almost 1 million state forest workers11 lost
their jobs as a result of the ban (Yang, 2001). Moreover,
the majority of China’s poor still live in the environmentally fragile and economically stressed forest regions, where
logging was the dominant economic activity. The logging
ban, together with the transfer of large areas of agricultural
land to forestry, threatened to undermine the livelihoods
of the local farmers and communities in the regions covered by the programmes. The successful implementation
of the ban and of the forestation plan thus depended
largely on how the livelihood and employment issues of
redundant forest workers and local farmers would be
addressed.
General social policies supporting employment
and afforestation plans
To integrate social concerns within the strategic environmental protection initiatives, measures were adopted to
assist redundant state forest workers. According to the
Ministry of Human Resources and Social Security of
China (MOHRSS), design and implementation of the
programme were based on consultations with tripartite
committees at national and local levels, including the forest
worker trade union, with special communication channels
being created for workers and farmers providing a telephone hotline, dedicated websites and microblogs.
Redundant workers, who voluntarily terminated their
employment contracts and resettled themselves, received
a lump sum of up to three times their average annual wages
of previous years. Until the end of 2010, 680,000 redundant workers had received one-off redundancy payments,
and 276,000 were re-employed or retired (figure 3.2). Reemployed or subcontracted workers have been placed in
jobs supporting the afforestation plan, such as forest protection, plantation and management, rural infrastructure
and public facility construction projects. Those who accepted lump-sum payments also received assistance to
establish their own businesses (especially green businesses).
Older workers were offered early retirement while younger
11
State forest workers refer to those employed in forests or timber
industries owned by the state or collective communities.
Chapter 3: Forestry
Figure 3.2 Employment status in 2010 of forest workers laid off after the logging ban in 1998
680,000
64%
100,000
10%
workers still collecting
unemployment benefits
276,000
26%
workers relocated to other
forestry employment
workers in alternative
employment, selfemployment or having
taken early retirment
Source: MOHRSS, 2011.
ones could opt for education and training programmes
through employment service centres and were supported
in finding employment elsewhere. Approximately 0.1 million redundant workers who were unable to find new jobs
received unemployment support to cover minimum living
expenses and medical care (MOHRSS, 2011).
A variety of social measures targeted local farmers
affected by the logging ban:
● farmers were granted full private ownership of the
products grown on their contracted farmland;
● the lease period of farmland was extended to 70 years
or more;12
● tax exemption was granted for non-wood forest
products;
● grain, cash and subsidized tree seedlings were offered
as incentives for afforestation (from 2007, for every
hectare of afforestation local participants are subsidized
annually by a maximum of US$207 in cash plus a
US$39 living allowance);
● training and technical services were offered to improve
participants’ skills in plantation, irrigation, new technologies application and forest management (State
Council, 2002; 2007).
12
According to the Rural Land Contract Law of the People’s Republic
of China 2002, the normal contract period is 30 years for cropland,
30–50 years for grassland and 30–70 years for forestland.
The environmental and social impacts
of the forestation plan (NFPP & AP)
The strategic objective was achieved, contributing not only
to natural forest protection, but also to the reduction of
pressure on fragile ecosystems, the absorption of carbon
dioxide and climate change mitigation (World Bank,
2007). From 1999 to 2010, 10 million hectares of forest
were planted in the 17 provinces where the NFPP was
implemented, a 3.7 per cent increase in forest coverage.
The AP also developed afforested areas of 27.66 million
hectares in the period between 1999 and 2009 (State
Council Information Office, 2010).
Both the NFPP and the AP have extensive environmental and socio-economic co-benefits, including job
creation (Pittock and Xu, 2011). Social development
measures provided a smooth and fair transition for the
initial unemployment problem. The majority of the reemployed redundant workers took forest management
and protection jobs, with some involved in plantation activities. With one person employed in forest management
or protection for every 150 hectares of natural forests
(State Forestry Administration, 2008), an estimated
370,000 jobs were created in managing or protecting 54.78
million hectares of newly planted or protected areas from
1999 to 2009 (State Forestry Administration, 2010). The
reduction of drought and flooding risks and the afforestation activities encouraged most of the enterprises that had
previously relied on logging to shift to greener and more
diverse investments, such as green energy, aquaculture,
breeding industries and tourism. In Henan province, for
example, 39 per cent of the former forest workers were reemployed in forest tourism and related services at the end
49
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
50
of 2010 (State Forestry Administration, 2011). The employment of women in the programme area also increased,
particularly in the non-timber forest product industries
(Cui et al., 2006; Yu et al., 2009). Some studies indicate
that livelihoods of individual households were greatly improved in the programme areas in terms of total income,
off-farm employment growth and the diversification of
income structure (Wang and Wang, 2009; Zhao and
Wang, 2011), especially among workers in the collective
forest areas and those transferred to work outside town
(Mullan et al., 2009). The average annual salary of forest
workers in the NFPP areas within the Yangtze and Yellow
river districts was 15,942 yuan per person in 2008, almost
three times higher than in 1999. This increase is mainly
due to public transfers and employment stimulus packages.
Further, socio-economic resilience has increased by virtue
of higher individual earnings, which also enabled more
families to provide better education for their children
(Pittock and Xu, 2011).
3. Brazil – deforestation reduction along with
agriculture production growth
the Amazon region, 788,915 or 8.7 per cent are directly
involved in forest-based activities, such as logging, creating
forest-based products and fishing (Ferreira Filho and
Fachinello, 2010). At only 5.3 per cent, the share of forestbased activities in regional income is much smaller,
indicating that forest-based activities are relatively labour
intensive but associated with low earnings, as can be observed in figure 3.3. Improvements in incomes through
higher productivity will therefore be important, but can
also be supported by social protection transfers for the
poorest households. Skills levels are low in forestry compared to other sectors. Backward multiplier linkages show
that the development of forest-based activities, in particular timber harvesting, rubber-tapping and fishing, is as
beneficial as promoting alternatives like agriculture.
Critically important for higher employment and income
benefits is the development of higher forward linkages
through further processing and value added in the region.
This is a problem faced by most sectors but which is even
more acute for forest-based products. The question of how
to strike an appropriate balance between environmental
protection and socio-economic development and lessen
tensions between the cattle ranchers, crop-growers and
those involved in forest protection became the subject of
national debates.
Key challenges
Brazil is the country with the world’s largest inventory of
tropical forests (460 million hectares, more than half the
global total) (McKinsey & Company, 2009), the highest
absolute deforestation rate (2.8 million hectares per year
on average from 1990 to 2005) (FAO, 2005), and the
third largest emissions of GHG (IEA, 2011).
Deforestation has accounted for over half of total GHG
emissions in the past 10 years (Bustamante et al., 2009).
Destructive logging and conversion of forestland for cattle
ranching and cropland are among the most important factors underlying the high deforestation rate. Brazil has thus
come under great pressure to green its forestry sector, especially in the Amazon region. The environmental
challenge is further complicated by the negative effects
that restrictions on agriculture and on logging can have
on the employment and income of local communities.
To obtain a better understanding of these interrelationships, the Brazilian Forest Service requested the ILO
to conduct a detailed analysis of economic activity, employment and income derived from forests in the Amazon.
To this end, a disaggregated Social Accounting Matrix was
developed, distinguishing 12 activities within the forest
industries in Brazil and in the Amazon. It shows that, out
of an estimated 6 million people living in rural areas in
Principal policy instruments
The Brazilian government adopted various policy measures in response to the above challenges. The main policy
tools include: the Action Plan for the Prevention and
Control of Deforestation in the Amazon (APPCDA) established in 2004; the Public Forest Management Law
(PFML) implemented in 2006; and the National Climate
Change Plan (PNMC) which took effect in late 2008 and
incorporated, inter alia, increased federal patrols to guard
against illegal logging and ranching.
● PES measures: These generate incentives for SFM
through low-impact commercial wood harvesting and
the use of public lands according to social and ecological needs (APPCDA), while financing local communities dependent on logging for their participation in
sustainable forestry projects (PFML);
● REDD initiatives: As part of REDD+, the Amazon
Fund was set up in 2008 in partnership with Norway,
which pledged to provide a total of US$1 billion by
2015 to compensate Brazil for its commitment to reduce deforestation;
Chapter 3: Forestry
Figure 3.3 Share of employment (chart above) and income (chart below) in sectors and subsectors of Brazil
Trade and Service,
47.90%
Wood industry,
4.50%
Forestry,
6.7%
Siliviculture,
0.10%
Manufacturing,
5.50%
Fisheries,
2.20%
Cattle ranching,
11.80%
Processing Brazil
nut & Açai,
NWP harvesting,
0.50%
0.50%
Agriculture,
26%
Timber harvesting,
1.50%
Timber harvesting, 1.12%
Trade and Service,
64.80%
NWP harvesting, 0.18%
Processing Brazil nut & Açai, 0.11%
Forestry,
5.28%
Wood industry, 3.82%
Agriculture,
10.83%
Manufacturing,
11.09%
Cattle ranching,
Fisheries,6.81%
1.08%
Siliviculture, 0.05%
Source: Ferreira Filho and Fachinello, 2010.
● Promoting good agricultural practices: These include
doubling the number of animals per hectare
(Embrapa, 2010), and providing low-cost loans for
reducing GHG emissions from agriculture and
restoring degraded lands (BNDES, 2010);
● Facilitating just transition: The Green Arc Operation
was initiated in 2008 to facilitate transformation to a
green economy through sustainable agricultural systems and to provide technology transfer and training
for forest workers and owners to facilitate adaptation
to sustainable forestry;
51
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
● Social protection programmes: The national Fome Zero
(Zero Hunger) and Bolsa Família (Family Allowances)
programmes support the greening actions by compensating poor people affected by the policies to reduce deforestation. In 2011, a Bolsa verde (green grant) was
introduced as part of the President’s strategy for poverty
eradication. It provides a monthly payment of R$70
each to about 70,000 poor families in protected public
areas as compensation for environmental services and
there are plans to extend its coverage to 300,000 families to encompass a broader range of measures, such as
clean energy use (Brazilian Government, 2011).
Positive environmental and socio-economic
outcomes
52
The share of protected areas has grown from over 8 per
cent in 1990 to around 44 per cent of the Amazon territory
in 2010 (Celentano et al., undated). The rate of deforestation has fallen to 6,451km2 per year in 2009/10 – a
67 per cent drop compared with the average for 1996–
2010 and the lowest rate in over 20 years. The Union of
Concerned Scientists (2011) estimated that this drop led
to a reduction of nearly 1 billion tonnes of CO2 emissions
in Brazil.
Along with the success in forest conservation and climate change mitigation efforts, Brazil has achieved an
increase in agricultural production and significant reduction of hunger and poverty. During the past decade, the
country has exported large amounts of beef and soybean
despite the world recession (UCS, 2011). Avoided
Deforestation Partners (ADP) (undated) assert that the
gross revenue from soybeans and beef will rise to
US$95.8–104.3 billion, while gradually eradicating deforestation from 2012 to 2030. The estimation from Nepstad
(2009) demonstrated that investment in reducing deforestation in Brazil could generate revenues valued at
US$50–202 billion from 2013 to 2030. Adding to the
agricultural gains mentioned above, the total would reach
US$146–306 billion by 2030. In addition, with financing
from the Amazon Fund, a significant increase in revenues
can be expected for governments, local communities, indigenous peoples, forest owners and agricultural producers
participating in the REDD+.
Concomitantly, Brazil has lifted more than 10 million
of its citizens out of poverty and substantially reduced
rates of hunger and malnutrition through its social protection programmes (Rocha, 2009; Robalino et al., 2010).
Moreover, indigenous people whose territories represent
20 per cent of the Brazilian Amazon could benefit from
sustainable forestry, producing commercial timber and
non-wood forest products. In terms of the job quality of
forest workers, employment requirements of forest
workers recommended by the ILO have been included as
key conditions for awarding forest concessions in public
forests in the Amazon, an initiative likely to trigger significant improvements in job quality for forest workers.
D. Social and labour: Challenges
and issues
Skills
The entire set of measures for greening the forestry sector
and increased government investments in sponsoring sustainable forestry require higher levels of skills and
competencies than do conventional practices. This entails
activities ranging from low-impact logging to carbon accounting and from community engagement to value-chain
development. Entrepreneurial skills training is often necessary in forest-dependent communities to enable local
value addition and enterprise development. The forest industry has traditionally struggled to create and maintain
a skilled workforce with resultant constraints on environmental performance (ILO, 2001). With expanded
legislation, enforcement and investment in sustainable
forest industries, demand for qualified workers will grow
at all levels, aggravating existing bottlenecks. Early assessment of skills gaps and development of appropriate
training is crucial (Strietska-Ilina et al., 2011).
Gender equality
There are some encouraging signs of progress with greater
gender equality in the governance, the use and the distribution of benefits from forest products and services, as a
recent compilation by CIFOR has shown (CIFOR,
2011). Many of the longstanding issues remain, however,
from the male dominance of forestry value-chains to the
lack of land rights for women and low literacy rates among
rural women as impediments to effective participation
(Colfer, 2011). As in other sectors, a greener and more
sustainable forest industry is not automatically more inclusive of women. It will require a range of measures, from
organization and support for informal markets in order
to strengthen women’s economic bargaining power
(Shackleton et al., 2011) to increased representation of
women in consultations on REDD+ (Brown, 2011).
Chapter 3: Forestry
Social dialogue and participation
Sustainable forestry with benefits for workers and local
communities requires joint efforts from all stakeholders
involved in the sector. Poschen (2000: 20) suggested that
“participation of stakeholders can be an effective way to
defuse conflict and to ensure that the cost and benefits
of forest management and utilization are shared in a fair
and equitable manner”. Government agencies and employers’ organizations and trade unions are important
forces in facilitating better communication between employers and workers, improving conditions of work and
driving occupational safety and health management
(ILO, 1998a; 1998b; 2000; 2001).
However, in forestry, workers are difficult to organize
and their voices are rarely heard, which makes it harder
to establish dialogue and reach consensus. A large share
of forest workers are contractors rather than direct employees and sometimes seasonal workers. They are
geographically dispersed and mobile in a variety of temporary and scattered worksites and employers sometimes
resist attempts to unionize. Labour inspectors face the
same problems of access to the workforce as do trade
unions, which greatly hinders effective inspection (ILO,
2000; ILO, 2005). Without a rigorous inspection regime,
forestry workers enjoy little legal protection. To overcome
these challenges, the ILO guidelines call on all forest employers, managers and government agencies to agree that
both permanent and temporary workers and self-employed contractors have the freedom to establish and join
organizations.
A number of ILO Conventions provide a legal and institutional framework conducive to sustainable forest
industries including C169: Indigenous and Tribal Peoples
Convention (1989), which not only provides guidance on
land use by indigenous peoples who are custodians of large
areas of natural forests, but also lays out a consultation and
conflict resolution mechanism that is relevant to sustainable forestry management generally.
E. Conclusions and way forward
Forestry has some of the strongest links to the environment, society and economy, given that the world’s forests
comprise a primary natural resource that is directly affected
by global economic processes and to which a large and
very diverse group of workers and communities is intimately linked. Pressure on forests from other land uses,
particularly agriculture, and high rates of poverty in many
forest-dependent communities are important determinants in the resolution to make forestry and forest
industries greener and sustainable.
With over 2 million jobs (or more than 15 per cent),
a significant proportion of global employment in forestry
is already based on certified sustainable forest management. These are green jobs where workers apply
sustainable resource management and enjoy working conditions in line with international labour standards and
national legislations.
Unsustainable practices have led to massive job losses
in a number of countries, particularly in Asia. This outcome can be avoided where the sector is transformed
through a set of coherent environmental, agricultural and
social policies. A relatively conservative estimate, based on
the lower bound of the coefficients by Nair and Rutt
(2009), suggests increasing investment into sustainable
forestry could create up to 10 million jobs in forest conservation, afforestation, agroforestry and SFM, mostly in
poor rural areas of developing countries with few economic alternatives. Payments for environmental services
can play a critical role in engaging poor communities and
enabling sustainable forestry. While REDD+ is still under
negotiation, pilot projects have already demonstrated their
potential to generate sustainable employment and income
opportunities. Applying the more conservative estimates
as above, the envisaged level of funding of US$30 billion
could generate and sustain in the order of 8 million jobs
in poor regions of developing countries.
Inclusive design of policies and programmes based on
careful assessments of possible winners and losers and consideration of net impacts will be needed. Reclaiming areas
for forestry which have been degraded or are being extensively used for agriculture tends to lead to net gains in
employment, but this is unlikely to be the case where
forests replace intensive, smallholder agriculture. The experiences of Brazil, China and other countries where a
transformation to a forest sector with better and more sustainable jobs and income generation is under way, show
that such a shift to sustainable forestry is possible and beneficial from a development perspective. In both Brazil and
China, there is an emphasis on a just and socially inclusive
transition. China has mastered the challenge of a just transition for almost 1 million forest workers who had lost
their jobs due to unsustainable practices. Both countries
have analysed social impacts and applied a coherent set of
environmental, economic and social policies, including
notable enabling social protection measures in line with
the ILO and UN recommendations for the extension of
social protection floors.
53
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Decent work policies, including standards for working
conditions, skills development, organization and social dialogue and access to social protection and small enterprise
development, have been fundamental for the transition.
They also promote greater economic and political empowerment of women. Social dialogue has been the key
to labour-management cooperation in greening enterprises and workplaces, to resolving conflicts of interest and
to ensuring benefits for local communities. Independent
54
certification of SFM and production along the chain of
custody cannot replace labour inspection but is a complementary tool. Certification has proven to be effective as
a benchmark and influential in promoting good workplace
and community practices. This has resulted in greater
compliance with labour standards, respect for freedom of
association, gender equality and improved working conditions and occupational safety and health for forest
workers.
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Chapter 4
Fisheries
Main findings
61
● Fish is the main source of protein for about a billion
people and provides full- or part-time employment and
income to an estimated 45 million workers. Over 95
per cent of those working in the fishing industry live in
developing countries and often belong to the poorest
groups in society. Declining fish stocks – principally
resulting from overfishing but also attributable to environmental degradation and climate change –
threaten to jeopardize the precarious livelihoods of
these workers.
● Sustainable management practices that respect maximum-catch restrictions, prohibit destructive fishing
methods and allow for stock recovery can reverse the
decline in fish stocks. The case of the cod industry in
the Norwegian Atlantic in the 1990s is a successful example of how practices, such as temporary restrictions
on fishing, have led to a partial recovery of stocks.
● However, measures to redirect the sector onto a more
sustainable path are likely to have adverse effects on employment in the sector and on the communities that
derive their livelihoods from fishing. A comprehensive
strategy that includes income replacement and retraining for workers will be required to tackle this challenge.
There is a corresponding need to stimulate job creation
in other sectors, since many rural communities rely
solely on fishing.
● Programmes to support workers and communities during the transition period will be difficult to implement
in emerging and developing countries, since the fishing
communities in those countries tend to be significantly
larger than in developed economies and many lack the
institutional capacity to deliver a comprehensive suite
of passive and active support measures. An international agreement will therefore be necessary to limit
the impact of the transition on small-scale coastal fishers and to introduce measures to compensate for temporary reductions in catches. These programmes could
be linked to payments for environmental services and
coastal rehabilitation. They should also include measures to increase education and skill levels, diversify employment opportunities and promote small and
medium-sized enterprises (SMEs) in order to raise fishing communities out of poverty.
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Introduction
62
Fish are among the most important renewable resources
on the planet. Apart from being an integral element of
marine and freshwater ecosystems, they are vital to the
survival and health of a significant portion of the world’s
population, providing nutrition and livelihoods for millions of people. Indeed, one in five people depend on fish
as their primary source of protein, with over 95 per cent
of the world’s fishers and fish farmers living in developing
countries. The issue of fisheries management and sustainability is therefore critical (UNEP, 2011).
At present, an estimated 25 per cent of the world’s fish
stocks are over-exploited or depleted, while 52 per cent
of stocks are being fished close to their maximum sustainable limits. Only 23 per cent of commercially exploited
marine stocks are considered to have potential for further
development (OECD, 2008). Underlying these trends is
a rapid rise in consumption: according to the Food and
Agriculture Organization (FAO, 2011) annual per capita
fish consumption has grown from an average of 9.9 kg in
the 1960s to 17 kg in 2007.
The sustainability of the fisheries sector is also threatened by climate change. For instance, in Europe, changes
in sea surface temperature, wind regime, water run-off, icemelt and marine currents have an impact on fish stocks
(Rosemberg, 2010). In small island developing states
(SIDS), the fishery sector will have to face the consequences of sea surface warming, changes in sea level and
tropical cyclones (Huq and Hugé, 2010). Finally, rising
CO2 levels in the atmosphere will increase ocean acidification worldwide, with grave consequences for marine
ecosystems and fish stocks (Stern, 2006).
The increase in demand, coupled with overfishing and
related ecosystem damage, is likely to lead to significantly
reduced incomes or even the collapse of a number of fisheries in the coming decades. This will have severe
consequences for local populations dependent on these
resources for both food and economic development
(OECD, 2008). This is of particular concern in developing countries where the vast majority of fishers are
small-scale operators. As such, declining fish stocks
threaten to aggravate not only their situation but that of
the communities that depend on the wider industry for
their livelihoods.
This process has already begun. In India, for example,
steep declines in the availability of quantity, quality and
variety of fish over the past decade is the single factor most
responsible for the increasing levels of poverty, food insecurity and vulnerability in fishing communities
(Salagrama, 2006). The purpose of this chapter is to ex-
plore options for dealing with the issues affecting the sector
and attempts to reconcile the need to preserve jobs and
improve incomes with the need to protect natural resources and safeguard future fish stocks.
A. Aligning fisheries with
sustainable development
The greening of the fisheries sector depends on the recognition that there is a limit to what the oceans can provide,
and acknowledging that rebuilding overfished and depleted fish populations is essential to maximize sustainable
yield and preserve the livelihoods of current and future
fishing communities. Greening is also instrumental in protecting and preserving essential habitats for marine animals
and ensuring the sector’s activities are conducted in a
manner that minimizes the release of greenhouse gases
(UNEP, 2011).
1. Technical options and potential solutions
There is a fairly limited number of technical options available to policy-makers seeking to reduce the environmental
impact of capture fishing given that much of the problem
revolves around preventing overfishing. One of the crudest
tools is total allowable catch (TAC), a catch limit set for
a particular fishery, typically for a year or a fishing season.
TACs are usually expressed in tonnes of live-weight equivalent, but are sometimes expressed in terms of numbers
of fish. One of the problems posed by TACs is that they
tend to encourage fishers to catch as many fish as they can
in the shortest time possible (OECD, 1997). Similar challenges arise with individual transferable quotas (ITQ) that
apply catch limits to individual businesses or boats.
Policy-makers have also attempted to limit overfishing
by imposing fishing seasons or fishing zones, such as
Marine Protected Areas (MPA), which are intended to
conserve the proscribed resources, and to encourage biomass development in surrounding areas through, for
example, species migration. Here too, results have not always been encouraging with respect to assuring resource
conservation, though they may have been poorer without
such measures (Sutinen, 1999).
The regulation of fishing methods and related gear has
also been used, notably the prohibition of dragnet fishing
and bottom trawling, methods that are notorious for trap-
Chapter 4: Fisheries
ping large amounts of ‘by-catch’ – fish, sea turtles, seabirds
and marine mammals that are unintentionally caught, and
often killed, in fishing operations. Bottom trawling, which
involves attaching heavy weights to the nets and dragging
them over the seabed, also destroys ecosystems, including
centuries-old corals.
Policy-makers also focus on the environmental performance of fishing vessels, and ensure that consumer
prices fully reflect the environmental cost of production.
One obvious way of doing this is to support ecolabelling
and certification (E&C). The principal aim of certification, such as the Marine Stewardship Council (MSC)
certificate, is to encourage the management of fisheries in
a manner that supports sustainability. It is important to
note, however, that (unlike those labels employed in
forestry) marine labels do not include social and labour
dimensions.
Ecolabelling is not equally effective in all markets, however, and the main demand for ecolabelled products is in
Europe and the United States. To date, very few fisheries
in developing countries have adopted certification. This
is due to a number of reasons; first, developing country
fishers (especially in small-scale fragmented fisheries environments) are seldom linked into direct-supply
relationships with large-scale buyers, where the pressure
for certification is strongest. Second, ecolabelling schemes
do not integrate easily into the typical conditions of the
fisheries environment in developing countries, which are
characterized by inadequate fisheries management
regimes, data deficiencies and small-scale multi-species
fisheries. Third, the high costs associated with certification
are often prohibitive for small-scale or resource-poor operators (FAO, 2011).
With regard to aquaculture, policy-makers are on
somewhat firmer ground when targeting their policy efforts and bringing pressure to bear. Typically, they use
regulation to reduce the environmental impacts of aquaculture, notably by developing national aquaculture plans
that regulate the location and operation of aquaculture
farms to provide environmental protection – for example,
minimizing the release of nutrients or antibiotics into the
environment.
2. Other policy considerations
and implications
A key challenge for policy-makers is to implement measures to limit the damage of over-fishing or unsustainable
fishing practices, while being mindful of the impact of
fishing restrictions on the communities that depend on
fish for their livelihoods. In this regard, a comprehensive
and inclusive approach that integrates ecosystem approaches to managing coasts, oceans, fisheries and
aquaculture with social and economic considerations is
necessary.
A key consideration in designing policy is that labour
markets in fisheries present a number of particularities,
being characterized by close-knit social networks where
friendship, kinship and neighbourhood influence both
who is recruited and how much fishers are paid. Also,
while natural conditions, markets and technological developments may determine the aggregate level of
employment in the fisheries, networks and cooperation
are of fundamental importance in determining the success
or failure of a fishing community. Finally, while fishing
has for years been an employer of last resort, it has also
acted as a buffer system, whereby the fishing sector has
lost manpower when other sectors have expanded, but expanded when other sectors contracted (Hersoug, 2006).
These idiosyncrasies of the sector necessarily influence
the way in which labour markets react to interventions in
the fisheries industry. The case of Newfoundland illustrates this point. In 1992, the Canadian Government
established a cod moratorium in response to a catastrophic
fall in the cod population. The embargo ended almost
500 years of fishing activity. In Newfoundland alone, over
35,000 fishers and plant workers from over 400 coastal
communities became unemployed. The federal government intervened, initially providing income assistance
through the Northern Cod Adjustment and Recovery
Program (NCARP) and later through the Atlantic
Groundfish Strategy (TAGS), which included money
specifically designated for the retraining of those workers
displaced by the moratorium with the intention that they
should retrain to start new businesses in other economic
areas. Unfortunately, however, the workers experienced
severe difficulties in engaging in work outside the fisheries.
In 1998, the C$1.9 billion TAGS programme was shut
down. Factors blamed for the failure of the compensation
programmes included tradition, education and the lack of
opportunities in other sectors (Government of
Newfoundland and Labrador, undated). Other interventions have been more successful from a social or an
environmental point of view, and are examined below in
greater detail as examples of good practice.
Another aspect of the fishing sector that presents specific challenges to policy-makers is the fluidity of the
resource they are seeking to exploit. Pursuing international
cooperation to strengthen the management of straddling,
highly migratory and high-seas stocks is a key considera-
63
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
tion and supported by regional fisheries management organizations (RFMOs) in coordinating the management
of regional fisheries. Policy coherence that restrains fleets,
notably in developed counties, and critically reviews subsidies which create overcapacity in the industry are
particularly relevant in helping developing countries to
build sustainable fisheries management.
3. Market trends
Figure 4.1 Global trend in fish consumption per capita by decade
18
17.0
16
Fish consumption (kg/person/year)
64
Total food-fish supply has increased at an annual rate of
3.1 per cent since 1961, outstripping world population
growth, which has run at 1.7 per cent per year over the
same period. The composition of the total fish catch has
changed dramatically over the past few decades with aquaculture growing in relevance: aquaculture accounted for
only 3 per cent of the total catch in 1950, rising to 38 per
cent in 2009. In addition, 89 per cent of all fish farming,
by volume, takes place in Asia (FAO, 2011).
Annual per capita fish consumption grew from an average of 9.9 kg in the 1960s to 11.5 kg in the 1970s, 12.6
kg in the 1980s, 14.4 kg in the 1990s and reached 17.0
kg in 2007 (figure 4.1). Actual consumption varies widely
between regions, with per capita demand highest in
OECD countries and in China, and lower in Africa and
South America. During the financial and economic crisis
that erupted in 2008, per capita consumption remained
relatively flat (FAO, 2011). However, demand for fish is
expected to continue to rise over the coming decades
driven by economic growth and increased awareness of
the benefits of consuming fish (FAO, 2004).
Data on the size of the global fisheries market and its
sustainable component is scarce and estimates often refer
either to marine capture, inland capture or aquaculture.
A joint report by the World Bank and FAO (2009) states
that the global seafood industry (including aquaculture)
is worth US$400 billion a year. The marine capture component accounts for an estimated US$212 billion, of
which 65 per cent, or US$140 billion, is accounted for by
activities post-harvest.
Regarding the segment of the market that can be considered sustainable, Howes (2010) estimates that over 200
fisheries are engaged in an independent assessment process
necessary for certification, at various stages of preparedness. These fisheries land over 7 million tonnes of seafood
annually. On the demand side, labelled products – consisting of more than 4,000 individual product lines – are
now available in more than 60 countries around the world
in a market that is worth approximately US$2 billion annually. Just 5 years ago, there were only 17 fisheries in the
certification programme and fewer than 200 labelled
products in only a handful of countries. The collective
14.4
14
12.6
11.5
12
9.9
10
8
6
4
2
0
1960s
Source: FAO, 2011.
1970s
1980s
1990s
2007
Chapter 4: Fisheries
work of marine conservation organizations, leaders in the
industry and the MSC has helped to put seafood sustainability firmly on the map. Market pull is creating positive
pressure all along the supply-chain, with global implications (Howes, 2010).
However, as noted by the FAO (2011), it is difficult
to estimate the exact volume of ecolabelled certified products on the international market. While the MSC and
Friends of the Sea (FOS) claim to cover, respectively, 7
per cent and 10 per cent of the world’s capture fisheries it
is highly probable that only a small percentage of certified
raw material ends up as a labelled product. The sustainable
sector may well represent less than 1 per cent by value of
the total catch. Even if this is only an approximation, it is
a sobering reminder of just how far there is still to go to
achieve sustainability in our exploitation of the oceans.
B. Impacts of greening on
employment and incomes
in fishing
1. Impacts on employment
Between capture, aquaculture and processing, the fishery
sector provides a livelihood for more than 180 million
people; and that number is increasing. In 2008, just under
45 million people were directly engaged full time or, more
frequently, part time in capture fisheries or in aquaculture
– an increase from 16.7 million in 1980 (FAO, 2011).1
In addition, a number of secondary economic activities –
ranging from boat building to international transport –
are supported by world fisheries (Dyck and Sumaila, 2010;
Pontecorvo et al., 1980).
However, employment in harvest fisheries among almost all OECD countries for which data is available has
declined significantly since the late 1980s. This has often
been a result of overfishing and increased mechanization
as labour is replaced by capital (OECD, 2000). Moreover,
according to the available evidence, the greening of fisheries is likely to have a negative impact on employment
and income, at least in the short term. Yet, for many fisheries, unless fleets are reduced and stocks allowed to
1
Figures for the European Union (EU) indicate that total employment
in the fisheries sector in 2002/03 amounted to around 421,000 people, of
whom 405,000 were active in the coastal regions of the EU and 16,600 in
the inland areas and the French Dom (overseas départements and regions).
Women made up one-third of the total employment figures, mostly employed in the fish processing industry (Salz et al., 2006).
recover, yields will fall progressively and, eventually, fish
stocks will collapse, resulting in far greater socio-economic
harm, including even larger and possibly permanent reductions in employment. Indeed, there are opportunities
for job stability and in some cases, job creation, if a more
sustainable approach to the management of fisheries is
taken.
The extent of employment adjustment depends very
much on the policy approach taken (OECD, 2000). Using
national reports on fishery management prepared by
Australia, Canada, the European Union and 14 of its
Member States,2 Iceland, Japan, Mexico, New Zealand,
Norway, the Republic of Korea, Turkey and the United
States, the OECD examined a number of management
measures and their effects on income. The evidence confirmed that all the management instruments employed
will reduce the level of employment in the short term, but
that the longer-term outcomes will be a function of the
policy adopted. For example, despite the disadvantages of
TAC outlined above, it was the only instrument found to
have an unambiguous positive impact on the level of harvesting employment in the long run. Productivity, however
(defined in the context as the level of catch per unit of effort), is seen to be lower under this modality.
Another modelling exercise, this one undertaken by
UNEP (2011), projects the levels of sectoral output and
employment to 2050 by simulating green investments in
a range of economic sectors, including fisheries. An investment amount (US$119–198 billion per year over the
next 40 years) is allocated to three areas: first, vessel buyback programmes to avoid overcapacity in the fishing fleet;
second, relocation of fisheries employment and, third, fisheries management to support fish-stock regeneration. The
results indicate that the levels of output and employment
are approximately 60 per cent higher by 2050 than the
levels achieved without investment. The simulation also
indicates that these levels would be 50 per cent higher
than under a scenario in which the same investment is
made in business-as-usual (BAU) practices.
There are also notable examples of initiatives designed
to stimulate biomass development, which also have implications for employment. For example, Kolian and
Sammarco (2011) present evidence on the socio-economic impact of the introduction of artificial reef
programmes to two Gulf of Mexico states. The authors
focused on the potential economic impact in these states
if retired oil and gas platforms were utilized for alternative
2
Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
the Netherlands, Poland (entered the European Union in 2004), Portugal,
Spain, Sweden and the United Kingdom.
65
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Table 4.1
Impacts of the introduction of artificial reefs
Area
Annual economic impact
Jobs
South-east Floridaa
US$2.4 billion
26,800
North-west Floridab
US$415 million
8,100
Mississippic
US$78 million
No data
Offshore platformsd
US$324 million
5,560
See Johns et al., 2001.
See Bell et al., 1998.
c
See Southwick et al., 1998.
d
See MMS, 2006.
a
b
66
energy sources or for marine aquaculture. The study found
that a new sustainable fisheries industry established on
this basis could directly employ between 18,000 and
27,000 fishers on the Gulf Coast. Similarly encouraging
results have been produced by studies conducted in Florida
and Mississippi on the socio-economic impact of the introduction of artificial reefs (table 4.1).
The prospects for green job creation are broadened
when the impact of adopting more sustainable fishing
practices is linked to the management of coastal areas. In
Yakushima (Japan), for example, the fishers’ plantation
movement was triggered by fishers’ recent comprehension
of the importance of broadleaf trees, with additional support from the scientific community. Local fishers knew
that the forest provided nutrients and valuable shade to
fisheries and that trees controlled the outflow of rainwater
and soil (Tomohiro and Sato, 2009). Mangrove replanting
projects and the construction of artificial reefs have also
helped some fish stocks to rebound quickly (Platt
McGinn, 1998). More generally, the impact of structural
adjustment on labour will depend on the particular situation of each fishery, including the socio-economic
characteristics of fishers, as well as approach taken and the
community’s ability to offer complementary or alternative
sources of employment and income.
2. Impacts on income
As in the agricultural sector, incomes in the fishing sector
have traditionally been very low. FAO (2005) estimated
the number of poor small-scale fishers and related employees in marine and inland capture fisheries earning
less than US$1 a day at 5.8 million, representing 20 per
cent of the world’s fishers. There may be as many as 17.3
million income-poor people in related upstream and
downstream activities, such as boat building, marketing
and processing. These figures suggest an overall estimate
of 23 million income-poor people, plus their dependants,
who rely on small-scale fisheries for their livelihoods.
This finding is in line with an earlier FAO survey of
Malaysia, where 90 per cent of 2,300 respondents reported receiving an average income below the poverty
line, and 76.48 per cent reported having no additional
source of income (Hotta and Wang, 1985). Moreover,
fishing communities are frequently characterized by
overcrowded and sub-standard living conditions, low
levels of education and a lack of access to services (such
as schools and health care) and infrastructure (such as
roads or markets). Tenure is an additional problem as
many fishers have no rights to the property on which
they live (FAO, 2007).
The issue of poverty among fishers and their communities is a matter of concern in itself, but may worsen
in the context of greening the sector if the right policy
mix is not put in place. The challenge is exacerbated by
the fact that resources in these communities are often
limited, making it difficult to implement adaptation
strategies (Rosemberg, 2010). Indeed, the management
of local fish stocks in many of these areas will not improve
until more is done to combat poverty (FAO, 2007).
In some instances, the reverse is also true, i.e. improved management of fish stocks can improve
outcomes. For example, a compilation of the experiences
of fisheries that have been certified by the MSC reveals
that the label has helped to retain existing markets and
gain access to new ones, while some fishers reported obtaining price premiums (MSC, 2009). The main
beneficiaries appear to be smaller-scale, artisanal fisheries
– many of which have survived and prospered as a result
of more favourable prices. Similar experiences were reported in South Australia, where MSC-certified seafood
regularly commands premiums of 30 to 50 per cent over
non-certified seafood sold to restaurants in Sydney and
Melbourne (MSC, 2009).
However, as already noted, not all fisheries can access
certification. The costs and benefits of ecolabelling and
certification accrue differently to different stakeholders.
Retailers are the main drivers of ecolabelling and reap
the greatest rewards in terms of value added to their
brand and reputation, risk management, ease of procurement and potential price premiums at relatively little or
no cost to them for chain of custody certification or licence fees. By contrast, fishers assume the main cost
burden. The actual costs of certification, including experts’ fees, can range from a few thousand US dollars to
up to US$250,000 depending on the size and complexity
of the fishery and on the scheme chosen (FAO, 2011).
Chapter 4: Fisheries
Helping small-scale fisheries to certify their production
is therefore of the utmost importance. Granting such fisheries clear legal access to fishing grounds and giving them
greater responsibility for managing local fisheries would
be directly beneficial in dealing with the problems of poor
management and stock degradation. This measure would
have to be complemented by training efforts aimed at
building their capacity to manage their own businesses
(FAO, 2007).
3. Greening of enterprises
One obvious way to empower fishers is to encourage them
to form cooperatives. Successfully managed fishery cooperatives have great potential to cope with the crisis that is
threatening the industry (Ünal, 2006). According to
Baticados et al. (1998), fishery cooperatives can co-manage
coastal fishery resources, help to improve the living conditions of small-scale fishers and slow down the rapid
depletion of these resources.
Good practices in fisheries management address both
human and ecological well-being, protecting and conserving ecosystems on the one hand and providing food
and livelihoods for humans by managing fisheries activities
on the other. To be effective stakeholders must adopt a
holistic approach to the problem of sustainability, integrating cross-sectoral initiatives as far as possible. There
are many examples of national initiatives that have succeeded in this, one being Norway’s response to the cod
crisis of 1989–90 (box 4.1).
Namibia also intervened to address overfishing, which
had been prevalent for decades prior to independence. In
1990 the newly elected government moved quickly to establish a fisheries administration and implemented a
resource-management system that incorporated a highly
efficient and cost-effective system of monitoring, control
and surveillance. Among other elements, the system is centred on the implementation of fishing rights and the
setting of TACs for each of the major species, distributed
in the form of individual quotas. To fish commercially
within Namibia’s 200-mile exclusive economic zone
(EEZ), all vessels are required to obtain a licence. By-catch
fees are used to discourage the capture of non-target
species. A Marine Resources Fund levy is imposed per
tonne of landed catch to finance fisheries research and
training initiatives.
An integrated programme of inspection and patrols at
sea, on land and in the air ensures continuing compliance
with Namibia’s fisheries laws. Likewise, regional and international cooperation in fisheries management is
enhanced through a number of mechanisms. The
Namibian fishing industry is not subsidized. Instead,
Namibia’s rights-based system and associated quota fees
have led to healthier stocks, improved compliance and an
efficient industry that supports responsible fisheries management and generates healthy profits (Nichols, 2003).
In response to a crisis caused by an outbreak of the
Infectious Salmon Anaemia (ISA) virus, Chile took concrete action to reform its fisheries (aquaculture in this
case). At its peak, the industry employed more than 50,000
workers, half of whom lost their jobs when the virus struck
(Murias, 2010). In response, the Government modified
Box 4.1 Norway’s response to overfishing
As a result of the cod crisis of 1989–90, drastic cuts were made in the TAC and open access fishing came to an
end, effectively closing down all the major fisheries by 2005. As a result, employment fell, driving fishers to find
employment elsewhere. Several remedies were offered, including debt relief. The Fishers’ Guarantee Fund was established to provide temporary payments to fishers for loss of income, which dealt with the immediate effects of
restructuring the fishing fleet. Norway also provided the fishers with the resources to enter other areas of the labour
markets, focusing on education and training. Significantly, there has also been a concerted effort to expand the
business sector, notably by investing in the aquaculture industry and fish processing market, so that retrained
fishers have new employment opportunities. So, while the short-term effects of the suspension of cod fishing were
managed through various employment policies, longer term challenges were met by rural and regional policies emphasizing education and training. Norway was thus able to manage the resource crisis successfully, while stabilizing
unemployment and migration rates.
In fact, total catch sizes recovered quickly in the 1990s, while overall employment in the sector continued to
gradually decline – to around 15,000, from a high of 115,000 in 1946. These two trends combined to raise the
amount of catch per fisher to record levels. Ultimately, a total disruption and collapse of the fishery was avoided,
and the gradual adjustment that was required of the labour market was manageable.
Source: Hersoug, 2006.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Box 4.2 Greening of the fishing value chain by a large retailer: Walmart’s sustainable seafood initiative
Walmart’s sustainable seafood initiative was launched in 2006, when the company announced that it would purchase
all of its wild-caught fish for the United States market from sustainable sources by the end of 2011. As noted
above, the shift towards sustainable seafood has been driven by growing consumer awareness of harmful practices
in the seafood industry, such as overfishing and by-catch. In order to identify sustainable fisheries, Walmart formed
a partnership with the Marine Stewardship Council (MSC), a non-profit organization that assesses and certifies sustainable fisheries around the world. Fisheries are awarded the MSC blue eco-label if they are judged to be operating
in an environmentally responsible way without contributing to overfishing.
In 2004, the South African hake fishery received MSC certification, the first fishery in Africa to do so. The fishery’s
MSC certification was renewed in 2010 following a 5-yearly reassessment. Hake is South Africa’s most valuable
segment of the sector, contributing approximately half the value of the country’s fish production. South Africa’s
fishing industry (both commercial and recreational) is valued at R4–5 billion annually and provides employment
for almost 30,000 individuals.
Source: Benkenstein, 2011.
68
the Law of Fisheries and Aquaculture (LPGA), bringing
in tighter regulation (aquaculture concession pools must
now have installed technology to monitor environmental
parameters) and ruling that sanitary certificates must be
presented to customs for imported ova and gametes (it is
believed that the ISA virus was transmitted through imported ova). In addition, new regulations that make
aquaculture concession holders liable for unfair or antiunion practices were introduced to improve working
conditions. Due to the exposure to a harsh climate and
cold water on poorly secured floating rafts, occupational
accidents and diseases in the salmon industry are quite
prevalent.
At the firm level, there are also examples of good practices. For example, in 2006 Walmart launched the
sustainable seafood initiative wherein the company decided that by the end of 2011, all of the wild-caught fish
for the United States market would come from sustainable
sources (see box 4.2).
C. Issues and challenges
1. Comprehensive approach
Adjustment and restructuring policies designed to help
fisheries deal with overcapacity have sometimes been criticized for failing to actively address the ancillary effects of
such policies on economic activity beyond fishing (Willing,
2007). The need to retrain workers to take on new employment in alternative sectors must be a key aspect of
fisheries adjustment since only realistic and credible em-
ployment prospects will persuade fishers and their representatives to abandon livelihoods that have sustained their
families for generations. It is therefore essential that all
stakeholders have an opportunity to express their views
and to be fully informed of the exact nature and implications of any new policies or programmes. As part of the
process, employment impact assessments can be carried out
to analyse the dynamic interdependent linkages between
the different sectors of the economy and used to explore
the relationship between intensive employment strategies,
job creation and poverty reduction (ILO, 2011a).
To ensure that the voices of stakeholders (in particular
employers and workers as social partners in the industry)
are heard, it is important to strengthen fishers’ and fishing
vessel owners’ organizations. Furthermore, training on issues related to greening the sector and transitioning to other
forms of work should be provided in order to encourage
sustainable local economic development and create new,
decent jobs to replace those lost in the fishing sector.
In the United States, the National Marine Fisheries
Service has overseen several financial assistance programmes for fishers who have suffered financial losses as
a result of regulations that were designed to create sustainable fisheries. Some programmes help fishers to move from
fish harvesting to aquaculture or fish farming. In addition
to those types of assistance, different organizations have
offered alternative career programmes for fishers who feel
that the sustainable fisheries industry no longer offers them
a secure livelihood. The experience of Newfoundland
shows that, despite the massive compensation programme
that was implemented in 1992, the absence of alternatives
made it difficult for workers to transition to other professions and, as a result, unemployment remained high. In
many fishing communities, a successful transition will re-
Chapter 4: Fisheries
quire higher level commitment to local economic development and diversification (NLH, 2011).
2. Skills upgrading and retraining
In some instances, workers can be retrained for jobs within
the sector. For example, a case study of Bangladesh, Costa
Rica and Mali indicated a process of restructuring within
the sector and a shift in employment towards processing
and services (Strietska-Ilina et al., 2011). In this context,
emphasis can be placed on skills upgrading of fishers and
retraining of agricultural workers in sustainable fish and
seafood farming and aquaculture, as well as retraining for
jobs in marine natural parks.
In other cases, workers will have to be retrained for
jobs in new sectors (see Chapter 10). Yet, active labour
market measures in developing countries — where the
bulk of the challenge will arise — are still limited and face
considerable funding constraints and weak labour market
institutions such as public employment services. The relationship between fisheries and other sectors of the
economy will also create the need for additional skills.
3. Job quality
Working conditions in the sector are generally poor and
fatality statistics in the fishing industry reveal it to be one
of the most dangerous professions (ILO, 2000). An international legal framework has been put in place to improve
conditions in the industry, but to date has not had sufficient
uptake to determine its effectiveness. The ILO Work in
Fishing Convention, 2007 (No. 188) revises and updates
the contents of five previous international agreements for
the sector. It prescribes minimum requirements for work
on a fishing vessel, including the conditions of service, accommodation and food, occupational safety, medical care,
health protection and social security. As of March 2012,
just two states (Argentina and Bosnia and Herzegovina)
have ratified; the Convention will come into force 12
months after the date on which the ratifications of ten
Member States have been deposited (of which eight need
to be coastal states). Social partner agreements and capacitybuilding activities are critical components of increasing the
number of ratifications. The ILO is planning a set of activities in 2011–16 to facilitate the process (ILO, 2012).
Fishing communities are frequently characterized by
overcrowding and sub-standard living conditions. Poverty
and vulnerability in fishing communities expose them to
a number of other problems. FAO studies show, for example, that rates of HIV infection in fishing communities
in many developing countries in Africa, Asia and Central
America can be 5 to 14 times higher than those in the general population (FAO, 2007). Cooperatives have an
important role to play in addressing social protection issues, but governments can also help. While most fishers
work in the informal sector, policy-makers must find ways
to extend to them some of the social protection afforded
to formal sector workers. Such initiatives can increase the
Box 4.3 Social protection and management of fish stocks in Brazil
The case of Brazil provides an example of how initiatives to extend social protection to the informal sector can
work. In Brazil, fishers are entitled to unemployment insurance for the so-called closing period, during which fishing
activity is prohibited to aid the preservation of marine, river or lake species. The length of the period, during which
fish species undertake their natural cycles of reproduction, is defined by the Brazilian Institute of Environment
and Renewable Natural Resources (IBAMA) and varies according to regions.
To be eligible for unemployment compensation, workers must demonstrate proof of registration as fishers at the
National Institute of Social Security (INSS) and pay the accompanying contributions. Similarly, they must prove
that they have no source of income other than that derived from fishing. The amount paid to fishers is equivalent
to a monthly minimum wage. Between 2003 and 2011 the Federal Government of Brazil paid unemployment insurance of R$3.7 billion to fishers affected by the embargo period. In 2010, the corresponding amount was
R$934.2 million, paid to 437,400 fishers, and it was predicted that in 2011 payments would reach R$1.3 billion.
Some aspects of the programme have been criticized. For instance, observers noted that the existence of the
insurance may attract new workers to the activity, which would increase fishing and run counter to the initial conservation intention of the programme.
The Brazilian experience may suggest that a certain degree of moral hazard is unavoidable when an insurance programme is implemented on such a massive scale; it also suggests, however, that social protection is an effective
policy for alleviating poverty among the vulnerable.
Source: Brazilian Presidency Website, undated; IBAMA, undated.
69
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
70
income of workers, while also providing them with the
benefit of compensation in the case of unemployment
during periods of fish stock regeneration, as shown in the
example of Brazil (box 4.3).
Ratification and implementation of Convention No.
188 require active dialogue and involvement of the social
partners as well as innovative solutions for formalization
and access to social protection, like the example of Brazil.
This is pursued through the ILO Project for Sound and
Sustainable Development of Fisheries Sector, initiated in
2008, which has promoted social dialogue between employers, workers and government representatives. It has
supported the improvement of social and working conditions in four African countries (Guinea-Bissau,
Mauritania, Morocco and Senegal) and two Latin
American countries (Ecuador and Peru) (ILO, 2011b).
The fishing sector of Ecuador and Peru, for instance, has
long been marked by a lack of both tripartite dialogue and
decent working conditions. However, in recent years Peru
has made significant advances in the field of social dialogue
(Alvaredo Pereda, 2009).
D. Conclusions and way forward
Continued depletion of fish stocks through unsustainable
practices and environmental degradation will impose significant economic and social costs on the sector. To place
the sector on a sustainable path, policies are needed to
promote the recovery of stocks, potentially through temporary reductions in fishing capacity and other measures.
However, this is likely to lead to lower employment levels
in the short term, so any successful strategy to promote
more sustainable fishing practices must also include policies to address the social impact on fishers and their
communities.
For those currently fishing, the reduction of capacity
implies a need for both income support in the short term
and retraining to improve long-term prospects. Efforts to
place workers within the fish-related value chain will enable both workers and companies to remain within their
communities. This was successfully achieved in Norway
and the United States. In isolation, such measures may be
insufficient, however, since there is also a need to create
alternative employment opportunities. Providing opportunities for fishers to transition to other forms of work
will therefore require a broader strategy, including efforts
to promote economic diversification at the local level.
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73
Chapter 5
Energy
Main findings
● The energy sector is a relatively small employer, but its
effect on the economy in terms of employment and
income generation, as well as in terms of greenhouse
gas (GHG) emissions and pollution, is disproportionately large. A rapid shift to low-carbon energy supply
derived from renewable sources, in addition to major
gains in energy efficiency, is critical to avoid unmanageable climate change. Such a shift will also have important net positive effects on employment and help
to address energy poverty in rural communities.
● The renewable energy sector continues to grow rapidly. Both direct and indirect employment worldwide
have expanded significantly from an estimated 2.3 million jobs in 2007–08 to almost 5 million jobs in
2009–11. At the global level there are data gaps, but
it is estimated that, of the 5 million jobs in the sector,
there are over 1.5 million in biofuels, 900,000 in solar
hot water, 820,000 in solar photovoltaic (PV), up to
an estimated 750,000 in biomass power and heat,
670,000 in wind power, 230,000 in biogas and 40,000
in solar thermal power.
● The growth of the renewable energy industry has in
fact supplemented jobs in the fossil fuel sector, rather
than replaced them. Job losses in the fossil fuel industry have primarily been due to rising mechanization
and labour productivity. A continued shift to renewable energy is likely to lead to a net increase in employment. Moreover, evidence suggests that jobs in the
renewable energy industry are of equivalent or better
quality than those in the fossil fuel industry.
● As employment in fossil fuels continues to decline in
importance, the coal-mining industry is of particular
concern. It is often the dominant employer in small
communities, and has important linkages and interdependencies with other sectors in the community.
Previous experiences show that a comprehensive policy approach is required to support workers, enterprises, communities and regions affected by this shift.
This should include temporary income support, opportunities for skill upgrading as well as efforts to diversify the local economy. Workers’ mobility should
also be facilitated in order to cushion the impact of job
losses, to generate alternative opportunities and to
stimulate economic diversification.
● As Chapter 1 illustrated, some 1.3 billion people in
the poorest countries (mostly rural) are still without
any source of modern and clean energy. Renewable energy therefore has the potential to make a major contribution to overcoming the lack of energy access. It
could also have ancillary effects by creating employment and income opportunities in the production and
use of energy. The experience at Solar Home Systems
(SHS) in Bangladesh – where, to date, 1.2 million
poor households have been equipped with photovoltaic panels and more than 60,000 jobs have been
created (particularly among youth) and thousands of
workers have received training (notably women) –
demonstrates that significant poverty reduction, employment creation, health and educational benefits
can be generated by shifting to renewable
energy sources.
75
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Introduction
76
The energy sector is a relatively small employer, but its effects on the economy as a whole are disproportionately
large, since no modern industry or service activity can
function without energy. At present, global energy consumption is dominated by carbon-intensive fossil fuels,
with oil accounting for 33.6 per cent of commercial primary energy use, coal 29.6 per cent and natural gas, 23.8
per cent. For all its headline-grabbing power, nuclear energy accounts for only 5.2 per cent, while hydroelectricity
and other renewables make up the remainder (BP, 2011).
In rural areas of developing countries, traditional biomass – namely firewood, charcoal, manure and crop
residues – still plays an important role (an estimated 2.7
to 3 billion people depend on biomass for cooking and
heating). But the use of biomass leads to several severe
health and environmental problems, including indoor air
pollution, deforestation, soil erosion and black carbon
emissions. In fact, indoor air pollution from burning biomass, coal and kerosene is responsible for at least 1.5
million, and perhaps as many as 2 million, premature
deaths each year (IEA, 2011; UNDP and WHO, 2009).
The energy sector as a whole faces a number of challenges, but they can be broken down into two core issues:
the inadequacy and insecurity of supply on the one hand,
and environmental unsustainability on the other. The impact of fossil fuel extraction and consumption on the
environment is well-documented, particularly with regard
to GHG emissions, and so is the extraction of shale gas
through hydraulic fracturing (fracking). Supply concerns
have focused in particular on the flow of oil, given both
the political instability in major producing countries and
increasing apprehension about the eventual depletion of
accessible sources. This chapter first discusses briefly the
existing options for greening the energy sector and the appropriate policy instruments. It then offers an overview
of the trends in renewable energy markets. The main part
of this chapter discusses the employment impacts of investment in renewable energies. Current job estimates and
Table 5.1
projections from available studies are presented for wind
power, solar energy and bioenergy. Following that, job
losses in fossil fuel industries are discussed, and the chapter
concludes with observations on skill-building issues.
A. Energy: Greening of the sector
1. The options
There are two ways to make the production of energy
greener, both of which have profound implications for
employment. The first is to make a more efficient use of
energy, which is addressed in a number of other chapters
(e.g. Chapter 7 and Chapter 8). The second is to replace
fossil fuels with renewable energy sources such as wind,
solar and bioenergy. In the latter category, biofuel development has triggered concerns about food-versus-fuel
tradeoffs. Gains in bioenergy jobs could be offset by the
loss of jobs in agriculture, if energy feedstock is derived
from land previously devoted to food production.
Geothermal energy and hydropower also offer interesting possibilities. However so far, geothermal energy has
attracted comparatively little investment; only small-scale
hydropower projects are regarded as sustainable, since large
dams impose a range of negative impacts on the environment. Some analysts have proposed nuclear energy as a
low GHG-emission alternative to fossil fuels, but recent
events in Japan provided a powerful reminder of unsolved
problems, including the safety of operations and long-term
storage of nuclear waste.
2. Policy instruments
Renewable energy has seen a major expansion in the past
two decades, with at least 119 countries or sub-national
Worldwide policies in support of renewable energy, 2005 and 2010
Countries, federal states or provinces adopting:
2005
2010
Policy targets
52
98
Feed-in policies
41
87
Renewable portfolio standards
38
63
Biofuels mandates
38
60
Note: Includes policy tools implemented at the national and sub-national level.
Sources: REN21, 2011; REN21, 2007.
Chapter 5: Energy
authorities setting renewables targets or putting in place
support measures (REN21, 2011). A range of policy instruments has been implemented. For instance, renewable
energy targets exist in at least 98 countries (table 5.1), usually expressed as a share of total energy supply/use to be
attained by a target date. So-called feed-in tariffs (FIT),
under which eligible renewable electricity generators are
guaranteed a cost-based payment for the electricity they
produce, have been adopted in a total of 87 jurisdictions
(61 countries and 26 states or provinces) worldwide
(REN21, 2011).
Meanwhile, renewable portfolio standards – regulations obliging power companies to produce a specified
fraction of their output from renewable energy sources
– have been imposed in 63 countries (in ten at the national level and in more than 50 by sub-national
jurisdictions). Additional policy tools include public financing and investment subsidies, grants or rebates, tax
incentives and payments or credits for renewable energy
production. Net metering, whereby the owners of a renewable energy source (typically householders using
solar panels) receive credits for at least a portion of the
electricity they generate, is also used, as are green energy
purchasing and labelling programmes (REN21, 2011).
3. Market trends
Renewable energy is growing fast. For instance, between
2005 and 2010, worldwide solar PV capacity grew by an
annual average of 49 per cent. Wind power and concentrating solar power (CSP) – systems using mirrors or
lenses to concentrate sunlight – each grew by 27 per cent,
while solar hot water (SHW) has grown by 16 per cent.
In addition, bioethanol production expanded by 23 per
cent and biodiesel by 38 per cent (REN21, 2011).
This increase in capacity has been driven by rising
investment, which surged from just US$7 billion in 1995
to US$260 billion in 2011 (BNEF, 2012a; REN21,
2005). Investment has been supported by the various
economic stimulus packages implemented in the wake
of the 2008-09 global financial and economic crisis,
which poured US$188 billion into renewable energy and
energy efficiency (UNEP, 2011).
In the electricity sector, renewables accounted for approximately half of all new capacity added globally during
2010, one-quarter of total generating capacity and close
to one-fifth of electricity supply (REN21, 2011).
Renewable energy is becoming increasingly cost-competitive with conventional sources. This development
has been particularly pronounced in the solar PV sector,
where modules prices fell by 38 per cent in 2009 and
again by 14 per cent in 2010 (REN21, 2011). In the
United States, there are indications of a further cost decline for residential and commercial PV systems of 11
per cent in the first half of 2011 (Tucker, 2011).
Meanwhile, the cost of wind electricity has reached a
record low. Bloomberg Energy Finance also reported in
early 2011 that several wind projects now have lower per
megawatt-hour costs than either coal or natural gas-fired
power plants (BNEF, 2011). Overcapacity has played a
role in recent turbine price falls, a development that may
make it harder for small producers to compete and survive (Doom, 2012).
At the country level, China has transformed itself
into a leading wind and solar manufacturing power. This
was achieved thanks to substantial and sustained investments, FITs and a range of other policy tools, including
low-interest credits from state banks, cheap land for manufacturing facilities and a requirement that a share of
production be derived from locally-manufactured inputs
(Bradsher, 2010).
Other than China, the leading countries in terms of
total renewable energy production capacity are Brazil,
Germany, India, Spain and the United States (REN21,
2011). These countries are also among the leaders in
manufacturing wind turbines, solar cells and other renewable energy equipment.
B. Impacts of greening on
employment and incomes
in the energy sector
1. Employment factors
One method of assessing the employment potential of
renewable energy is to measure or express employment
in terms of jobs created per unit of produced or installed
capacity. With this in mind, figure 5.1 presents data in
job-years per gigawatt hour (GWh) for a range of renewable and other energy sources, on the basis of a broad
review of available studies. In particular, the figure shows
that the job-years are highest among solar PV, landfill
gas, small hydro and geothermal. As the renewable energy sector matures, it is expected that labour
productivity will rise further, resulting in less employment per unit of capacity.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Figure 5.1 Comparison of job-years across technologies (job-years/GWh)
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Source: Wei et al., 2010.
78
It is important to note that global averages hide substantial differences between countries. In the wind
industry, a 2010 study estimated the global average of manufacturing and installation jobs per megawatt (MW)
capacity at 14, and the number of operations and maintenance jobs at 0.33 per MW (GWEC and Greenpeace,
2010). A 2009 report by the European Wind Industry
Association (EWEA) offers a breakdown of jobs per MW
figures by industrial activity (see table 5.2). The breakdown shows how important manufacturing jobs are to the
wind industry, representing 12.5 jobs per MW, or more
than 80 per cent of all wind energy jobs. Installations, operations and maintenance and other aspects contribute to
a much smaller share. However, as total installed capacity
Table 5.2
Wind energy jobs per unit of capacity, Europe, 2009
New
additions
Cumulative
capacity
(jobs per MW)
Wind turbine manufacturing
– direct
7.5
–
Wind turbine manufacturing
– indirect
5.0
–
Installation
1.2
–
Operations and maintenance
–
0.33
Other direct employment1
1.3
0.07
15.1
0.40
Total employment
Utilities, consultants, research, financial services and others.
Source: EWEA, 2009.
1
expands, operating wind farms will become an increasingly
important source of employment, especially in countries
that do not themselves manufacture wind turbines and related equipment.
With respect to the wind industry in emerging countries, where labour productivity is generally lower, in China
for instance the number of jobs was estimated at 30–35
jobs per MW in manufacturing and installation and 1.5–
2 jobs per MW in operations and maintenance (IUE and
CASS, 2010). In India, the numbers were estimated at
37.5 jobs in manufacturing and installation and a surprisingly high 5 jobs in operations and maintenance (GCN,
2010).
For bioenergy ventures, numbers on labour intensity
(and employment potential) are particularly variable, depending on factors like feedstock choice, degree of
mechanization in harvesting feedstock crops, processing
technology and economies of scale. The number of direct
and indirect ethanol jobs per petajoule (PJ) ranges from
45 (corn-based) to 2,200 (sugar cane) for example, while
for biodiesel, the range is from 100 (soya bean) to 2,000
(oil palm) jobs/PJ (Chum et al., 2011).
2. Estimate of worldwide renewable energy
employment
Available estimates suggest that global direct and indirect
renewable energy jobs in 2009-10 is approximately 5 million (table 5.3), more than twice than the estimate of 2.3
million in 2006 presented in the 2008 UNEP Green Jobs
report (UNEP et al., 2008). Available employment data
Chapter 5: Energy
Table 5.3 Estimated renewable energy employment worldwide in major economies (direct and indirect jobs) in 2009/10 (thousand jobs)
World
China
India
Biomass
750
266
58
Biofuels
1,500
Biogas
230
1
Geothermal
90
Small hydro
40
Solar PV
CSP
820
889 4
90
300
United States
European Union
152
273
160
151
85
53
10
53
12
8
16
112
82
268
40
9
Solar heating/cooling
900
800
41
Wind power
670 3
150
42
5,040
1,606
350
Total 2
Brazil
9
50
14
75
253
913
505
1,117
Power and heat applications.
Rounded; derived from the totals of each renewable energy source.
3
Bloomberg New Energy Finance (BNEF) estimates 675,000 solar PV jobs and 517,000 wind jobs worldwide, reflecting a different calculation methodology.
4
Includes 200,000 indirect jobs in manufacturing the equipment needed to harvest and refine sugar cane into biofuels.
Sources: APEC, 2010; AWEA, 2012; AWEA, 2011; Bezdek, 2007; Bimesdoerfer et al., 2011; BNEF, 2012b; De Almeida et al., 2007; EurObserv’ER,
2011; Greenpeace, 2011; GSPR, undated; ILS and MOHRSS, 2010; IUES and CASS, 2010; Jennejohn, 2010; Junfeng, 2007; Junfeng et al., 2010;
MNRE and CII, 2010; REN21, 2011; The Solar Foundation, 2011; WWEA, 2011.
1
2
also only partially account for the jobs connected with
many rural energy projects, such as small wind turbines,
village-scale mini-grids, solar home systems, biogas digesters and mini- or micro-hydro plants. While these do
not currently amount to large numbers in most developing
countries, there is considerable potential for future job
creation.
Table 5.3 shows that fairly comprehensive estimates of
renewable energy employment are available for a number
of countries, including China, India, the United States
and the members of the European Union (and partial estimates for Brazil, which is a key player in the field of
biofuels). These countries are both major manufacturers
of renewable energy equipment and leading installers, and
thus account for the bulk of employment in this sector.
China: The country has emerged as a global leader in
the renewable energy market in a remarkably short time
and may have the largest number of jobs in this sector. To
a considerable extent this result can be attributed to its
low labour productivity, when compared with Western
countries. However, continued overcapacities may mean
that the workforce in China’s solar and wind industries is
larger than can be sustained in the long run. For instance,
the China PV Industry Alliance suggests that as many as
500,000 people are employed in this sector (Bohua, 2012)
but, the industry is plagued by oversupply problems,
leading many firms to shut down some of their production.
Greenpeace (2011) estimates that 300,000 jobs may be a
more accurate reflection of current realities.
India: A joint report by India’s Ministry of New and
Renewable Energy and the Confederation of Indian
Industry offers current employment estimates and projections for 2015 and 2020, based on a series of estimated
employment factors for each energy source (see table 5.4).
The single largest component is found in the solar PV
sector (on-grid and off-grid). India’s National Solar
Mission represents an ambitious effort to scale up the solar
industry, although domestic producers had a relatively
weak showing in a first round of bids in 2011, raising the
question of whether most PV manufacturing jobs would
be created in India or abroad (Makhijani, 2011).
United States: In 2011, the Brookings Institution published a report, Sizing the clean economy, which included
estimates for employment across the renewables industry.
According to Brookings, there were about 138,000 jobs
in 2010, up from 111,000 in 2003; some 55,000 of these
were in hydropower (large- and small-scale), about 24,000
each in wind and solar PV and 21,000 in biofuels and biomass. These numbers, however, include direct jobs only,
and are therefore considerably lower than estimates from
other studies (Muro et al., 2011).
European Union: According to the 2011 edition of the
State of Renewable Energies in Europe (EurObserv’ER,
2011), direct and indirect European renewables employment stood at an estimated 1.1 million jobs in 2010, up
from 1.0 million in the previous year. Biomass, solar PV
and wind were by far the most important employers in
the renewables sector (figure 5.2, panel A). Germany con-
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Table 5.4 Direct and indirect renewable energy employment in India, 2009/10 and 2015/20
Current employment,
2009/10
(thousand jobs)
Projection to
2015
(thousand jobs)
Projection to
2020
(thousand jobs)
Wind
42.0
44–80
46–160
Solar PV on-grid
40.0
39
152
Solar PV off-grid
72.0
140
225
Solar thermal
41.0
123
270
Biomass power
35.0
47–62
60–100
Biomass gasifier
22.5
30–39
38–63
Biogas
85.0
150–196
240–395
Small hydro
12.5
16–20
20–30
350.0
589–699
1,051–1,395
Total
Note: Projections are a range for moderate and high scenarios. Solar projections are for 2017 and 2022, respectively, and only a single scenario is given.
Source: MNRE and CII, 2010.
80
tinues to be the continent’s leader with regard to renewables, with one-third of the jobs, followed by France, Italy
and Spain (figure 5.2, panel B). The most recent German
annual assessment found that the number of jobs had risen
to almost 382,000 in 2011, primarily due to the expansion
of the solar PV sector (O’Sullivan et al., 2012). This sector
has also been hit by overcapacity and plant closures.
However, job losses have been limited since, of the total
130,000 jobs in PV, only 18,000 are in PV panel manufacture (Die Zeit, 2012). In Spain, however, regulatory
uncertainties, economic crisis and the emergence of new
international competitors have combined to cause the loss
of more than 20,000 renewable energy jobs in 2008–2010,
primarily in the solar PV sector (APPA, 2011).
The remainder of this section will discuss three key renewable energy sources – wind, solar (principally, solar
PV and, briefly, solar heating and cooling) and bioenergy
– given that they are dominant in terms of both investments and installations. Small-scale hydropower and
geothermal energy play a comparatively small role as does
CSP for the time being, although investments are rising
(REN21, 2011). CSP systems are still comparatively small
employers today, accounting for roughly 40,000 jobs globally, mostly in Spain and the United States (BNEF, 2012b).
The Global Climate Network has nevertheless estimated
that, by 2050, close to 240,000 people could be employed
in this field (GCN, 2010).
Figure 5.2 Renewable energy employment in Europe, by energy source and country
Panel A. By energy source
Solar
Thermal
4%
Heat
Renewable Municipal
Pumps
Waste 2%
4%
Geothermal 1%
Biogas
Small Hydro 1%
5%
Biofuels
13%
Solar PV
24%
Panel B. By country
All others
158,565
United Kingdom
31,700
Germany
361,360
Denmark 36,400
Austria 41,600
Finland 48,620
Wind
22%
Sweden 54,780
Spain 98,300
Solid Biomass
24%
Source: EurObserv’ER, 2011.
Italy 108,150
France 174,735
Chapter 5: Energy
3. Wind power
More than 100 countries have started developing wind
power (Junfeng et al., 2010). At the end of 2010, direct
and indirect employment in the wind power industry
worldwide was estimated at 670,000 (WWEA, 2011).
Europe has long been a pioneer in wind energy development. From 154,000 direct and indirect wind power
jobs in Europe in 2007 (EWEA, 2009), the number had
grown to 253,000 in 2010 (EurObserv’ER, 2011).
Germany has by far the largest European wind workforce,
followed by Spain and Italy. Remarkably, Denmark has
about 23,500 direct and indirect jobs – a large number for
a relatively small country (EACI, 2009), reflecting its status
as Europe’s original wind pioneer and home to turbine
manufacturer Vestas, a global leader in wind technology.
National government policy is an important driver of
renewable energy development, but sub-national authorities can also play a leading role. Spain’s Navarra region
demonstrates the significance of skills-mapping and efforts
to promote skills-building and training (box 5.1).
Europe has long been the leader in the wind industry,
but Asian countries are fast becoming important actors.
China was estimated to have some 150,000 jobs in 2009,
a number that could rise to 430,000 jobs by 2030 (Junfeng
et al., 2010). India’s wind workforce, estimated at 42,000
in 2009, could grow to 160,000 by 2020 (MNRE and
CII, 2010). The United States has the second-largest installed wind capacity after China, and the Global Wind
Energy Council and Greenpeace (2010) predict that direct and indirect wind power jobs in North America will
grow from 85,000 in 2009 to an optimal 700,000 by 2030.
Wind power employment in other parts of the world is
still limited – with just 13,700 jobs in OECD Asia, 8,500
in Eastern Europe and Russian Federation, and fewer than
7,400 in Latin America. However, if African countries succeed in developing local manufacturing facilities, as many
as 60,000 to 80,000 jobs could be created across the continent (GWEC and Greenpeace, 2010).
Five of the top ten global wind energy project developers are based in the European Union, and they account
for almost 57 per cent of the roughly 54 GW of cumulative
capacity installed by the top ten developers. The top ten
also include three Chinese companies as well as one firm
from the United States and one from Australia (EWEA,
2012).
Among wind turbine manufacturers, the top ten companies accounted for approximately 80 per cent of the
global market at the end of 2010.1 European turbine manufacturers – principally Denmark’s Vestas, Germany’s
Enercon and Siemens and Spain’s Gamesa – have long
dominated the world market and still accounted for onethird of sales in 2010 (EWEA, 2012). But they are
increasingly being challenged by Chinese firms, including
market leaders Sinovel, Goldwind and Dongfang, which
have captured 85 per cent of their home market and 31
per cent of global sales. As the lead market shifts from
Europe to Asia, manufacturers are relocating production
capacity – and jobs. For the time being, wind research and
innovation are still taking place primarily in Europe, but
Vestas, for example, opened its first Chinese R&D centre
in 2010 (Lema et al., 2011).
Box 5.1 Navarra: A wind power success story
Spain’s Navarra region, with a population of 620,000, has seen the share of wind power in local electricity generation
jump from zero in 1994, to 46 per cent in 2008-09 (with other renewables contributing to a further 20 per cent).
Following an economic downturn in the 1980s, a tripartite agreement was struck between the provincial government,
businesses and unions to promote an active industrial policy, with renewable energy development as a key element.
The regional government first identified skills shortages and resolved to build the local skills base needed for the
expansion of the renewables sector. In 2001, two institutions were created for research and development and
workers’ training, respectively: the National Renewable Energy Centre (CENER) and the Training Centre for Renewable
Energy (CENIFER). Set up by the regional government and sector enterprises, CENIFER offers a wide range of
training courses, ranging from wind power engineers to maintenance staff. Beyond Navarra, CENIFER was designated
as a National Renewable Energy Training Centre, training workers and students from all over Spain. The region’s
overall industrial policy, of which renewable energy promotion was part, was instrumental in bringing unemployment
down from a peak of 12.8 per cent in 1993 to 4.8 per cent in 2007. Renewable energy companies themselves
are credited with creating more than 6,000 direct jobs, of which just 18 per cent are low-skilled.
Sources: Strietska-Ilina et al., 2011; Roig Aldasoro, 2009; Gobierno de Navarra, 2010; Nordic Centre for Spatial Development, undated.
1
Deloitte, Make Consulting and BTM Consult offer slightly varying
estimates of market share for the top ten, ranging from 79 to 82.5 per cent.
81
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
GWEC and Greenpeace (2010) jointly prepared three
long-term global scenarios – Reference, Moderate and
Advanced – providing broad indicative overviews of what
might be expected in the coming decades, given different
levels of investment and commitment. Under the
Advanced scenario, worldwide employment could grow
to 1.9 million jobs by 2020 and 3.4 million jobs by 2050.
These estimates include employment in manufacture,
component supply, wind farm development, installation
and transportation, as well as indirect employment along
the supply chain.
4. Solar energy
Solar photovoltaics
82
PV technology is by far the dominant solar power technology, and developments in this area have accelerated in
2011. Worldwide PV installations reached a record high
of 27.4 GW in 2011 – an increase of 40 per cent in a
single year. The top five countries in terms of installations
– Germany, Italy, China, the United States and France –
accounted for 74 per cent of the global total. Worldwide
solar cell production grew by 28 per cent in 2011 to reach
29.5 GW. China has captured a growing share of the
global market once dominated by European PV manufacturers. In 2011, it accounted for 74 per cent of global cell
production, up from 63 per cent in the previous year
(Solarbuzz, 2012).
The rapid expansion of China’s PV industry is also reflected in growing employment. However, as already
noted, there is a considerable degree of uncertainty about
precise job numbers, given the extent of overcapacities. A
2011 report suggested a figure of 300,000 jobs
(Greenpeace, 2011). The Global Climate Network
(GCN, 2010) projected that investments in line with the
Chinese government’s 2020 energy targets might create
as many as 880,000 solar PV jobs. This presupposes, however, that capacity issues are successfully addressed.
Even though China has captured a growing share of a
market once dominated by European (and earlier,
Japanese) manufacturers, overall European employment
has nonetheless increased from more than 190,000 jobs
in 2008 (EPIA et al., 2009) to 268,000 in 2010
(EurObserv’ER, 2011), because the total market is expanding rapidly. Germany is the European leader both in
PV manufacturing and in installations. Notwithstanding
growing pressure on its PV manufacturers (Q Cells, which
once held the lead position in the market, announced in
April 2012 that it would file for bankruptcy and reorganize), German PV jobs edged up from 108,000 in 2010
to 111,000 in 2011 (Leone, 2012; O’Sullivan et al., 2012).
Spain, however, has lost several thousand PV jobs, largely
due to poorly designed government policies that triggered
a debilitating boom-bust cycle (Cameron, 2010).
As is the case in the wind industry, the solar PV industry is undergoing major realignments and shifts from
European to Asian companies. This may have significant
consequences for the geographic breakdown of manufacturing employment, but sales, installations and repair jobs
are, by their very nature, local. Thus, the countries with
large installations will continue to create employment in
the “downstream” portions of the PV value chain.
In the United States, the Solar Foundation reported
100,237 jobs in 2011 for all solar technologies, a figure
that includes manufacturing, installations, wholesaling
and other activities (The Solar Foundation, 2011). The
report does not single out photovoltaics from other solar
technologies. The PV portion is likely to account for more
than 80 per cent of the total, or about 82,000 jobs
(Greentech Media, 2011).
India is a relative latecomer to solar PV, but employment relating to on-grid PV equipment is already
estimated by the Government to amount to 40,000 jobs,
and employment relating to off-grid applications to 72,000
jobs. Under its 2008 National Action Plan on Climate
Change, the Government plans to increase grid-connected
capacity from 100 MW in 2008 to 20 GW in 2022, and
anticipates the generation of some 152,000 jobs, with another 225,000 in off-grid equipment production (MNRE
and CII, 2010).
There are important job opportunities for countries
that do not have a solar manufacturing industry (or only
limited capacities) but ample solar radiation. Sales and distribution, installations and maintenance offer important
employment generation opportunities in these countries,
principally in the developing world. It is also worth noting
that jobs relating to smaller solar PV systems may have a
significant impact on employment across the developing
world, as the example of Bangladesh shows (see box 5.2).
Small-scale solar systems such as SHS and solar
lanterns offer a range of environmental and health benefits,
and the potential market is large. According to Lighting
Africa – a solar portable lighting programme run by the
International Finance Corporation and the World Bank
– the solar portable light market is poised for rapid growth
over the next five years, as improved technology and better
distribution networks emerge, and costs will continue to
decline. Lighting Africa predicts that 5–6 million African
households and small businesses will own solar portable
Chapter 5: Energy
Box 5.2 Solar home systems in Bangladesh
Approximately half of the population of Bangladesh – some 85 million people – lacks access to grid-based electricity.
The Government issued a road map in 2010 detailing its intention to extend electrification to all Bangladeshis.
Since 2003, installations of solar home systems (SHS) have grown rapidly, reaching about 1.2 million units at the
end of 2011. The driving force behind these efforts has been Grameen Shakti, a subsidiary of micro-credit pioneer
Grameen Bank.
The current goal is to reach 2 million SHS by 2014. Solar home systems offer a light source that is far more
powerful than highly polluting kerosene lamps, and provide battery power for mobile phones, radios and televisions.
The increased light output facilitates the growth of small businesses, such as mobile phone-charging, and increases
the hours during which children can study for school.
The introduction of SHS requires a range of skills and occupations, including solar energy technicians, service engineers, branch managers and financial specialists, among others. The most recent estimates put the number of
SHS sector jobs in Bangladesh at 60,000 or more. Most of the workers are young “field assistants” who sell and
install SHS, and provide maintenance services. Grameen Shakti’s goal is to reach at least 100,000 direct jobs by
2015.
Technical training programmes at about 50 Green Technology Centers (GTC) have benefited several thousand people.
Women have been major beneficiaries. Some 5,000 women were instructed in proper usage of SHS, more than
1,000 female technicians were trained to assemble, install and maintain them and the GTC are run by female engineers.
Sources: Strietska-Ilina et al., 2011; IDCOL, 2011; Bimesdoerfer et al., 2011; Arthur, 2010; UNCTAD, 2009; UNEP, 2011.
lights by 2015, even under business-as-usual (BAU) trends,
and as many as 12 million will own them if circumstances
prove more favourable (Lighting Africa, 2010).
The widespread deployment of solar products in developing countries still faces a range of obstacles, including
up-front costs that require financing solutions such as
micro-credit programmes, and distribution networks that
can gain the trust of would-be customers (Ariel, 2011). In
many developing countries, solar programmes are still currently quite small, but can be scaled up with appropriate
financing and other policy support. Training programmes
for assembly, sales, installation, maintenance and repair
are essential, and offer potentially large-scale employment
opportunities.
Solar heating and cooling
China is currently the undisputed global leader in solar
heating and cooling, estimated to employ around 800,000
people (ILS and MOHRSS, 2010). European countries
come a distant second to China, collectively employing
about 50,000 people in this field (EurObserv’ER, 2011).
Germany, Greece, Turkey and Japan, constitute the
second-tier powers, but other countries, notably India and
Australia, are beginning to catch up (REN21, 2011).
Brazil is also expanding its market, and some 51,600 jobs
could be created by 2018 in the manufacturing and main-
tenance of solar thermal systems (GCN, 2010). China is
a major exporter of solar water heaters to other developing
countries, but cost is still a brake on market expansion,
and thus also on local job creation in sales and installations.
In Addis Abeba, Ethiopia, for example, the removal of
electricity and fuel subsidies did increase demand for solar
water heaters, but only about 10 per cent of the city’s population has been able to afford them (UN-Energy
Knowledge Network/Africa, 2007).
5. Bioenergy
Biomass – biological material derived from living or recently living organisms – is typically used for the
generation of electricity and heat, and sometimes transformed into liquids for use in transportation. The
development of bioenergy – biofuels, biogas and biomassderived electricity and heat – generates employment in a
variety of ways, from the very labour-intensive cultivation
and harvesting of biomass, to processing of feedstock into
usable energy, to distribution and marketing. Projections
for future employment are generally encouraging, but the
numbers vary widely, depending not only on the type of
bioenergy considered, but also on a range of specific assumptions about costs, technological developments and
other factors.
83
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Biofuels
84
In the bioenergy field, biofuels – bioethanol and
biodiesel – tend to attract most attention. Biofuels provided about 2.7 per cent of worldwide road fuels in
2010. Brazil and the United States are the dominant
producers of ethanol, accounting for 88 per cent of production. Biodiesel production is less concentrated, with
the leading country, Germany, having a 15 per cent
share. Other significant producers are Argentina, Brazil,
France and the United States (REN21, 2011).
Worldwide, it is estimated that more than 1.5 million
are employed in the biofuels industry (REN21, 2011).
Brazil has the highest ethanol-related employment
numbers, with about 190,000 people employed in
ethanol production and almost 500,000 in cultivating
sugar cane from which the ethanol is derived.2 A large
proportion of the jobs involve the manual cultivation
and cutting of sugar cane. Many of the workers did not
finish elementary school and about 7 per cent are illiterate (GSPR, undated). According to an APEC study
(APEC, 2010), about 60 per cent of all Brazilian ethanol
industry employment in 2006 was in unskilled positions
(mostly as sugar cane cutters). About 10 per cent were
semi-skilled positions (truck and tractor drivers). The
remaining 30 per cent were skilled positions (industrial
workers and supervisors at ethanol refineries) offering
good wages.
In addition to the direct employment from cultivating and distilling sugar cane into ethanol, a 2007
study (De Almeida et al., 2007) estimated indirect jobs
– in manufacturing the equipment needed to harvest
and refine the sugar cane into fuels –at another 200,000.
There is additional employment in the transport sector,
since Brazil’s motor vehicle fleet has been converted to
flex-fuel, capable of running on either gasoline or
ethanol (see Chapter 9 of this report on transport).
The burning of sugar cane leaves to facilitate manual
cutting is being phased out in Brazil as mechanized harvesting takes precedence (Sawaya Jank, 2009; Soybean
and Corn Advisor, 2011). The job Losses associated
with mechanization may be offset by a planned additional 18 million hectares of biofuel crops by 2020,
forecasted to create some 150,000 new jobs (GCN,
2010). Nonetheless, mechanization does present a challenge to many unskilled workers and it will be necessary
2
This job figure covers only the portion of sugar cane which is harvested for biofuel production. Another 570,000 people work in sugar
production.
to implement retraining programmes. An existing good
example is the one launched by the Brazilian Sugarcane
Industry Association (UNICA) and other employers in
2009 aimed at retraining some 7,000 workers annually
for a range of occupations, including drivers, farm machine operators, electricians, tractor mechanics,
beekeepers and reforesters (BSIA, undated).
In India, the government has plans to grow biofuel
crops on 7 million hectares. It projects that up to 5 million jobs could be created through village-based biofuels
production, and another 5 million from full-scale industrial biofuels production (GCN, 2010)3. China has
similar ambitions, with officials estimating that, in the
long term, some 9 million jobs could be supported by
biofuel development. It remains to be seen to what degree such projections are translated into reality and, for
the time being, numbers remain far more modest. For
example, a study by Asia-Pacific Economic Cooperation
(APEC) estimates current ethanol and biodiesel employment among APEC’s 21 Pacific Rim member
countries at about 240,000 (see table 5.5). It should be
noted, however, that the APEC figures for the United
States appear conservative. A 2007 input-output study
for the American Solar Energy Society (ASES) put direct US biofuels jobs at 70,000, with possibly as many
as 160,000 jobs in the supply chain (Bezdek, 2007). If
Table 5.5 Estimated biofuels employment in APEC states, 2008
(thousand jobs)
Ethanol
Indonesia
0.7
Biodiesel
Combined
114
114.7
United States
38
9
47
Malaysia
—
24
24
Thailand
2
19
21
Philippines
—
19
19
Peru
—
9
9
2.6
6.6
196.6
241.3
All other APEC
countries
Total
4
44.7
Source: APEC, 2010.
3
The job calculations are based on the assumption that one direct job
per hectare is created in establishing and managing plantations and a further
15 jobs per village from processing the crops and related commercial
activity.
Chapter 5: Energy
APEC countries were to make available 20 per cent of
their current starch, sugar and oil crop production for
biofuel production – leaving aside food-versus-fuel concerns – they could potentially create as many as 825,000
jobs. South Africa has few jobs in this sector at present,
but is thought to have a long-term potential of 53,000
jobs (Maia et al., 2011).
Biomass and biogas
The United States, Brazil, Germany, China and Sweden
are currently the top five producers of biomass power,
while Japan and the United Kingdom also undertake
significant production. The leading biomass conversion
equipment manufacturers are located in Sweden,
Finland, Denmark, Austria, Poland and Germany
(REN21, 2011).
A 2007 estimate for China was 266,000 jobs
( Junfeng, 2007). However, it is unclear whether this
figure is for biomass heat and power generation alone,
or if it also encompasses biogas and biofuels. The United
States is thought to have at least 66,000 biomass-related
jobs (REN21, 2011), although a 2007 modelling exercise suggested that there were many as 152,000 jobs
(Bezdek, 2007). Together with 58,000 jobs in India
(MNRE and CII, 2010) and 273,000 jobs in the EU
(EurObserv’ER, 2011), these various estimates add up
to approximately 750,000 jobs worldwide. This figure
is likely to grow in the coming years, as indicated by a
recent joint European Commission and International
Labour Organization estimate, forecasting a possible 2.1
million jobs worldwide by 2030 in the production of
biomass-based electricity (EC and ILO, 2011).
Biomass plays a particularly important role in developing countries, notably in the alleviation of energy
poverty. In Mali, for example, where less than 20 per
cent of the population has access to modern energy supplies, a jatropha-based rural electrification programme
is seen as an essential aspect of poverty reduction. In
the community of Garalo, home to more than 10,000
people, a jatropha project has created around 50 jobs
for biofuel technicians, machine maintenance technicians and jatropha nursery workers (Strietska-Ilina et
al., 2011).
Biogas (which can be used for cooking, lighting and
power generation) is also growing in significance. Biogas
jobs in the European Union are estimated at 53,000
(EurObserv’ER, 2011). In developing countries, more
than 44 million households use biogas made in smallscale digesters for lighting and/or cooking. The bulk of
these households – some 40 million – are in China
(REN21, 2011). During 2006–2010, a massive construction effort took place, generating about 26,000
direct and 64,000 indirect jobs (IUES and CASS,
2010). According to India’s Ministry of New and
Renewable Energy (MNRE and CII, 2011), India has
some 85,000 biogas jobs. About 4.1 million family-size
biogas plants have been installed altogether, and India
has a growing domestic industry (box 5.3).
Box 5.3 Indian biogas and biomass enterprises
India has a growing number of companies that develop biogas plants on a large scale. Among them is SKG Sangha
in Karnataka, with more than 80,000 plants using animal and household wastes as feedstock, and built and maintained by some 2,000 employees. In Kerala, another company, Biotech, has installed over 16,000 plants of varying
size, which rely on home, municipal and commercial waste as feedstock.
Decentralized Energy Systems India Ltd (DESI) initiated the “EmPower Partnership Programme”, involving 100
villages, to facilitate social investment for decentralized biomass electrification in rural areas. The programme was
launched in Araria District in the state of Bihar in February 2005. Its objective was to link 100 small biomass
gasifier-based power microenterprises owned by village cooperatives in order to provide access to energy and to
help reduce poverty. Altogether, the programme is expected to create more than 2,500 direct year-round jobs, as
well as an unspecified number of indirect jobs through increased farm production, new trading and commercial
activities and energy services.
Sources: Arora et al., 2010; UNCTAD, 2009.
85
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
C. Transition from conventional
energy to renewable:
Challenges and issues
86
As countries embrace renewable energy sources, it is to be
expected that conventional energy jobs will decline even
faster than they have in recent years. The impact on overall
energy employment remains to be seen, but the available
literature indicates that renewables typically create more
jobs than fossil fuels, whether measured by unit of energy
production or by unit of investment. Wei et al. (2010)
offer a review of 15 US studies supporting this broad
conclusion.
UNEP’s Green Economy report compares a global
business-as-usual (BAU) scenario with one under which
renewable energy receives the bulk of additional energy
investment, equal to 0.52 per cent of global GDP, allowing
renewables to account for 27 per cent of primary energy
use by 2050. Under the BAU scenario, total energy sector
employment is projected to decrease slightly, from 19 million in 2010 to 18.6 million in 2050. Under the alternative
scenario, coal extraction and processing jobs undergo considerable decline, and employment shifts towards
renewables. As the labour productivity of a maturing renewable energy industry rises, total employment in the
energy supply sector is projected to reach 18.3 million by
2050, but energy efficiency investments bring the total to
23.4 million, an increase of 21 per cent compared with
the BAU scenario (UNEP, 2011)
Macroeconomic modelling (PANTA RHEI) undertaken for the German Environment Ministry (BMU,
2010) compared a “zero scenario” of 2000–30 energy
trends without the development of renewables to a
number of scenarios with different growth rates for renewables. The study confirmed the core findings of earlier
studies: the development of renewable energy sources has
overall positive net employment effects.
The underlying dynamics in the conventional energy
industry point towards continued job losses due to ongoing
automation and other means of increasing labour productivity. The extraction of oil, gas and coal employs more
than 10 million people worldwide, and thermal and electricity plants add a substantial number of jobs. According
to the World Coal Institute (2005), more than 7 million
people are employed in coal mining (WCI, 2005).
Worldwide employment in oil and gas extraction and production declined from more than 4 million in 2004 to
about 3 million people between 2004 and 2006. The
number of people working in the utilities sector stands at
slightly over 11 million (but this includes water utilities in
addition to electricity and gas) (ILO, 2011). In most countries, employment in power plants has declined over the
past two decades, following deregulation and growing automation. Some 70,000 South African power sector jobs
have been lost between 1980 and 2000, at the same time
as electricity generation increased by more than 60 per
cent. In the European Union, an estimated 300,000 jobs
in the electricity generation sector were cut between 1997
and 2004 (GCN, 2010).
As the most carbon-intensive fuel producer, the coal
industry will probably feel the shock of a transition towards greater sustainability more than any other sector.
China alone had an estimated 6.6 million coal miners
in 1998, down from 7.6 million in 1992 (Qingyi, 2000).
In the United States, too, growing automation and labour
productivity have led to a steep drop in coal-mining
employment, from 785,000 miners in 1920 to a low of
69,000 in 2003, though recovering to 87,000 in 2011
(Source Watch, 2011; USBLS Database, undated).
A 2009 ETUC study, modelling future trends in the
European electricity generation sector and assessing direct
jobs in operations and maintenance found that while coaland oil-related jobs fall from 105,000 in 2005 to a mere
30,000 by 2030, natural gas jobs will expand (table 5.6).
The same study confirms the findings of a 2007 ETUC
report, which argued that EU measures to reduce CO2
emissions by 40 per cent by 2030 would have a slightly
positive net impact on employment (ETUC et al., 2007).
In China, the picture is a similar mix of good and bad
news. An assessment by the ILO and the Chinese
Academy of Social Sciences, for example, finds that the
closure of inefficient coal-fired power plants will lead to
Table 5.6
European power sector employment (direct jobs
in operations and maintenance), 2000, 2010
and scenario for 2030 (thousand jobs)
2000
2010
2030
Coal
87
83
26
CCS
0
0
46
Oil
18
17
4
Nuclear
46
43
37
Natural gas
34
53
66
Renewables
26
49
117
Total, direct
211
245
296
Note: The numbers do not include jobs generated through exports.
Source: ETUC, 2009.
Chapter 5: Energy
the loss of some 800,000 jobs in the period 2005–20, but
that desulphurization measures might create more than 1
million new jobs over the same period, for a net gain of
about 280,000. The study also projects that, with growing
wind and solar development, there will be an overall net
gain of 4.4 to 5 million direct and indirect energy industry
jobs over the same period (IUE and CASS, 2010).
D. Job quality, skills
and transition
The quality of employment in the renewable energy sector
naturally varies because it encompasses a broad set of jobs
and occupations. An important element of those jobs entails the manufacturing of various types of equipment, from
wind turbines and solar panels to ethanol distilleries and
biogas digesters. But other jobs concern selling, distributing, installing and maintaining equipment, while the
harvesting of feedstock for bioenergy encompasses work
which falls more within the confines of agriculture than
industry or the service sector. Therefore, wages and work
conditions vary considerably.
There is evidence from Germany and Spain that renewables jobs are overwhelmingly permanent, full-time
positions, with a relatively small share of temporary employment. In Germany, 96 per cent of renewables jobs are
permanent positions, a much higher share than in other
sectors of the economy (Wissenschaftsladen Bonn, 2010).
Similarly, a 2010 study in Spain found that 99.7 per cent
of green jobs in the country are permanent, compared to
just 72 per cent in the Spanish economy as a whole
(Strietska-Ilina et al., 2011).
Studies in both countries also indicate that the qualification levels of workers in the renewable energy sector
substantially exceed the average for the national workforce,
in terms of both university degrees and vocational education and training levels (EC and ILO, 2011). In Spain,
half of renewable sector employees have completed university studies and 29 per cent have undertaken vocational
education and training, compared with 23.5 per cent and
18.6 per cent, respectively, for the rest of the economy. In
Germany, 82 per cent of employees in the renewables sector
have completed vocational training, and almost 40 per
cent of these have a university degree. The comparative
figures for all industrial sectors are just under 70 per cent
and 10 per cent, respectively.
Available information about wage rates in the renewable energy sector offers a mixed picture. In the United
States, an analysis of a number of wind and solar manufacturing facilities found that wage rates were “below the
national average for workers employed in the manufacture
of durable goods” (Mattera et al., 2009). Of 20 plants
studied, only five paid wages that were at or above the
US$18.88/hour average rate prevalent in late 2008, a
finding that may principally reflect the fact that few
workers in the US wind and solar industries are covered
by collective bargaining agreements. According to Good
Jobs First, while some renewable energy companies work
with unions – notably Spanish wind turbine manufacturer
Gamesa, which has a manufacturing facility at an abandoned steel mill in Pennsylvania – others have strongly
opposed efforts to organize (Mattera et al., 2009). A 2010
collective bargaining agreement between Gamesa and the
United Steelworkers offered wage and benefit increases,
and introduced a gain-sharing incentive programme under
which monthly payouts are based on quality, productivity
and production targets (Enhanced Online News, 2010).
Information about wages in the solar industry is sparse.
However, it appears clear that China has captured a large
share of the global market, in part because of low wages,
putting pressure on higher-wage producers like Germany,
Japan and Spain. But even within those countries, wage
levels can vary regionally. A substantial proportion of
German solar PV manufacturing is, in fact, taking place in
low-wage eastern Germany, with some 85,000 jobs
(O’Sullivan, 2011).
A survey by China’s Ministry of Human Resources and
Social Security found that workers at wind power enterprises had higher average annual incomes and better job
security, experienced better occupational conditions and
enjoyed a higher level of workplace protection measures
than their counterparts in the conventional power generation sector. Meanwhile, some 77 per cent of surveyed
Chinese wind power workers considered their work environment “very good”, compared with just 18 per cent in
large thermal power plants and 13 per cent in small plants
(ILS and MOHRSS, 2010).
The bulk of the jobs in biofuels development involve
the harvesting of feedstock, work that is physically demanding and often not well paid. In Brazil, sugar cane
cutting has long been characterized by poor working and
living conditions and high rates of job injuries. But collective bargaining and public policy have generated significant
improvements in the past several years, including real wage
increases, expanded social benefits, increased job formalization and efforts to eliminate child labour. In July 2008,
a tripartite dialogue was initiated to improve working and
living conditions for cane cutters. In 2009, a set of voluntary commitments was agreed with regard to health and
87
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
88
safety, work contracts, union organizing and other issues,
to be monitored and evaluated by a national commission
(GSPR, undated).
According to a joint study by the EC and the ILO
(EC and ILO, 2011), there are skill shortages in all subsectors of the global renewable energy industry, notably
in interdisciplinary areas such as leadership and management, in engineering and technical occupations, and in
those involving sales, inspections and financing. Such
shortages hold back the process of greening and act as a
constraint on the development of future capacity. Skill
shortages in bioenergy-related occupations are acute,
partly because training programmes are lagging behind
rapidly growing demand in many countries and partly because of the broad variety of types of bioenergy feedstock
sources, processing technologies and outputs used, all demanding specialized skills.
Even European countries, which have in many cases
taken the lead in developing renewable energy technologies, face a shortage of appropriately qualified workers for
occupations within the professional and technical, engineering and management areas (Poupard and Tarren,
2011). Countries in other parts of the world face at least
comparable shortages and will have to develop appropriate education and training strategies (GCN, 2010).
STEM skills (science, technology, engineering and
mathematics) are critical assets in the renewable energy
sector, but even more important is the right mix of skills,
combining specific job-related skills with creativity,
adaptability and an ability to develop “transversal” skills
at the intersection of different fields and competencies
(Poupard and Tarren, 2011; EC, undated). And, while
apprenticeships will play an important role, increased
workplace training by itself is not a sufficient remedy for
skills shortages. Governments must develop national skills
strategies that facilitate a broader process of continuous
learning, rather than focusing on short-term responses.
Countries need coherent strategies that bring together
energy, environment, education and skills development
objectives, policies and responsible ministries, in order to
adapt to climate change and shift to clean and sustainable
production and consumption in ways that maximize the
creation of decent work and make it available to all.
Countries succeeding in such a challenging task place a
high premium on effective social dialogue, coordination
among ministries and communication between employers and training providers. Labour market
information systems, institutions for social dialogue and
labour market mediation services are prerequisites for anticipating future skill needs and adapting skills
development systems accordingly (Strietska-Ilina et al.,
2011). Skills councils have shown their worth in encouraging such dialogue, helping to address existing or
emerging shortages in a number of countries, including
Canada, France, Republic of Korea and the United
Kingdom (EC and ILO, 2011).
A key question in the transition towards a more sustainable energy industry is whether and to what extent
existing occupational profiles and skills can be adapted
from the conventional energy sector. A country like the
United Kingdom, for instance might be able to draw on
the existing knowledge base in the offshore oil and gas
sector as it develops a domestic wind manufacturing industry (GCN, 2010). Skills in oil drilling could also be
applied to geothermal development. And many of the
skills employed in running fossil fuel power stations – including those of electrical engineers, electrical technicians,
electricians and information technology specialists – can
be adapted to operating renewable power plants (EC and
ILO, 2011).
Still, without careful planning and adequate support,
including transition assistance to affected workers, the
process of transition is likely to be painful. Adapting existing jobs to new circumstances and reskilling workers
will be a high priority. Beyond the immediate need to
match training to labour market needs, skills development
systems can play a catalytic role in promoting the growth
of sustainable economic activity, enabling enterprises and
entrepreneurs to adapt technologies and to compete in
new markets (Strietska-Ilina et al., 2011).
Poland’s experience with restructuring its coal mining
industry between 1990 and 2006 underlines the difficulty that workers may face in a broader move away from
fossil fuels, as well as the need for a well-designed and
fair transition strategy – adequate social programmes, retraining efforts and economic diversification of regions
dependent on the coal industry. In Poland, unprofitable
mines were closed down and coal production was slashed
from 147 million tonnes in 1990 to 94 million tonnes in
2006. Employment fell even more dramatically from
388,000 to 119,000 over the same period. In 1993, social
programmes for miners were established but were underfunded and proved unappealing. A new programme in
1998 had greater success because it more than tripled
available funds, to about US$1.5 billion over 5 years. Out
of the 103,000 workers who left coal mining between
1998 and 2002, 7,000 received financial assistance.
Because many of the miners had only vocational training
specific to mining, retraining proved to be a considerable
challenge. Nonetheless, by 2003, as many as two-thirds
of these workers had found new jobs outside mining
(Suwala, 2010).
Chapter 5: Energy
Moving away from the fossil fuel industry towards
solar and other renewables promises substantial occupational health benefits. This is especially true with regard
to coal-mining. Although the work tends to pay well,
coal mining is one of the most hazardous industries for
workers in terms of their long-term health and exposure
to accidents (Summer and Layde, 2009).
That is not to say that occupational hazards do not
exist in the renewables sector. A number of toxic substances are used in solar PV manufacturing, for instance.
However, with proper safety and waste recovery procedures, these occupational health concerns can be largely
neutralized. PV technology continues to evolve, and it
is not yet clear whether the emerging thin-film and nanotech-based solar technologies will trigger occupational
concerns (SVTC, 2009). Meanwhile, as a European assessment of occupational health and safety issues in the
renewable energy industry notes, construction and maintenance of industrial-scale CSP installations entails some
electrical hazards, and hazards from concentrated sunlight in the form of potential exposure to high
temperatures. For solar thermal equipment, installers
who previously worked only on gas systems will face increased exposure to electrical work (EASHW, 2011).
None of these issues, however, represent challenges that
are out of the ordinary in an industrial setting.
E. Conclusions and way forward
The renewable energy industry continues to be on a steep
growth trajectory, aided by strong supportive government policies. Even though there are still some significant
data gaps, it is clear that employment has expanded significantly, from an estimate of 2.3 million in 2007-2008
to about 5 million direct and indirect jobs as of 20102011. A relatively small group of countries has so far
taken a central role in manufacturing solar panels and
wind turbines, and in generating modern forms of energy
from biomass.
Information on employment in the renewable energy
sector has expanded considerably in the past few years.
Beyond the initial leaders, including Brazil, China,
Europe, Japan and the United States, the renewables
sector is now gaining ground in a number of emerging
and developing countries. However, there is still a need
for better information, especially concerning aspects
such as wage rates and job quality, and in developing nations information remains relatively sparse.
In the poorest countries and communities, lack of access to adequate, clean energy remains a central fact of life.
If the investment levels that are required to secure universal
access to energy for cooking, heating, lighting and other
needs – estimated at up to US$48 billion per year (IEA,
2011) – materialize, many millions of jobs and livelihoods
could be created. The experience of SHS dissemination
in Bangladesh suggests that important poverty-reduction,
health and educational goals can be achieved with the help
of adequately scaled renewable energy technologies. The
case of Bangladesh also shows how critical skills training
and job creation are for maintaining working, viable renewable energy systems once they are installed. In contrast
with the success story of Bangladesh, the majority of SHS
installed in certain remote areas of Thailand quickly malfunctioned due to lack of upkeep.
Information about the quality of jobs in the renewable
energy sector is still relatively limited. The picture that
does emerge is one of mixed quality. Some solar and wind
manufacturing companies offer well-paying, decent jobs
with excellent career prospects. But there are also examples
of companies that seek to compete and make profits on
the basis of cheap labour and unsatisfactory working conditions. This suggests that labour organization and the
willingness to engage in collective bargaining and other
forms of social dialogue are critical factors.
To date, the growth of the renewable energy industry
has not had the effect of substituting fossil fuels, so much
as supplementing them. Job loss in the fossil fuel industry
has principally been due to rising automation and labour
productivity. However, the transition from fossil fuels to
a more sustainable energy sector, which is necessary to
avert a full-blown climate crisis, will eventually have greater
impacts. Evidence suggests that renewables are better job
creators than the fossil fuel industry. Overall, a net increase
in employment may be expected. Renewables employment
is limited relative to total economy-wide employment but
has already grown to a very significant level within the energy sector.
Those workers, communities and regions that are affected by this transition will need proactive and equitable
transition assistance, in the form not only of reskilling and
skill-upgrading, but also the provision of social programming where needed (see Chapter 10 for more
information). More broadly, it also makes sense to pursue
the diversification of the economic base of regions that
are highly dependent on the fossil fuel industry. Skills and
training efforts are needed not simply to address the needs
of declining parts of the energy sector, but also to accompany and guide the expansion of the renewable energy
industry.
89
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94
Chapter 6
Manufacturing
Main findings
● A small number of resource-intensive manufacturing
industries account for a major share of total energy
and resource use as well as emissions of greenhouse
gases (GHG) and other pollutants. Greening these
sectors will be a major step towards achieving environmentally sustainable economies. These industries
are also important drivers of economic development
and provide many often well-paid jobs. Between
them, aluminium, iron and steel, and electric and
electronic products employ some 25 million workers
and there is some concern that the greening process
would lead to job losses in these sectors.
● Potential for improvement can be found in the manufacturing processes themselves, along the value chains
of the products and in better integration with other
sectors, such as the use of waste heat for power generation and of by-products as inputs for other industries.
Combined heat and power (CHP) already employs an
estimated 800,000 people; a rough calculation suggests
that this could rise to more than 2 million by 2030. Environmental and social life-cycle assessments, product
labels and certification schemes, as well as dialogue between workers and employers, are effective tools for
identifying opportunities to make supply chains more
environmentally and socially sustainable.
● The evidence reviewed suggests that greening has
been, and is likely to continue to be, only a minor factor in any reduction in employment. The principal
factors governing reduced employment in industries
such as iron and steel are increasing automation and
rising labour productivity that have evolved over several decades. Improving energy and materials productivities is essential to secure the future viability of
these industries and their workforces.
● An assessment made in the United States suggests that
almost 100,000 jobs – approximately 14 per cent of
total employment in the steel, aluminium, cement and
paper industries – can be considered to be green. Some
87,000 jobs in the US electrical and electronics industry – just 6 per cent of total employment – fall under
this heading. Similar assessments would be required in
other countries to make a global estimate.
● Green manufacturing can act as a catalyst for lifecycle innovation and green job creation – as well as
job retention – in the manufacturing sector and its
value chains, including services for product eco-design, industrial ecology, energy efficiency and renewable energy, waste management and valuation of
natural assets. Greening manufacturing can lead to
significant reductions in resource use and pollution
in these energy-intensive industries and help to save
existing jobs by improving overall efficiency and generating new revenue from former waste materials and
energy.
● Labour–management cooperation in the workplace
can be an effective way of greening manufacturing. The
Pollution Prevention Pays or 3P programme launched
by the 3M company in 1975 relied on workers to identify opportunities directly. It has cumulatively prevented an estimated 1.4 billion kilograms of pollutants
and saved the company nearly US$1.4 billion. In Chile,
a seriously polluting copper smelting plant saw its emissions reduced by over two-thirds in a joint labour–
management initiative and was effectively saved from
having to be closed on environmental and health
grounds, maintaining 1,500 jobs at the plant.
95
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Introduction
96
Responsible for over one-quarter of primary resource extraction, about 35 per cent of global electricity use and
more than 20 per cent of CO2 emissions, manufacturing
is an obvious target for greening initiatives. Manufacturing
is also responsible for around 10 per cent of global water
demand and accounts for 17 per cent of air pollution-related morbidity (UNEP, 2011b). Given that we eventually
throw away most of the consumer goods that we buy, and
that so many of them appear to be deliberately designed
for obsolescence, manufacturing can also be considered a
significant generator of waste. The case for adopting
greener manufacturing practices is therefore easily made.
But reform initiatives cannot be undertaken without recognizing the extent of the contribution to employment
that the manufacturing sector makes. Industry, broadly
defined (including manufacturing, extractive industries
and construction) accounted for approximately 23 per
cent of global employment or over 660 million jobs in
2009, a number that has grown by more than 130 million
since 1999 (ILO, 2011). Moreover, manufacturing employment tends to pay above-average wages.
This chapter will focus on five manufacturing sub-sectors that are both energy-intensive and heavy users of
natural resources. Four of these are basic industries: iron
and steel, aluminium, cement and pulp and paper. One
sub-sector, electrical and electronic products, is heavily reliant on a wide range of metals, from copper to various
rare earths, and thus also is closely connected to energyintensive inputs. That industry is also generating a rapidly
rising volume of problematic waste. With the exception
of pulp and paper, these manufacturing sectors also play
a vital role as suppliers of inputs to green growth sectors
such as renewable energy, eco-efficient building and mass
transportation.
According to ILO data, the electric and electronic
products sub-sector employs by far the largest number of
people within the industry, with approximately 18 million
workers (ILO, 2007). Iron and steel employs approximately 5 million workers, pulp and paper 4.4 million,
aluminium 1 million and cement 850,000. In recent
decades, all of these sub-sectors, with the exception of the
electrical and electronics industry, have experienced stagnating or even declining levels of employment, in spite of
continuous increases in output (UNEP, 2011b).
There are three main drivers of change in the sector:
globalization, increasing raw material prices and technological innovation. Globalization has resulted in an
increasing shift of manufacturing from North America
and Europe to lower-wage producers in Asia. China has
emerged as the leading producer of steel, aluminium and
cement. Rising raw material costs mean that the development of more efficient production methods becomes
highly desirable. Technological innovation has, of course,
been at work for decades, increasing labour productivity
and causing a steady decline in job numbers. Since 1970,
the European cement industry, for example, has halved its
workforce, while more than doubling productivity from
1,700 tonnes per worker annually (Syndex et al., 2009).
More recently, the global recession has impacted employment, with temporary and subcontracted staff being the
first to suffer. Meanwhile, increasing resource scarcity is
taking its toll, notably on the electrical and electronics industry. High-grade and easy-to-refine copper ores are
becoming scarcer and low-grade ores require more energy
in the extraction and refining processes. And while rarer
metals such as silver, indium and tellurium are mainly extracted from other metallurgical wastes, rare earths,
obtained from a handful of source countries, are posing
growing problems of security of supply.
A. Opportunities: Greening of
the sector and its industries
1. Technical options and solutions
Overall, greening manufacturing requires a combined
strategy of supply-side and demand-side approaches which
aim to implement closed-cycle manufacturing. This can
be achieved through a combination of the measures detailed below (UNEP, 2011b).
Re-design products and production processes so that
the same functionality can be delivered using significantly
less materials and energy, taking into account the full life
cycle of the product. A key aspect of green design is the
extension of products’ useful life by making them easy to
repair, recondition, remanufacture and recycle, thereby
laying the foundation for closed-cycle manufacturing.
Reducing the energy required to produce a tonne of steel
or other basic materials is another key element of any
greening strategy.
Substitute “green” inputs for “brown” inputs wherever
possible and apply the principles of industrial ecology to
production processes and systems. This can be achieved
by feeding the by-products of one industry into the production process of another and has the potential to be
implemented on a very large scale. For example, iron and
steel slag can be used as raw material input for cement pro-
Chapter 6: Manufacturing
duction. Based on typical ratios of slag to crude iron and
steel output, it has been estimated that annual world iron
and steel slag output was in the order of 250–275 million
tonnes by 2000, some 220–420 million tonnes by 2005
(USGS, 2006) and 350–450 million tonnes by 2010
(USGS, 2011).
Recycle by using by-products of production processes
and substituting scrap for virgin material inputs in manufacturing. Recycling offers the prospect of dramatically
improved energy efficiency in the metals manufacturing
industries. Recycled aluminium requires only 5 per cent
of the energy of primary production. The International
Aluminium Institute (2009) reports that the global inventory of aluminium in use has grown from 90 million
tonnes in 1970 to about 600 million tonnes today and is
forecast to reach more than 1 billion tonnes in 2020. The
recycling of high-temperature waste heat from processes
such as blast furnaces or cement kilns for electric power
generation using CHP (discussed below) is another
greening initiative that is as yet largely unexploited.
Make remanufacturing a core aspect of any greening
industry strategy. Remanufacturing is most widely used in
areas such as motor-vehicle components, aircraft parts,
compressors, electrical and data communications equipment, office furniture, vending machines, photocopiers
and laser toner cartridges. Remanufacturing saves significant volumes of fuel and raw materials. In the United
States, some 70,000 firms in the remanufacturing industry
employ an estimated 480,000 people. The vast majority
of these jobs are in the automotive sector; the electrical
equipment sector accounts for about 10 per cent of all remanufacturing employment. The number of jobs in
remanufacturing is roughly equal to that in the US consumer durables industry (Hauser and Lund, undated). A
major obstacle to remanufacturing is that strategies for extending the useful life of manufactured products depend
on active cooperation from original equipment manufacturers (OEMs). Unfortunately, OEMs tend to focus on
making products as un-repairable as possible, so that old
products are typically discarded and sent directly to
landfill.
Promote combined heat and power (CHP) as a key component of greening manufacturing strategy. A growing
number of European countries are using CHP, including
Denmark, which derives 52 per cent of its power needs
from CHP. Dick Munson of Recycled Energy, a US firm,
has offered a rough calculation that some 25 workers, on
average, are required to operate and maintain 10 MW of
existing CHP capacity. Based on this estimate, and assuming that this employment factor can also be applied
to other countries, the global CHP capacity of 330 GW
would provide more than 820,000 jobs (Munson, 2009;
IEA, 2008). Direct jobs are complemented by indirect
employment at supplier companies, site developers, firms
involved in designing, constructing and installing CHP
facilities and related equipment, as well as those in energy
efficiency consulting. CHP promises more employment
than do conventional power plants and represents a winwin solution for manufacturing industries. In the United
States, a large-scale expansion of CHP could provide 20
per cent of electricity generating capacity by 2030 and
create nearly one million highly skilled jobs (Recycled
Energy Development, 2010). The IEA (2008) offers a
projection of CHP potential by 2030 for the G8 + 5 countries1 of 833 GW, or about 500 GW more than today.
Disregarding improvements in labour productivity, the
same rough formula would suggest an employment potential of more than 2 million.
97
2. Policy instruments being applied
One of the key challenges for policy-makers is to encourage
closed-cycle manufacturing, for example, by encouraging
large multinational systems integrators, who manufacture
automobiles, electronics and other goods, to be responsible
for integrated materials management throughout the entire supply chain. Regulatory and control mechanisms,
including the issuing of permits and Extended Producer
Responsibility (EPR) beyond the useful life of the
product, can be used to promote principles such as the
three ‘Rs’ of reduce, reuse, recycle (3R) and ‘Polluter Pays’.
Regulations such as the Waste Electrical and Electronic
Equipment (WEEE) of the EU have had an impact worldwide on the manufacturing and use of products.
As major sources of pollution, the manufacturing industries have traditionally been natural targets of
regulations. In some cases these regulations need to be reformed; in others new rules are required to drive or scale
up needed transformations. Regulations should also be
combined more effectively with market-based approaches,
allowing appropriately structured markets to reflect the
real price of energy and other resources and allowing manufacturing industries to innovate and compete on a fair
basis. The use of economic instruments can reduce monitoring costs for regulators, but requires a willingness to
undertake thorough economic analysis of their likely costs,
1
The G8 + 5 are: Canada, France, Germany, Italy, Japan, Russian
Federation, the United Kingdom and the United States plus Brazil, China,
India, Mexico and South Africa.
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Box 6.1 Greening manufacturing through stakeholder dialogue – the Top Runner programme in Japan
One innovative example of policy designed to promote efficiency standards for electrical appliances is Japan’s Top
Runner Programme, which applies to machinery and equipment in the residential, commercial and transportation
sectors. Instead of setting a minimum efficiency standard, the programme identifies the most efficient model on
the market and then makes that the standard that others have to match within 4–8 years. This provides time for
manufacturers to adapt and/or invent an even more efficient product. The Top Runner standards are set by committees
with representatives from the manufacturing industry, trade unions, universities and consumer organizations. Its
product standards consider a basic index, such as the weight of a car, the size of a TV screen, or the power of an
air conditioner. The programme’s effectiveness depends partly on the fact that non-compliance is published, thus
putting the brand image of a company at risk. Consumers are also made to assume a certain level of responsibility
through a related efficiency labelling system, which allows them to make more informed purchasing choices.
Source: UNEP, 2011a.
98
benefits and effectiveness in order to design such instruments correctly. Japan’s Top Runner programme is an
example of a highly successful strategy that combines
mandatory and market-based approaches (box 6.1).
Governments can complement regulations with carefully targeted taxes and subsidies. The greening of
manufacturing industries in developing countries can be
supported via project-based activities such as the Clean
Development Mechanism (CDM) under the United
Nations Framework Convention on Climate Change
(UNFCCC). However, political agreement and procedural improvements will have to expand significantly from
the currently small number of CDM projects involving
investment in energy efficiency and fuel switching.
Expanded mechanisms under the UNFCCC, such as
REDD+, also offer opportunities for manufacturing enterprises, notably pulp and paper, to invest in sustainable
forest management and gain credits to help offset their
environmental impacts in different locations and stages of
the manufacturing value chain.2
Of the four emissions reductions levers assessed by the
World Business Council for Sustainable Development
(WBCSD et al., 2009) in its cement technology roadmap
up to 2050, improving energy efficiency is managed by
the industry itself, but use of alternative fuels, clinker substitution and carbon capture and storage (CCS) are
influenced principally by policy and legal frameworks.
Alternative fuel substitution rates in the developing world
are still low, and thus present a considerable opportunity
for future resource productivity and job creation.
Finally, the greening of manufacturing can be supported by effective reporting and tools designed to raise
awareness about the practices used by manufacturers, such
as life-cycle assessments (see box 6.2), as well as product
2
The REDD+ scheme under the UNFCCC recognizes conservation,
sustainable management of forests and enhancement of forest carbon stocks
as activities eligible for crediting.
labels and certification schemes. Sector supplements for
measurement and reporting by the mining and metals, cement, forest products and telecommunications industries
exist under the Global Reporting Initiative (GRI) and
sector initiatives of the WBCSD, addressing topics such
as GHG accounting and labour standards (GRI, undated;
WBCSD, 2006). Regulators are showing growing interest
in mandatory reporting requirements.
In energy-intensive industries, reducing the overall environmental footprint will help to maintain the future
competitiveness of companies as the importance of greater
energy and materials productivity rises. This may not necessarily create large numbers of new jobs, but is essential
to protect existing jobs, and softens the impacts of the
transition towards a more resource-constrained future.
B. Impacts of greening on
employment and incomes
in manufacturing
1. Basic materials industries
In basic materials industries, such as steel, aluminium and
paper production, the use of recycled scrap materials in
place of virgin production serves as one indicator of
greening these highly energy-intensive manufacturing activities. The ability to rely on scrap requires that a
well-functioning recycling system, with adequate material
flows and accurate market prices, be established. This
ability still varies markedly among different countries and
regions of the world.
Large quantities of steel and aluminium are found in
products and in the built environment, which have lifetimes that range from the fleeting (such as aluminium
Chapter 6: Manufacturing
Box 6.2 Environmental and social life cycle assessments
In the ICT field, design changes that permit easier reconditioning, remanufacturing and recycling of scarce metals
help to facilitate the separation of electrical and electronic components from structural components of appliances
and vehicles. This is important both to recycle the rare metals that are increasingly being used in electronic products
and to reduce the extent to which these same metals (especially copper) become unwanted contaminants of
secondary (recycled) aluminium and steel. The R&D and design phases present a critical point of departure for
applying life cycle assessment (LCA) approaches, including more recently developed methodologies combining
social as well as environmental LCA (UNEP, 2011a).
Apple was the first company in the consumer electronics industry to complete a comprehensive life cycle analysis
of its products to establish where its GHG originated and determined that the carbon footprint of its average product
broke down as follows: 46 per cent emissions are associated with manufacturing, 45 per cent with the use of the
product, 6 per cent with transportation, 2 per cent with non-manufacturing facilities (including corporate offices,
data centres, and distribution and retail stores) and 1 per cent with recycling. Apple committed to designing the
next generations of products to use less material, ship with smaller packaging, be free of avoidable toxic substances,
and be as energy efficient and recyclable as possible (Apple, undated). In contrast to its environmental efforts,
however, Apple has come under increasing criticism over labour practices in its supply chain.
Social life cycle assessment is a more recent innovation. It considers impacts on various groups, including
workers, local communities, society at large, consumers and value chain actors. It takes into account human
rights, working conditions, health and safety, cultural heritage, governance and socio-economic repercussions.
The application of a social and environmental LCA to the life of a laptop computer by Ciroth and Franze
(2011), using the UNEP SETAC (2009) guidelines, provides further insights to help develop more integrated
and coherent policy approaches (end-of-life, informal recycling was not covered due to lack of data). It was
found, for example, that significant environmental and human health impacts are associated with energy
use and resource extraction. Negative social impacts were related to working conditions at the resource extraction stage. The analysis showed some overlap between the environmental and social hot spots identified,
related to the mining and production stages of the value chain.
cans) to several years (motor vehicles) to decades (buildings and infrastructure). This affects the rate at which
materials can be recovered and fed into scrap-based manufacturing. With regard to aluminium, for example,
developing countries tend to use a larger share in electrical
systems and a smaller share in transportation than do in-
dustrialized countries. As a result, developing countries
are likely to generate aluminium scrap in longer term cycles, affecting the availability of scrap for reuse purposes
(Menzie et al., 2010).
As Chapter 7 notes, the recycling of many metals remains largely unexploited, and thus employment in the
Figure 6.1 Share of steel production based on scrap, selected countries, 2006–10 (millions of tonnes)
600
500
Virgin
400
Scrap-based
300
200
100
0
China
Source: BIR, 2011.
European
Union
Japan
United
States
Russian
Federation
Turkey
99
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
100
metals industry has the potential to become much greener.
The iron and steel industry performs comparatively well,
although globally the use of steel scrap is down from 40
per cent in 2006 to 38 per cent in 2010. The share of
scrap-based manufacturing also varies considerably among
different countries. China uses only 14 per cent recycled
steel (BIR, 2011), whereas the United States and Europe
(56 per cent) have far higher rates (at about 70 and 56
per cent) (figure 6.1). China’s rapid growth of steel output
has outpaced its ability to use scrap material, and the
country does not yet have large stocks of old steel that it
can rely on for recycling purposes, as is the case in other
advanced countries.
Reliance on scrap is one of a number of factors, along
with others such as overall energy efficiency of production
facilities, quality of energy and material inputs, that determine the share of basic industries that can be considered
to be green. In the United States, the Bureau of Labor
Statistics (USBLS, 2012) has made a detailed and comprehensive effort to delineate the scope and extent of green
goods and services across the national economy. This effort
includes estimates for the number of green jobs in 2010
in the steel, aluminium, cement and paper industries. Table
6.1 also includes numbers for the electrical and electronic
equipment industry. Although the US paper and cement
industries are far larger employers than the iron and steel
industry, USBLS finds that a larger share of iron and steel
jobs can be considered green, and that therefore the largest
number of green jobs, close to 44,000, is in the steel sector.
Altogether, almost 100,000 jobs – out of a total of
about 700,000 jobs in the four basic industries examined
in this chapter – can be considered green, according to
USBLS. These findings do not translate to other countries
because the specific details of their industries may vary
considerably. Therefore, similar types of national assess-
Table 6.1
ments would have to be undertaken in other countries in
order to generate a global estimate of the extent of green
employment in these industries.
Beyond an assessment of the present situation, a
number of modelling exercises support the notion that
the widespread adoption of green practices in basic industries will have a net positive effect on jobs. This section
collates findings from studies focused on China, the
European Union (EU) and the United States.
In the steel industry, recent business-as-usual (BAU)
projections for Europe and the United States suggest job
losses of 40,000–120,000 over the next two decades,
largely due to growing competition from Asia, where production costs, in particular wages, are lower. The BAU
scenario in a study on climate action by the European
Trade Union Confederation (ETUC et al., 2007) projected that 50–75 MT of steel capacity (the equivalent of
25–37 per cent of current production) might be relocated
outside the EU by 2030, resulting in a loss of between
54,000 and 80,000 jobs. However, in an alternative scenario European authorities and industry pursue a
low-carbon strategy, saving 50,000 jobs. The low-carbon
strategy would involve investment in R&D, installing
more efficient technologies and, significantly, applying a
tariff on steel imports based on carbon content, thus enabling steel production by low-carbon processes to be
competitive.
A comprehensive input-output analysis for the
European Commission (EC) undertaken by GHK (2007)
considers direct, indirect and induced impacts in the steel
industry. Assuming that 10 per cent (by value) of virgin
material inputs will be replaced by recycled steel with
no effect on overall input costs, the GHK scenario
predicts net job gains in the supply chain, as detailed in
table 6.2.
Green jobs in selected US basic industries, 2010
Employment
Total
Green goods and services
(thousands of jobs)
(%)
Iron and steel mills and ferro-alloy manufacturing
85.8
43.7
50.9
Alumina and aluminium production
54.1
9.0
16.6
Cement and concrete product manufacturing
169.8
13.6
8.0
Paper manufacturing
392.9
30.5
7.8
Total across four industries
702.6
96.8
13.8
Source: USBLS, 2012.
Chapter 6: Manufacturing
Table 6.2
Estimated output and job impacts on European steel production with 10 per cent increased use of recycled materials
Loss
(virgin material sector)
Gain
(recycled material sector)
Net result
Direct
- €489 million
- 4,092 jobs
+ €489 million
+ 5,952 jobs
€0 million
+ 1,860 jobs
Indirect
- €83 million
- 753 jobs
+ €280 million
+ 2,534 jobs
€197 million
+ 1,781 jobs
Impacts
Direct and indirect
impacts:
+ 3,641 jobs
Source: GHK, 2007.
For the European cement industry, ETUC et al. (2007)
project a BAU scenario of moderate annual growth in European cement consumption of 1–2 per cent to 2030. This
implies a 2.6 per cent increase in CO2 emissions by 2012
and 5.2 per cent by 2030, when compared to 1990 levels
– a far cry from the EU’s objective of reducing emissions
by 8 per cent in 2012 and 30 per cent in 2030. If the EU
were to meet these objectives through a severe curtailment
of production, including large-scale relocations, capacity
closures and growing recourse to imports, losses could
amount to 4,300 jobs in 2012 and 16,000 in 2030. An alternative scenario includes policies such as the introduction
of a carbon tax on imported cement, voluntary measures
taken by European producers, and the introduction of
cleaner technologies. This scenario assumes only a slight
drop (–1.2 per cent) in European cement production and
a carbon price of €15 per tonne of CO2, resulting in the
industry maintaining its production capacity and employment levels.
It is sometimes argued that higher carbon prices and
the proximity of producers who are not subject to Kyoto
Protocol and Emission Trading Scheme requirements pose
the risk of carbon leakage. In this regard, a study by Boston
Consulting Group, commissioned by Cembureau, has suggested that at €25 per tonne of CO2, some 80 per cent of
European cement production may be at risk of relocation
to North Africa (Syndex et al., 2009). More ambitious scenarios targeting Factor 4 efficiency3 improvements and a
76 per cent reduction in emissions would demand ambitious R&D programmes (on new cement binders, for instance) with public and private funding as well as training
programmes targeting both the industry and its clients
(public works for local authorities).
GHK (2007) offer an assessment of increased energy
efficiency across the entire European manufacturing sector.
The study assumes that economically viable technology
alternatives exist and explores the impact of reducing the
euro value of energy inputs by 10 per cent. Energy savings
are reinvested consistent with current investment patterns
and lead to a net increase in output of nearly €482 million,
with an eventual net gain of 137,171 jobs across all sectors.
The large positive employment impact is mainly due to
the fact that the energy sector is less labour-intensive than
other sectors of the economy. The manufacturing sectors
producing energy-efficient technologies and their suppliers have higher multiplier effects in terms of both jobs
and output.
Another GHK scenario examines the impact of the
take-up of efficiency and low-carbon technologies by the
most energy-intensive manufacturing industries. It assumes that the investment costs for new technologies are
higher than conventional technologies (table 6.3). A 10
per cent reduction in energy inputs, coupled with a 10 per
cent increase in energy-efficiency investments, yields a net
increase in output of nearly €9 billion and 91,000 jobs
(GHK, 2007).
In China, the Government targeted energy consumption and emissions reductions in the iron and steel industry
as part of its Eleventh Five-Year Plan. The plan envisaged
three options: replacing excess capacity, adopting cleaner
technologies and improving production processes. To cut
capacity, China is already working towards shutting down
outdated production facilities. The 2009 Restructuring
and Revitalization Plan for the Iron and Steel Industry is
expected to result in the loss of 390,000 to 400,000 jobs.4
At the same time, due to the sheer scale of the industry,
3
Factor 4 efficiency is a scenario that foresees a quadruple increase in
research efficiency by using already existing methodologies and avoiding
any negative impact on life quality.
4
As agreed in the Letters of Commitment signed between the
National Development Commission and 30 provinces, municipalities and
autonomous regions, a total production capacity of 91.92 million tonnes
was to be closed down by the end of 2010, involving 952 blast furnaces
from 948 companies.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Table 6.3
Estimated output and jobs due to take-up of energy efficiency and low-carbon technologies by energy intensive
industries in Europe
Loss
(energy sector)
Gain
(all other sectors)
Net result
Direct
- €8,004 million
- 29,559 jobs
+ €9,015 million
+ 83,494 jobs
+ €1,011 million
+ 53,935 jobs
Indirect
- €2351 million
- 15,409 jobs
+ €10,278 million
+ 52,389 jobs
+ €7,927 million
+ 36,980 jobs
Impacts
Direct and indirect
impacts:
+ 90,915 jobs
Source: GHK, 2007.
102
it is expected that the overall promotion and adoption of
advanced energy-saving and emissions-reduction technologies will create at least 200,000 direct jobs. The
industry therefore faces a net reduction in jobs of around
190,000 to 200,000 (IUE and CASS, 2010). This loss is
likely to be more than compensated for by gains in other
sectors, such as renewable energy, forests and services.
2. Electrical and electronic equipment
As was discussed above for basic industries, the USBLS
(2012) offers a similar assessment of US green employment in the other industry examined in this chapter –
electrical and electronic equipment production. Table 6.4
shows that a relatively small proportion of total employment (some 87,000 jobs in 2010) can be considered to
meet green criteria. No comparable assessments appear to
have been undertaken in other countries.
Table 6.4
A greening of technologies and practices in the electrical and electronics industry is critical, not simply in
terms of energy use and GHG emissions, but also with a
view towards improving recycling methods. The rapid obsolescence of consumer electronics (so called e-waste) has
received increasing attention in recent years, especially
with regard to the disposal of computers and mobile
phones. E-waste contains many hazardous substances, including lead, mercury, cadmium and brominated flame
retardants (BFRs) that are harmful to both humans and
the environment. An estimated 20–50 million tonnes of
e-waste are disposed each year(UNEP, 2011a), a large proportion of which is exported for dismantling to countries
with weak or poorly enforced regulations. As Chapter 7
discusses, large numbers of people in countries such as
China and India are involved in materials recovery, but
many of these jobs can hardly be considered either green
or decent. Hundreds of thousands of workers handling ewaste are exposed to significant occupational health and
safety hazards.
Green jobs in the US electrical and electronics industries, 2010
Employment
Total
Green goods and services
(thousands of jobs)
Computer and electronic product manufacturing
Electrical equipment and appliance manufacturing
Total across four industries
Source: USBLS, 2012.
(%)
1,097.2
43.1
3.9
356.1
45.8
12.9
1,453.3
88.9
6.1
Chapter 6: Manufacturing
Table 6.5
Estimated new jobs and savings in the United States due to enforcement of appliance and equipment efficiency standards
Year
Number of jobs per year
Annual energy bill savings (US$)
2010
+340,000
34 billion
2020
+387,000
64 billion
2030
+380,000
68 billion
Source: Gold et al., 2011.
In the United States, Gold et al. (2011) conclude that
significant numbers of jobs can be created and energy
saved over the coming years by the implementation of improved efficiency standards (table 6.5). These standards
originate in the Appliance Energy Conservation Act of
1987 and cover a wide range of products, from dishwashers
and washing machines to refrigerators and computers.
Over the years, the list has been expanded, based on agreements between manufacturers, energy experts and federal
states. The analysis by Gold et al. also covers new standards
likely to be issued by the regulator up to 2014.
It is worth noting that these estimates are, in large part,
driven by the so-called re-spending effect. When consumers spend money that they save on energy to purchase
other goods and services, net job gains typically ensue because non-energy goods and services are typically more
labour-intensive than those in the energy industry. The
associated modelling results also show positive net wage
impacts. Some 6,000 of every 100,000 net jobs created
due to energy efficiency gains are manufacturing jobs
(Gold et al., 2011).
The costs of introducing the standards, historically
often overestimated by the regulator, tend to have less of
an impact on jobs than is anticipated. Manufacturers are
normally given, say, 3 years of lead time before having to
comply with the new standards. This provides them with
a breathing space to consider whether more costly products may result in lower sales and employment, and
whether more complex manufacturing may require more
labour input. In meeting higher standards, the trend has
been for electrical goods manufacturers, such as General
Electric in the United States, to invest in more advanced
factories and new approaches, for example “lean manufacturing” which involves a range of value chain actors
from design to supplies and production.
Taking into account the potential for growth in energy
efficiency and low-emission energy production technologies suggested by McKinsey (2009) and others in scenarios
up to 2020, Syndex et al. (2009) report on the job creation
potential in the European machinery and electrical equipment industries – two sectors which together employ
about 7.4 million people in the EU-27 Member States.
Based on a number of assumptions (the EU’s world market
share will not change over the next decade, labour productivity will rise by 3 per cent annually, no serious
relocations outside the EU will occur) the study estimates
that 670,000 additional jobs could be created by 2020.
Another 250,000 jobs could be created by affiliated engineering and service suppliers.
C. Examples of good practices
at sector and enterprise level
1. Innovative applications of life-cycle
management
Leading corporations are collaborating with their suppliers
and downstream business partners to find innovative applications of life-cycle management, thus helping to
produce more sustainable goods and services. A good example of this is steel industry leader ArcelorMittal (2011),
a company included in the Dow Jones Sustainability Index
and a member of SOVAMAT (Social Value of Materials,
a consortium of producers of steel and non-ferrous metals,
concrete and wood), established with the objective of
defining the role of structural materials in the future “postcarbon” economy. Pursuing new trends in life-cycle
management, its participants also aim to support their
value chain partners during this transition (SOVAMAT,
undated). Such collaborative arrangements also serve to
secure jobs and define the new skills that employees will
need in a time of transition. One of the key R&D initiatives of ArcelorMittal research centres is a project with the
automotive industry that has resulted in a portfolio of 60
new lightweight steel solutions that its experts claim can
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
cut carbon emissions by up to 13.5 per cent during a car’s
lifetime. Its R&D also focuses on improved steel structures
for the towers of wind energy turbines. In the United
States, ArcelorMittal has used a brownfield tax credit to
turn a former steel plant on the shores of Lake Erie in New
York State into an eight-turbine 20 MW wind farm that
will supply sufficient electricity to power some 6,000
homes.
2. Transitional measures to support
employees entering new industries
104
Employers can play a key role in providing transitional
measures to support employees who may need to enter
new industries. A noteworthy player in the area of alternative career development is UK Steel Enterprise, a
non-profit subsidiary of another industry giant Tata Steel.
It deals with the consequences of a historical process of
modernization and substitution of technology for employees in the steel industry. UK Steel Enterprise was
established in 1975 to support redundant steel workers in
their efforts to gain new employment. Seeking to improve
the economies of regions that are most affected by changes
in the steel industry, it provides tailored financial services
for small business development, office rental facilities and
local community development support. To date, it has
helped to create nearly 70,000 new jobs and supported
more than 4,500 small businesses (Tata Steel Europe,
undated).
3. Improving effectiveness of climate
initiatives
Manufacturing industries are implementing climate strategies and involving employees in schemes to improve the
effectiveness of their climate initiatives. For example,
mining giant BHP Billiton (2011), uses headline environmental performance indicators, such as a GHG emissions
intensity index, an energy intensity index, a water use index
(ratio of water recycled to high-quality water consumed)
as well as a land rehabilitation index. Worsley Alumina is
BHP Billiton’s largest energy user in Australia. The Energy
Efficiency Opportunities Act (2006) of the Australia
Government requires Worsley to assess and identify effective ways in which it could improve its energy efficiency.
In response Worsley has developed an energy excellence
and climate strategy, engaging employees, contractors, cus-
tomers and suppliers in finding practical solutions, such
as waste heat recovery. Its employee engagement programme has created an energy-aware workforce that
constantly pursues improvements.
4. Exploring alternative sources of fuel supplies
The pursuit of climate strategies requires the exploration
of alternative fuel supplies. Manufacturing industries have
a key role to play in this endeavour. Examples of manufacturers substituting green for brown inputs can be found
in increasing numbers. In 2010, cement, aggregates, concrete and construction-related services firm Holcim
(2010) had a thermal substitution rate of 12 per cent, processing a total of 3 million tonnes of waste at its production
sites to generate energy based on the burning of alternative,
less carbon-intensive fuels. By 2009, Holcim had already
achieved its own target of reducing net CO2 emissions per
tonne of cement by 20 per cent compared to 1990 levels.
Competitor Lafarge (2011) had achieved a 21.7 per cent
reduction by 2010.
5. Resource efficiency strategies
In some instances, manufacturers are also using resource
efficiency strategies to approach their resource use in an
integrated way, measuring and tracking progress of the
business benefits and engaging employees to ensure continual improvement. An example is the conglomerate 3M
(2011), which had reduced its worldwide GHG emissions
by 72 per cent in 2011, compared to a 1990 baseline, and
emissions of volatile organic compounds by 95 per cent.
The company’s Pollution Prevention Pays or 3P programme, initiated in 1975, has cumulatively prevented
more than 1.4 billion kilograms of pollutants and saved
the company US$1.4 billion. The 3P programme depends
directly on the voluntary participation of 3M employees,
who have completed over 8,600 3P projects to date.
Projects must meet criteria such as reducing energy use,
making more efficient use of materials and resources and
saving money (for example, through reduced operating
and materials expenses and increased sales of products).
The company’s 2015 Sustainability Goals includes a target
to reduce waste by 10 per cent by 2015 from a 2010 base
year and to improve energy efficiency by 25 per cent by
2015 from a 2005 base year. 3M is also planning to review
suppliers in Brazil, China, India, Malaysia, Mexico,
Chapter 6: Manufacturing
Republic of Korea, Russian Federation, Taiwan, China,
Thailand and Turkey, to ensure compliance with its environmental, health and safety, transportation, labour and
human relations standards by 2015.
6. Role of social dialogue in promoting cleaner
production
Social dialogue can play an essential role in promoting
cleaner production processes. For example, in the electronics industry, a number of companies are taking
voluntary actions to reduce the environmental impacts of
their manufacturing operations. Pursuing such policies
proactively can play an important role in protecting existing jobs in the transition to sustainability. Korean
electronics company LG Electronics (2011) has actively
encouraged its employees to engage in such efforts. It recently established a global labour policy, defining a baseline
for over 120 worksites and offices worldwide. Its LGE
Labour Union has issued a Union Social Responsibility
charter and established an action plan covering seven core
subject areas, including governance, labour and environment (advancing a “low-carbon culture”). By 2010, the
company claimed that GHG emissions from its manufacturing operations were 160,000 tonnes below the 2008
level, and that GHG emissions from the use of its products
were 12.75 million tonnes lower than would have been
the case in the absence of efficiency measures. Its online
climate-change training had a participation rate of over
20,000 employees based in China, Europe and North
America in 2010–11.
D. New skills and professional
service requirements
The smoothness of the transition to greener manufacturing will depend in part on the characteristics of the
sector or sub-sector concerned. Labour intensity, the extent to which workers’ skills match new job requirements,
the speed of technology diffusion and the availability of
well-designed labour market policies to support workers
and businesses – all will affect the greening process
(Strieska-IIina et al., 2011). The training response to restructuring must include not only retraining, but also skills
upgrading. Skills upgrading is especially important in
those industries where employment is stable at present,
but is expected to shrink in future, and in those where
restructuring is being undertaken to make production
processes, goods and services greener. However, even in
shrinking industries, skills upgrading remains important,
especially core, portable skills, sustainability skills and
environmental awareness.
Policy-makers will play an important role in ensuring
that the right mix of incentives to support skills development is provided, but it is clear from the previous
section that leading manufacturing corporations are
themselves instigating a number of significant greening
initiatives and are thus in a position to complement governmental training programmes. Economic recession,
run-away commodity and energy prices provide additional impetus for industries to approach diversification
more innovatively and devise ways to apply core skills in
related business areas, such as new green technologies.
Some enterprises which are active in green technology
innovation have opened their own training centres to
provide a structured response to the need for more complex skills and competencies. Greening manufacturing
affects occupations ranging from those in executive management to researcher, designer, developer, engineer,
industrial technician and machine operator. An assessment in the United States (Dierdorff et al., 2009) has
suggested that the occupational impact of greening manufacturing is most likely to be in the areas of “green
increased demand” and “green enhanced skills” occupations. The Danish clean technology sector, for example,
has highlighted various manufacturing occupational profiles for which existing “competency goals” for vocational
training need to be revised. These are car mechanic, technical insulation specialist, technicians in the fields of
cooling, plastics, metal, process, wind, industry and automation as well as industry operator, industry electrician
and electrician (Strieska-IIina et al., 2011). Responses to
address related educational and skills needs require a
range of institutions and levels of application, from tertiary education to technical and vocational training.
Enterprises need to consider action at different levels,
from site-level awareness raising and instruction to company or broader industry-level training and education.
Action is required not only in technical and vocational education and training of employees who find
themselves in transition within manufacturing industries, but also in the relevant education of new employees
and managers entering or re-entering the market.
Analysis of the European machinery and electrical equipment industries and associated engineering and service
skills has highlighted the need for appropriate educational infrastructure. Based on its assessment, Syndex et
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
106
al. (2009) pointed to the importance of local educational
capacity and the ability to offer energy-related degree
programmes. In Asia, an example of a recent response to
green manufacturing skill needs comes from Singapore,
where the Institute of Manufacturing Technology has
launched a Workforce Skills Qualifications (WSQ)
Graduate Diploma in Process Technology and
Sustainable Manufacturing (EE Times Asia, 2011).
Public and private programmes in technical and vocational training and education will have to consider
multiple effects, including opportunities that exist across
full value chains of manufacturing. Cleaner technology
innovation in manufacturing will, for example, raise demand for new skills and jobs in related service industries.
An important growth area in manufacturing of machinery and electrical equipment is expertise in
improving the energy efficiency of production processes
(Syndex et al., 2009). Engineering companies and contractors working in the manufacturing industries will be
in growing demand to address the optimization of complex production processes, leading to related growth in
the consulting service and energy sectors. The further
development of closed-cycle manufacturing systems and
use of alternative technologies such as CHP will only
increase this demand.
E. Conclusions and way forward
Resource-intensive industries will play a key role in the
transition to a greener economy. On the one hand, the inputs provided by these industries are indispensable to
certain of the green growth sectors, from renewable energy
to eco-efficient buildings and transport. On the other
hand, these industries have major untapped potential to
reduce their environmental footprint.
As McKinsey (2009) has pointed out in its work on
low-carbon pathways, the transition to a green economy
cannot and will not occur without the active involvement
of hundreds of thousands of managers and millions of
workers. Major manufacturing corporations are responding to the green agenda by introducing new
strategies related to climate change, biodiversity and
ecosystem services. This chapter has illustrated that initiatives and regulation-based stakeholder dialogue and
workplace cooperation work well, as evidenced by the
Front Runner programme in Japan. Potential for improvement can be found in the manufacturing processes
themselves, along the value chains of the products and in
better integration with other sectors, such as in the use of
waste heat for power generation and of by-products as inputs for other industries. Environmental and social
life-cycle assessment is a useful tool for identifying opportunities to make supply chains more environmentally and
socially sustainable.
Energy- and resource-efficient, low-pollution and
closed-loop manufacturing requires new skill sets in many
of the existing occupations in the manufacturing sectors.
Beyond the sector itself, green manufacturing can act as a
catalyst for life-cycle innovation and green job creation in
related supply and support industries, including services
for product eco-design, industrial ecology, energy efficiency and renewables, waste management and valuation
of natural assets. As such, skilled jobs in energy-service
and environmental services companies, smart application
of information and communications technologies, repair
and maintenance, as well as in substitute and recycled materials, will be increasingly in demand.
This is also relevant from an employment perspective.
The long-standing decline in the number of workers in
energy- and resource-intensive sectors in all but the fastest
growing economies has been driven primarily by technological and structural change accelerated by globalization.
By comparison, environmental regulation and associated
costs have played a rather minor role. Greening manufacturing can actually help to save existing jobs, by improving
overall efficiency and generating new revenue from former
waste materials and energy. Taking into account related
services and industries, in addition to benefits for consumers, green manufacturing can actually lead to
economy-wide gains in employment.
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Hauser, W.; Lund, R. Undated. Remanufacturing: An American resource, PowerPoint presentation,
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McKinsey. 2009. Pathways to a low carbon economy: Version 2 of the Global GHG Abatement
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109
Chapter 7
Recycling
Main findings
● In a world faced with escalating volumes of often hazardous waste, increased emphasis on recycling and
waste management will be necessary to reduce pressure
on natural resources and safeguard the environment.
The waste management and recycling industry is already a significant employer: an estimated 4 million
workers are employed in the formal sector (based on
studies on China, Europe and the United States). The
numbers, however, are much more significant when informal workers are taken into account: approximately
15–20 million people work as informal waste pickers
in developing countries.
● Increased recycling can lead to significant gains in energy and employment. Specifically, recycling saves large
amounts of energy when compared with the mining
and processing of raw materials. It can also lead to net
gains in employment quantity and quality in comparison to traditional jobs in landfill or incineration of
waste. The employment potential is particularly strong
in countries whose recycling rates are currently low, as
is the case in most developing countries and in Central
and Eastern Europe. However, informal recycling often
involves hazardous conditions for waste pickers, many
of whom live in poverty. While waste pickers make an
important positive contribution to public health – by
reducing and avoiding the accumulation of waste in
public spaces – the recovery of valuable metals from
electronic waste is often carried out in ways that endanger the health of pickers and communities.
● Recycling will only become a truly green activity if
there is a degree of formalization. In fact, formalization
and organization of workers can turn waste management and recycling into a very significant opportunity
for social inclusion. One way to achieve this is for waste
picker cooperatives to be recognized by municipal authorities, as is demonstrated by a number of examples
in Latin America. Indeed, working with community
and waste-picker organizations is infinitely preferable
to trying to sideline them through ill-conceived privatization efforts that do not take local realities into account. Brazil, for example, has put in place an effective
mix of policies, including legal recognition, local and
national organization, entrepreneurial development,
municipal government contracts and facilities (sorting
stations), modern recycling methods, skills training and
occupational safety and health instructions, as well as
measures to prevent and discourage child labour. These
measures can trigger large-scale improvements in recycling efficiency, working conditions and incomes. The
Brazilian poverty eradication strategy aims to formalize
a further 250,000 waste pickers in addition to the over
60,000 already organized.
111
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
A. Greening recycling:
benefits and
policies
112
Global generation of waste is increasing, with emerging
economies adding to the already enormous output from
older industrialized nations. Worldwide, about 11 billion tonnes of solid waste were collected in 2010,
including construction and demolition debris, scrapped
vehicles and tyres, electrical and electronic goods (ewaste), packaging and hazardous waste from industry
(UNEP, 2011a). An even larger, though unknown,
quantity is actually produced, including marine refuse
and the poisonous residues generated by agriculture and
forestry. Waste is also generated as a by-product of many
industrial activities, most notably mining; the extraction
of ores and minerals increased by a factor of 27 during
the twentieth century, and the environmental damage
caused by these processes can only get worse as easily
exploited deposits are exhausted and corporations are
forced to dig deeper (UNEP, 2011b).
The processing and management of waste is itself a
major industry, estimated to generate around US$410
billion annually. This figure does not include informal
waste processing, which is so vital to developing
countries, and is therefore probably a significant understatement of global activity (UNEP, 2011a). Waste
management still relies heavily on the bulldozing of rubbish into landfills or, increasingly, incineration; methods
with a range of attendant environmental and health
costs which simultaneously involve literally throwing
away or burning precious resources.
Recycling includes a range of operations, from the
collection and transport of waste and sorting of different
types of materials, to the actual processing of recycled
material for reuse in new products. “Urban mining” –
the recovery of materials from obsolete products – is of
growing importance in a range of industries, including
the steel and paper industries, and will become especially
important in the recycling of the rare metals so crucial
to cleaner technologies. Manufacturers can play an important upstream role by ensuring that their products
have a minimal environmental footprint and can be
easily recycled.
Greening the waste sector through recycling and
waste reduction not only generates substantial environmental benefits – the most obvious of which are
reductions in air, water and land contamination – but
also reduces the need for logging and mining (table 7.1).
Recycling and waste reduction measures also offer substantial energy and water savings, while reducing
greenhouse gas (GHG) emissions. Finally, as this
chapter will show, recycling offers significant advantages
in terms of job creation. According to the US-based
Institute for Local Self-Reliance (ILSR), for example,
sorting and processing of recyclables sustains ten times
as many jobs, on a per-ton basis, as landfill or incineration (ILSR, undated). Meanwhile, the Alliance of
Indian Wastepickers (AIW) reports that recycling provides 24 times as many jobs per ton of waste as do
incinerators and landfill sites (AIW, 2010).
1. Policy instruments
Table 7.1
Environmental benefits of recycling
Share of scrap in
global supply
(%)
Energy
savings*
(%)
Aluminium
25
95
Copper
>40
85
Plastic
n.a.
80
Steel
44
74
Paper
n.a.
65
Lead
45
65
Zinc
30
60
* Relative to mining and processing of virgin materials.
Sources: Bureau of International Recycling, 2009 and undated.
National authorities can have a significant influence on
the development of recycling markets, either indirectly
through the pricing of energy and materials or directly
through mandates and incentives. But local authorities
play the key role in setting the rules that govern the collection and separation of waste materials. Waste
management policy and recycling practices differ substantially between countries but, broadly speaking,
industrialized countries have formal and often highly
automated waste management arrangements, while developing and emerging countries tend to rely more on
the informal sector, where many people are driven into
waste picking activities by poverty.
The European Union (EU) has been instrumental
in developing norms and mandates regarding a range of
Chapter 7: Recycling
waste, from packaging materials and tyres to electronics,
since the early 1990s and a series of directives –
Packaging (1994), Waste Communication Strategy
(1996), Landfills (1999), End of Life Vehicles (2000)
and Waste Electrical and Electronic Equipment
(WEEE) (2002) – have been implemented. Notable
also are the EU’s revised Waste Framework Directive and
Raw Materials Initiative (both 2008). The main
objectives of the WEEE Directive are waste prevention
and the promotion of reuse, recycling and other forms
of recovery. Closely related to the WEEE Directive,
the Restriction of Hazardous Substances (ROHS)
Directive bans the use of cadmium, mercury, lead,
hexavalent chromium and two brominated flameretardants: polybrominated diphenylethers (PBDEs)
and polybrominated biphenyls (PBBs).
A key aspect of these directives is the concept of extended producer responsibility (EPR), which is being
embraced in a number of different countries, including
countries in South America and Asia. By compelling
manufacturers to take back products at the end of their
useful life, EPR laws incentivize the design of cleaner,
safer products that allow easier separation and recovery
of materials.
The Basel Convention on the Control of
Transboundary Movements of Hazardous Wastes and
their Disposal, designed to reduce shipments of
hazardous waste across borders which came into force
in 1992, is also worth mentioning. The Convention also
calls for an overall reduction of waste generation and
has 177 signatories to date, of which only three –
Table 7.2
Afghanistan, Haiti and the United States – have not yet
ratified (Basel Convention Homepage, undated).
2. Market trends
While the lack of data makes it difficult to estimate with
any accuracy how much recycling is taking place – the
Bureau of International Recycling (BIR) estimates that
it is in excess of a billion tons, including metals, paper,
rubber, plastics, glass and other commodities (BIR,
2009) – it is clear that recycling rates vary enormously
from country to country. It is also clear that recycling
rates vary from one material to another and that the potential for recycling of even the most recyclable materials
goes largely unexploited. For example, although metals
are inherently recyclable, the extent of actual recycling
is limited. Many developing and emerging economies
still lack the appropriate laws, environmental awareness,
sufficient market infrastructure and institutional backup.
Recycling rates will be affected in part by the pattern
of each metal’s use. With regard to aluminium, for example, there is a fairly high rate of recycling, although
it can be further improved. However, in the case of many
other metals, such as gallium, indium and rare earth elements – especially those that are in rapidly rising
demand for modern products such as mobile phones,
solar panels or new types of batteries – almost no recycling takes place at all (table 7.2).
Metals’ end-of-life recycling rates
Recycling rate (%)
Elements
>50
18 elements: Aluminium, cobalt, chromium, copper, gold, iron, lead, manganese,
niobium, nickel, palladium, platinum, rhenium, rhodium, silver, tin, titanium,
and zinc
>25–50
3 elements: Magnesium, molybdenum, iridium
>10–25
3 elements: Tungsten, ruthenium, cadmium
1–10
2 elements: Mercury, antimony
<1
34 elements: Beryllium, gallium, indium, selenium, strontium, tantalum, germanium,
erbium, tellurium, hafnium, zirconium, thallium, vanadium, arsenic, barium, bismuth,
lithium, lanthanum, scandium, yttrium, europium, ytterbium, lutetium, cerium,
osmium, thulium, praseodymium, gadolinium, boron, neodymium, samarium,
terbium, dysprosium, holmium
Source: UNEP, 2011b.
113
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
B. Impacts of greening on
employment and incomes
US$33,000, recycling industry workers earned slightly
more than the national average (R.W. Beck, Inc., 2001).
The United States recovers only about one-third of its
municipal solid waste (MSW) stream and its construction
and demolition debris (which together amount to about
430 million tons annually) through recycling and composting. A Tellus Institute study examined the job
implications of reaching a 75 per cent recovery rate by
2030. On the basis of employment factors (2 jobs per
1,000 tons of recyclables processed and much higher job
numbers for reuse and remanufacturing of recycled materials) and assuming that the MSW stream would grow
at the rate of population growth, the study estimated a
total of 2.3 million direct jobs in the waste management
sector as a whole by 2030 (Tellus, 2011).
A study of the 27-member European Union (EU-27)
estimated direct and indirect employment in solid waste
management in 2004 at 980,000 jobs, while employment
relating to recycled materials accounted for another
800,000 (FOE-UK, 2010). A GHK Consulting study
published in 2007 estimated solid waste management and
recycling employment in the EU-27 to be close to 1.2 million direct and indirect jobs, with another 430,000 jobs
in recycled materials (GHK Consulting, 2007).
A study by the European Environment Agency (EEA)
found that turnover of seven main categories of recyclables
almost doubled between 2004 and 2008, to at least 60
billion euros (EEA, 2011). However, recycling rates across
Europe vary enormously, with northern parts of the continent generally far ahead of their counterparts in eastern
and southern Europe. Typically, less than 30 per cent of
materials in MSW are recovered in eastern and southeastern Europe (and less than 10 per cent in Poland and
Greece), compared with more than 50 per cent in Austria,
Belgium and Germany (EEA, 2007). It appears, therefore,
that there is still enormous employment potential in this
area.
While recycling is generally understood to entail the
collection, processing, manufacturing and reuse/remanufacturing of waste, there is no standard definition. This
makes comparison of the data on employment and incomes in recycling problematic, given that individual
studies may adopt more or less comprehensive definitions.
Meanwhile, it is clear that there are significant differences
between informal and formal sector recycling activities
and these differences need to be taken into account when
discussing the impact of greening on employment and
incomes.
114
1. Formal sector
With regard to the formal sector, the BIR – a federation
that represents more than 750 private companies and
40 national associations from more than 70 countries
– estimates that some 1.6 million people worldwide
are engaged in the recycling industry, with an annual
turnover of more than US$200 billion (BIR, undated).
However, data from US and European studies
suggest that the BIR figure may be a significant underestimate.
According to one US study, for example, 1.1 million
people were employed in direct recycling in 2001 in the
United States alone (table 7.3). The same study found that
direct and indirect jobs combined added up to 1.4 million,
while induced employment was estimated at 1.5 million.
Payroll amounted to almost US$37 billion for all direct
jobs and to US$52 billion including indirect employment.
The study also found that, at an average salary of close to
Table 7.3
Direct employment and payroll in the US recycling industry, 2001
Employees
(number)
Total payroll
(billion US$)
Payroll per worker
(US$)
Recycling collection
32,010
1.0
29,897
Recycling processing
160,865
3.8
23,786
Recycling manufacturing
759,746
29.2
38,410
Reuse and Remanufacturing
169,183
2.7
16,240
1,121,804
36.7
32,726
Total
Source: R.W. Beck, Inc., 2001
Chapter 7: Recycling
To project this potential in the EU-27 to 2020, Friends
of the Earth modelled a business-as-usual (BAU) scenario
with a 50 per cent average recycling rate, as well as a more
ambitious scenario with a 70 per cent recycling rate (FOEUK, 2010). Employment potential was calculated with
the help of jobs per ton coefficients, using conservative assumptions derived from UK and US studies. Under the
BAU scenario, EU recycling employment would remain
at roughly 1.2 million jobs. Under the more ambitious
scenario, the conservative estimates suggest that up to
322,000 direct jobs could be created, along with 161,000
indirect jobs, and 80,000 induced jobs, giving a total of
563,000 jobs. The largest number of jobs would be in iron
and steel and plastics recycling. Due to data limitations,
these estimates do not include opportunities for repair,
reuse and remanufacturing from additional valuable waste
streams, such as electronics.
Of course, those gains have to be set against losses in
brown activities, such as landfill and incineration to form
a comprehensive view of the effect of waste management
greening on employment, but unfortunately such calculations do not figure in the FOE study. The study does,
however, stress that the economic and employment benefits associated with sorting, reprocessing and recycling,
in comparison to incineration or disposal to landfill, are
documented in a number of UK and US studies.
Reviewing a range of studies, the FOE analysis offers a
conclusion consistent with the ILSR finding; namely that,
per ton of material, the processing and manufacturing of
recyclable materials provides approximately ten times
more jobs than do landfilling and incineration. Other US
studies have found that, for every 100 jobs created in recycling, 13 jobs are lost in solid waste and primary resource
Table 7.4
extraction (UNEP, 2011a). An EEA study also concluded
that recycling creates more jobs at higher incomes than
landfilling or incinerating waste (EEA, 2011).
Whether or not those jobs are of better quality is less
clear. While a number of US studies undertaken between
2001 and 2009 find that recycling jobs offer higher average
wages than are found in conventional waste disposal sectors, one 2009 report from the United States cautions that
there are wide variations in the quality of jobs at recycling
facilities (Mattera, 2009). By way of specific illustration,
it cites the cases of a San Francisco recycler and composter
offering among the highest wages and benefits in the industry and, in contrast, a low-paying private Los
Angeles-based company with a labour force predominantly comprised of non-union immigrants.
2. Informal sector
115
Whatever the exact number of people employed in formal
sector recycling may be, a far greater number are employed
in informal materials recovery in developing and emerging
economies where urban growth is typically rapid and unplanned and waste management inadequate or
non-existent. Much greater quantities of recyclable materials are recovered by informal waste pickers than by formal
waste management companies. The formal sector typically
focuses on collection and disposal and does not achieve
high recycling rates, whereas informal waste pickers’ livelihoods depend on extracting and selling valuable materials
from waste streams. This is clearly illustrated by a study
of six cities from four continents (table 7.4).
Comparison of materials recovery by the formal and informal sector, five cities1
Materials recovered
By formal sector
Informal sector
employment
(Recovered as
percentage of total
waste generated)
(1,000 tons)
Cairo, Egypt2
By informal sector
Formal sector
employment
(Jobs)
1,413
13
30
33,000
8,834
Lima, Peru
539
0.3
19
17,643
13,777
Quezon, Philippines
157
2
23
10,105
5,591
Pune, India
118
0
22
8,850
4,545
24
5
8
3,226
330
Cluj, Romania
The five cities have a combined population of about 21 million, with 73,000 informal sector waste pickers plus 33,000 formal waste sector workers.
The figure of 33,000 informal recyclers in Cairo is much smaller than estimates elsewhere in the literature. Medina (undated) for instance, offers a figure
as high as 60,000.
Source: CWG and GIZ, 2011.
1
2
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
116
It is perhaps not surprising, then, that informal waste
pickers often generate a net economic benefit for the municipalities where they work. In the five cities listed in
table 7.4, revenues from materials recovered by the informal sector exceed costs in all cases except in Lusaka –
by US$150 per ton in Cluj, US$125 in Cairo, US$71 in
Quezon, US$64 in Pune and US$11 in Lima – while the
cost savings for municipalities are estimated to amount to
US$794 annually per informal waste picker in all six cities
(CWG and GIZ, 2011). These savings are equivalent to
about US$2 per day per waste picker. Needless to say, such
estimates are at best only indicative, given the nature of
the informal sector, and this should be kept in mind with
regard to all jobs and livelihood figures cited in this
chapter.
An oft-cited estimate by the World Bank puts the
number of informal waste pickers at 1 per cent of the urban
population in developing countries, which translates into
roughly 26 million people at current population numbers.
This may well be an overestimate. The cities in table 7.4,
for example, suggest a lower share of urban population
(some 0.4 to 0.5 per cent) while a figure of 15 million
people is sometimes cited in the literature (Bonner, 2008).
There is very little reliable statistical information and the
numbers probably fluctuate in line with overall economic
conditions. A range of 15–20 million informal waste
pickers and recyclers worldwide appears to be a reasonable
estimate. Table 7.5 offers estimates for selected cities.
Table 7.5
China may well have the largest number of waste
pickers, estimated at more than 10 million people,
including 6 million migrant workers that toil under particularly poor work conditions (IUE and CASS, 2010).
Fewer than 1 million people are formally employed in
the processing of waste materials (ILS and MOHRSS,
2010). In India, the Alliance of Indian Wastepickers and
the Chintan Environmental Research and Action Group
both estimate that there are some 1.5 million informal
waste pickers (AIW, 2010; Chintan, undated). Chintan
director Bharati Chaturvedi thinks that the number
could possibly be as high as 2 million (Chaturvedi, 2012).
For Latin America, the Inter-American Development
Bank (IADB) estimates that more than 4 million people
live on income earned from the collection of recyclables
(IADB, 2011). In Brazil, a survey conducted by the
Brazilian Institute of Geography and Statistics suggested
a figure of about 230,000 waste pickers (Budlender,
2009), but did not capture informal workers living in the
streets or on open dumps (Dias, 2011b). The AVINA
Foundation for Sustainable Development in Latin
America offers a much higher estimate of 800,000 people
(AVINA, 2010a). In Chile, estimates range from 60,000
to 100,000 recyclers, with perhaps as many as 180,000
people living on income derived from waste picking and
recycling (Mesa, 2011).
The picture is less clear in Africa and marked by data
gaps and uncertainties. Limited information is available
Number of waste pickers in selected developing country cities
City
Estimated number of waste pickers
Delhi
One per cent of the population, or over 150,000 people, depend directly on recycling for a livelihood.
Mumbai
More than 30,000 waste pickers have created more than 400 micro-enterprises that process waste materials and make
consumer products from them. The economic impact of these activities is an estimated US$650 million–1 billion per year.
Calcutta
As many as 20,000 waste pickers live and work in the city’s municipal dumps.
Jakarta
A total of 37,000 waste pickers recover 25 per cent of the city’s waste, saving the city US$300,000 a month and producing
an economic impact of more than US$50 million a year.
Dhaka
As many as 120,000 people work in an informal recycling trade chain, recovering 15 per cent of the total waste in Dhaka
(475 tons per day – mostly food waste).
Mexico City
A total of 15,000 waste pickers live and work in the city.
Buenos Aires More than 40,000 waste pickers live in the city (with an economic impact estimated at US$178 million a year), according
to Medina (2008), but just 9,000 cartoneros, according to a 2007 study (Schamber et al., 2007).
Bogotá
The city is home to 18,000 recicladores.
Montevideo
Some 15,000 clasificadores live and work in the city.
Sources: SNDT Women’s University and Chintan, 2008; Medina, 2011; Medina, 2008; Maqsood Sinha, 2006; Schamber et al., 2007; WIEGO, undated-a.
Chapter 7: Recycling
on individual municipalities rather than on the broader
national, or even continent-wide, situation. For example,
following the failure of public-sector solid waste collection in Tanzania’s capital Dar es Salaam, the city council,
with support from ILO and others, awarded contracts to
some 50 micro-enterprises in a process that is seen as a
model for other cities that are struggling with similar
waste management problems. Still, many of the enterprises remain weak with high firm turnover. Some 40 per
cent of municipal waste is currently being collected, and
more than 2,000 direct jobs have been created, held primarily by poor women and men, although child labour
still exists in collection and scavenging activities
(ILO, 2006).
Worldwide, the mid-point between the above-cited
estimates of 15 and 26 million waste pickers is about
20 million, and the estimates for China, India and Latin
America suggest that this figure may well be on target for
global informal employment. The number employed in
formal recycling employment is clearly much smaller, perhaps in the order of 4 million, based on data for Europe
and the United States, as well as on the number of formal
jobs in China. Accelerating urbanization in Africa and
South Asia, along with growing amounts of recyclable
material, are likely to increase future employment in this
sector.
C. Organization, inclusion
and formalization
Arguably, at least four main categories of informal waste
recycling can be identified (Wilson et al., 2006):
● itinerant waste buyers who go door to door to collect
waste materials;
● street waste pickers recovering secondary raw materials
from mixed waste in the streets or communal bins;
● municipal waste collectors who recover secondary raw
materials from vehicles transporting municipal solid
waste to disposal sites;
● waste pickers who live in shacks on or near dumps.
One of the greatest challenges faced by workers engaged
in informal materials recovery – especially those working
directly in waste dumps – is hazardous work conditions.
Working without any kind of protection, waste pickers
are exposed to a range of toxins and microbial or parasitic
infections. In addition, earnings are often low and unstable. To make matters worse, municipal governments all
too often regard waste pickers as a nuisance, and may even
harass or persecute them (Sampson, 2009a). Nowhere else
in the economy is there a greater need for policy initiatives
to promote some degree of formalization offering health
and safety benefits and proper training (ILO, 2011).
Informal sector recycling is often carried out by individuals or family groups, but micro- and small enterprises,
typically involving groups of up to 10 or 20 people, exist
as well, providing primary collection and processing of
collected materials into intermediate or final products.
Individual waste pickers are the most vulnerable, lacking
any support network and having only limited capacity for
processing or storing materials. Family networks reduce
such vulnerability to some degree. Organizing informal
recyclers into micro- or small enterprises or forming picker
cooperatives can improve their position (Wilson et al.,
2006).
The number of cooperatives, unions and self-help
groups has exploded in recent years and waste pickers are
becoming more organized when fighting for legalization,
improvements in status and better bargaining positions
vis-à-vis municipalities and predatory middlemen
(Medina, 2008). Efforts are also being made to form national and international networks. In March 2008, the
First World Conference of Waste Pickers in Bogotá
brought together representatives from more than 30 countries to share experiences (Sampson, 2009a).
The Bogotá Conference also marked the third gathering of the Latin American Waste Pickers Network,
which was itself founded in 2005. Latin America’s waste
picker cooperatives have taken a lead on these issues,
achieving considerable involvement in municipal solid
waste management. Brazil and Colombia have firmly established national movements (Bonner, 2008); Brazil
having a long tradition of recycling, notably of aluminium cans, polyethylene bottles, paper and glass.
Waste pickers in Brazil recover 90 per cent of recyclables
(ILO, 2011) and are backed by supportive legislation
(box 7.1). The Brazilian experience serves as an inspiring
example of coherence between environmental and social
policies, which is essential if sustainable development is
to be advanced.
In Colombia too, progress has been made, notably with
a 1999 law supporting a housing programme and health
benefits for recyclers (Chintan, 2007) and an April 2009
ruling by Colombia’s Constitutional Court, which recognized the country’s waste pickers as entrepreneurs, and
117
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Box 7.1 Organization and integration of waste pickers in Brazil
Founded in 2001, the Movimento Nacional dos Catadores de Materiais Recicláveis (MNCR), is the world’s largest
national waste pickers movement, affiliating over 500 cooperatives, representing the interests of about 60,000
waste pickers whose income is three to five times higher than that of unorganized waste pickers. Still, the majority
of Brazil’s waste pickers continue to face poor working conditions, and many resist formal organization.
Since the 1980s, local-level organizing efforts and legislation in a growing number of Brazilian cities have facilitated
municipal partnerships that recognize the role of waste-pickers and, today, of the 325 municipalities with source
segregation schemes, 44 per cent deal directly with waste pickers organizations.
During the past decade, there has also been progress at the national level:
118
•
2001: Federal legislation recognized waste picking as a legitimate occupation.
•
2007: Legislation was enacted to allow municipalities to hire waste-picker organizations.
•
2009: The “Cata-Ação” project was launched in five Brazilian cities, offering professional training and
socio-economic integration assistance to waste pickers.
•
2009: A US$125 million credit line was established from Brazil’s National Bank for Economic and Social
evelopment to waste-picker organizations.
•
2010: The National Policy of Solid Waste law was approved, mandating that informal recyclers be included
in municipal recycling programmes and promoting cooperatives. The MNCR expects that the law will lead to
an increase in the average income of waste collectors, which is currently close to the minimum wage of
US$250 per month.
•
2011: Under the comprehensive national poverty eradication plan (Brasil Sem Miséria) launched in June
2011, training will be provided to 60,000 waste pickers by 2014, and infrastructure support will be
extended to 280,000 pickers. The goal is to formalize 250,000 work positions by integrating them more
effectively into recycling programmes, improving working conditions and boosting socio-economic inclusion
in 260 municipalities.
Brazil has also managed to reduce child labour in waste picking: 47,000 children have left the dumps as a result
of the Bolsa Família national programme that pays a monthly stipend to parents subject to their sending their
children to school and having them vaccinated.
Sources: Medina, 2008; Medina, undated; Dias, 2011a; Dias and Alves, 2008; AVINA, 2009a; AVINA, 2010a.
voided a contract for private collection that had cut off
their access to a landfill site in Cali (Khullar, 2009).
Colombia may have as many as 300,000 waste pickers and
more than 100 cooperatives representing some 10,000
waste picker families (Medina, undated). In the capital,
the Asociación de Recicladores de Bogotá, formed in
1990, brings together 24 cooperatives which provide services to 10 per cent of the city under a 3-year agreement
with the municipality.
National associations also exist in Argentina, Chile,
Ecuador, Peru and Uruguay (Medina, 2008). Organizing
waste pickers is still a relatively recent phenomenon in
Peru, and in Lima only 7 per cent of informal sector
workers are members of an association, cooperative or
other representative structure (CWG and GIZ, 2011).
However, since late 2009, Peruvian law offers waste pickers
formal status and a path towards integration into the
country’s formal solid waste management systems
(AVINA, 2009b). In Buenos Aires, the decision was taken
in 2010 to make cooperatives responsible for the collection
of recyclable waste (AVINA, 2010b). The 2005 Zero
Waste Act, which bans landfilling of recyclable and compostable waste by 2020, was also an important factor
(AVINA, 2010b; Goldstein, 2008). In Chile, there are
still few examples of municipalities that explicitly include
recyclers in waste management, but a draft waste management law will offer an opportunity for more inclusive
policies (Mesa, 2011). In the port city of Antofagasta, the
municipality’s efforts to close the dump of La Chimba due
to dangerous health and safety conditions triggered resistance from waste pickers who organized themselves into
the Sindicato de Chimba in order to overcome discrimination and gain recognition. Discussions continue on how
to integrate the waste pickers, and a plan to provide
training to pickers has been approved and was awaiting
implementation as of 2011 (Mesa, 2011).
Working with a network of grassroots organizations
in 15 Latin American countries, AVINA has provided
support to waste pickers since 2006. Together with the
IADB and other financial backers, AVINA launched a
US$8.4 million regional programme in May 2011 to improve the socio-economic status of waste pickers and
Chapter 7: Recycling
integrate them into the formal recycling market through
better regulatory frameworks and improved access. The
initiative brings together recyclers, consumer products
companies, municipalities, educational institutions and
civil society organizations to discuss proposals and develop
action plans for incorporating informal workers into local
value chains.
Outside Latin America, waste-picker organizations
are generally less developed. Community-level cooperatives and associations exist in African countries, but there
is still little organization beyond the local level (Bonner,
2008). In South Africa, waste pickers are beginning to
organize at the municipal level, and the national-level
South African Waste Pickers Association held its first
meeting in July 2009 (WIEGO, undated-a). In the
Philippines, the NGO Linis Ganda has worked for more
than 20 years in support of the informal waste sector.
One of its programmes employs 1,500 former waste
pickers in Metro Manila (Medina, undated). In Quezon
City, some 37 per cent of waste pickers are organized
(CWG and GIZ, 2011).
In India, the Alliance of Indian Wastepickers represents 35 local organizations in 22 cities (WIEGO,
undated-a). However, only a small percentage of the
country’s waste pickers are organized in unions, cooperatives or other self-help groups (Bonner, 2008). The
Self-Employed Women’s Association (SEWA) represents
a large number of trades, including waste pickers, while
the SWACHH National Alliance of Waste Pickers, India,
formed in 2005, has grown to encompass 24 member organizations (Sampson, 2009b). The Indian Government
has recognized waste pickers and informal recycling with
the National Environment Policy of 2006, via the
National Action Plan on Climate Change (2009), and
laws on plastics and e-waste management (2011)
(Chintan, undated).
Increased organization and integration into municipal
waste management operations typically result in better
earnings, coupled with improvements in work conditions
and social welfare, and helps to affirm waste pickers’ sense
of their own worth.
In Latin America and elsewhere, the past two decades
have seen progress in terms of growing legal recognition
of waste pickers, strengthening of their organizations, integration into municipal waste management systems and
social inclusion. This has resulted in improvements in
earnings and has secured some social benefits (box 7.2).
Gender-based wage discrimination seems to be as
much a part of informal waste picking as it is of other
professions. Women constitute a significant portion of
the workforce, and are more likely to belong to wastepicker organizations than men. They work as pickers,
sorters, traders and initiators of waste-related community
enterprises, but tend to be concentrated in lower-earning
Box 7.2 Improvements in earnings and social benefits
Organization and integration of waste pickers into municipal waste management systems typically yields considerable
benefits with regard to earnings (amount earned and stability of income) along with improvements in work conditions
and social welfare (access to health insurance, credit and housing benefits, for instance).
Worldwide, waste pickers’ earnings vary widely, depending on the country and specific locality, the type of work
(from waste picking in dumps to door-to-door collection or sorting and recycling activities). A CWG-GIZ study of cities
worldwide found that informal waste pickers’ earnings exceed legal minimum wage levels by anywhere from
110 per cent to 240 per cent in the cities of Pune, Lima and Cluj.
In Santa Cruz, Bolivia, more than half of all waste pickers earn below the minimum wage. In Brazil, by contrast,
according to Medina (2008), 34 per cent of waste pickers earn between 1 and 1.5 times the minimum wage,
29 per cent between 1.5 and 2 times; 18 per cent between 2 and 3 times; and 7 per cent between 3 and 4 times
the minimum wage. Studies in a number of Mexican cities similarly found that informal waste collectors earn 5 to
7 times the minimum wage (Medina, undated). Chilean recyclers receive anywhere between 0.5 and 3 times the
minimum monthly wage, but they do not benefit from social security systems and lack adequate health-care coverage
(Mesa, 2011).
Formalization has brought some progress with regard to social benefits. More than 90 per cent of waste pickers
surveyed in six Latin American countries responded that they considered their occupation to constitute decent work.
In Brazil, waste pickers have access to the National Health System (as do all Brazilians), but no more than onetenth of them earn enough to be able to pay into the national pension scheme. In India, the Pune city authorities
are providing identity cards and health insurance for waste pickers in a city-wide initiative. In the Philippines, informal
workers, including waste pickers, receive assistance from the Comprehensive Integrated Delivery of Social Services.
Sources: CWG and GIZ, 2011; WIEGO, undated-a; WIEGO, undated-c; Medina, 2008; Mesa, 2011.
119
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
120
activities, and are often paid lower rates than men even
for equivalent work (CWG and GIZ, 2011; Bonner,
2008; WIEGO, undated-a).
In Dar es Salaam, women remain among the most
vulnerable of waste collectors but, for many of them, these
jobs are the only income-generating option available.
Female vulnerability is pronounced because their access
to education is very limited, and half of them are divorced,
separated or widowed, with many having to care for dependants. ILO data for 2003 indicate that for two-thirds
of the women, waste collection is their first paid job (as
compared with a 30 per cent rate for men) and, for 92
per cent of those survey, waste picking is the only source
of work available. Few women manage a waste collection
enterprise. The average monthly income from waste collection was US$38 for men and US$32 for women; this
compares with the Tanzanian minimum wage of US$45
(ILO, 2006).
Brazilian data indicate that two-thirds of all waste
pickers are men and one-third are women but, in formal
waste picking, women represent only 20 per cent of the
workforce and typically earn far less than men. Among
Brazilian waste pickers earning anywhere from 3 to 10
times the minimum wage, just 2–6 per cent are female,
and none is included in the highest income groups that
earn 10 times the minimum wage or more (WIEGO, undated-d). In Chile, roughly 60 per cent of the pickers are
women, but their earnings are lower than men’s (Mesa,
2011). Child labour is, of course, a matter of great concern
and children are an important component of the labour
force in informal waste collection in many countries.
Brazil’s achievements with the Bolsa Família programme,
which has been credited with getting 47,000 children out
of waste picking and into school, offer a way to resist this
unacceptable situation.
D. Challenges
As this section shows, the challenges faced by waste pickers
are many and varied, for the most part stemming from the
informal nature of the work in the majority of settings.
But two emerging challenges are particularly pertinent:
first, moves towards waste management privatization are
threatening to sideline pickers and undermine recycling
efforts (Bonner, 2008; Sampson, 2009b).
In Delhi, for example, after contracts were awarded to
private companies in 2005 by the Municipal Corporation
of Delhi (MCD), recycling rates plunged. The contractors
were required to segregate no more than 20 per cent of
the waste by the eighth and final year of the contract.
Furthermore, the payment structure – based on the weight
of materials delivered to landfill sites – proved a powerful
disincentive to the sorting of waste. Roughly half the waste
pickers either lost their jobs or suffered a reduction in income, forcing many to move to areas of the city not covered
by private contracts. Ultimately, mobilization efforts
helped to bring about a modification of the privatization
programme that gave waste pickers control over the dhalaos
(waste transfer stations) (SNDT Women’s University and
Chintan, 2008; Sampson, 2009b).
In Cairo, tens of thousands of waste pickers known as
Zabaleen have, for decades, played a critical role in providing door-to-door waste collection and recovery services
(CWG and GIZ, 2011). When city authorities awarded
contracts to Italian and Spanish companies in 2003, they
only required the companies to recycle 20 per cent of the
waste, far below the 80 per cent achieved by the Zabaleen.
The Zabaleen continue to divert and segregate waste for
recycling, nominally in breach of the city’s contract with
the private companies, so that the waste pickers could at
any moment be denied access to recyclable materials
(Sampson, 2009b).
A second major challenge faced by waste pickers is the
emergence of new waste streams – particularly e-waste –
that expose them to new occupational and health risks and
demand a degree of specialist knowledge to safely dismantle electric and electronic waste products.
An estimated 20–50 million tons of e-waste are disposed of each year worldwide (UNEP, 2011a), a large
proportion of which is exported to countries such as China
and India for dismantling. The manner in which the discards are typically handled poses a serious threat to health,
but regulations are difficult to enforce in the often anarchic
setting of small, family workshops and other informal
structures where labour turnover tends to be high and businesses are reliant on migrant labour.
A study by the German Öko Institut estimated that
770,000 people were working in China’s electronics recycling industry, of whom 98 per cent were thought to be
in the informal sector (Manhart, 2007). India, too, generates growing amounts of domestic e-waste and imports
huge additional quantities. The annual volume was estimated at 330,000 metric tons in 2007 and projected to
grow to 470,000 tons by 2011. While large amounts of
computer and other equipment are refurbished, some 40
per cent of the discarded items sit idle in homes, offices or
warehouses. Only 19,000 tons are recycled, and about 95
per cent of the dismantling is done in the informal sector
(Business Standard, 2011). Family enterprises dominate
Chapter 7: Recycling
Box 7.3 WEEE Recycle in India
Under the WEEE Recycle project, efforts have been directed at improving the channels by which e-waste moves,
generating a system of accountability in e-waste management, building capacity and ensuring environmental and
legal compliance. So far, the project has helped to set up recycling associations in Delhi and Bangalore, bringing
together traders, dismantlers, engineers and small and medium-sized enterprises (SMEs). Among the objectives is
a revival of take-back systems for electrical and electronic equipment, which have not been functioning effectively,
and extending refurbishment efforts.
WEEE Recycle assists informal recyclers in upgrading and formalizing their business and developing backward and
forward linkages with electronics manufacturers, consumers and formal recyclers. The project is working to introduce
“best affordable technologies” and to train informal recyclers according to accepted “best practices”.
Source: WEEE Recycle Homepage, undated.
the sector, awareness of occupational and health issues is
low and safety equipment is rather the exception than the
rule (Spies and Wehenpohl, 2006).
India’s Ministry of Environment and Forests issued
new rules which came into effect in May 2012, requiring
manufacturers to establish e-waste collection centres or
introduce “take back” systems (WEEE Recycle
Homepage; Business Standard, 2011). Meanwhile,
Germany’s GIZ is the lead agency for WEEE Recycle, a
project co-financed by the European Commission and the
German Federal Ministry for Economic Cooperation and
Development BMZ, and promotes the formalization of
e-waste dismantling and recycling activities in four target
cities: Delhi, Kolkata, Pune and Bangalore (box 7.3).
E. Conclusions and way forward
Recycling offers one of the most promising responses to
the challenge posed by increasing waste generation and
one of the best options for reducing the environmental
footprint of energy- and resource-intensive industries. The
employment potential is likely to rise in industrialized and
developing countries alike. For instance, an additional 1.8
million direct jobs over the next one to two decades could
be created in the European Union and the United States
alone by increasing recycling rates to 70–75 per cent. In
general, the employment potential is particularly strong
in countries whose recycling rates are currently low, such
as eastern and southern European countries but also in
developing countries, notably in Africa.
However, the potential for recycling remains largely
untapped. It is therefore imperative that governments do
more to promote and support recycling efforts. Recycling
is not only good for the environment, it also permits the
recovery of valuable materials that would otherwise be lost
and can lead to a significant net increase in jobs.
Policies that successfully boost recycling and reuse of
materials will inevitably have repercussions in other industries, such as extractive industries or indeed landfill and
waste incineration. But it should be borne in mind that
these industries are not only costly in environmental terms,
they are also far less labour intensive.
Moreover, an expanded recycling economy could accelerate job losses that are occurring in resource extraction
industries due to mechanization and economies of scale.
However, this chapter has also shown the degree to
which materials recovery, at the global level, is in most instances an informal activity associated with unsafe working
conditions. Recycling will only become a truly green activity if the sector can be formalized in ways that provide
decent jobs for its workers. Governments must therefore
step up their efforts to improve overall working conditions
for informal waste management workers. It is also imperative that governments work closely with these workers.
The experience of Latin America in this regard is particularly useful, showing that working with community and
waste picker organizations is infinitely preferable to
sidelining them through ill-conceived and counter-productive privatization efforts that fail to take local realities
into account.
As emerging economies and developing countries are
struggling to deal with an escalating waste problem, formalized waste management and recycling built around
traditional waste pickers and recyclers present a major opportunity for social inclusion. As the Chintan
Environmental Research and Action Group in India
points out, it is not enough to construct merely technical
pathways towards greater recycling. Moreover, a more inclusive, formalized industry generates benefits for workers,
121
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
for development, for local governments and for the wider
economy. Indeed, more efficient recycling is not necessarily achieved through greater mechanization – what is
needed is a more comprehensive approach. The experience
in Brazil suggests that necessary policies include legal
recognition, local and national organization, entrepre-
122
neurial development, municipal government contracts
and facilities (sorting stations), modern recycling methods,
skills training and occupational safety and health instructions, as well as measures to prevent and discourage child
labour.
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—. 2010b. Buenos Aires formalizes recyclers as employees of the municipal waste management system.
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—. 2009a. Brazilian President Launches the “CataAção” Program. Available at:
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en-US/Default.aspx [27 Apr. 2012].
Bonner, C. 2008.“ Waste pickers without frontiers”, in South African Labour Bulletin, Vol. 32, No. 4,
pp. 7–9.
Budlender, D. 2009. Informal economy budget analysis in Brazil and Belo Horizonte. WIEGO
Urban Policies Budget Briefing Note, No. 1. October.
Bureau of International Recycling (BIR). 2009. Once upon a time … The story of BIR, 1948–2008.
Available at: http://www.bir.org/assets/Documents/publications/brochures/BIRthday.pdf [27
Apr. 2012].
—. Undated. Recycled materials supply 40% of the global raw material needs. Available at:
http://www.bir.org/industry/ [27 Apr. 2012].
Business Standard (India). 2011. India gets first e-waste management rules, 9 June.
Chaturvedi, B. 2012. Personal communication, 16 Apr. 2012.
Chintan Environmental Research and Action Group (Chintan). 2007. Wasting our local resources:
The need for inclusive waste management policy in India (New Delhi).
—. Undated. Who recycles your waste? Factsheet (New Delhi).
Collaborative Working Group on Solid Waste Management in Low- and Middle-income Countries
(CWG) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). 2011.
The economics of the informal sector in solid waste management, Apr. (St Gallen and Eschborn).
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Dias, S.M. 2011a. “Overview of the legal framework for inclusion of informal recyclers in solid
waste management in Brazil”, in WIEGO Urban Policies Briefing Note, No. 8, May.
—. 2011b. Women in informal employment: Globalizing and organizing. Personal communication,
23 Sep. 2011.
—.; Alves, F.C.G. 2008. Integration of the informal recycling sector in solid waste management in
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European Environment Agency (EEA). 2011. Earnings, jobs and innovation: The role of recycling in a
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—. 2007. Use of landfilling, incineration and material recovery as treatment options in 2004.
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Friends of the Earth UK (FOE-UK). 2010. More jobs, less waste (London).
Goldstein, N. 2008. Zero waste in Buenos Aires (Argentina), BioCycle. June. Retrieved from
http://www.biocycle.net/2008/06/zero-waste-in-buenos-aires-argentina/.
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European Commission, DG Environment, 6 Nov. (London).
Institute for Local Self-Reliance (ILSR). Undated. Recycling means business. Available at:
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http://www.ilsr.org/recycling/recyclingmeansbusiness.html [27 Apr. 2012].
Institute for Urban and Environmental Studies (IUES) and Chinese Academy of Social Sciences
(CASS). 2010. Study on low carbon development and green employment in China, Apr. (Beijing,
ILO Office for China and Mongolia).
Inter-American Development Bank (IADB). 2011. Program to bring collectors of recyclable materials
into the formal market is launched with $8.4 million. Press release (Asuncion, Paraguay).
International Institute for Labour Studies (IILS) and Chinese Ministry of Human Resources and
Social Security (MOHRSS). 2010. Study on green employment in China, March (Beijing, ILO
Office for China and Mongolia).
International Labour Organization (ILO). 2011. “Promoting decent work in a green economy”,
background note to UNEP, Towards a green economy: Pathways to sustainable development and
poverty eradication (Geneva).
—. 2006. Employment creation in municipal service delivery in Eastern Africa: Improving living
conditions and providing jobs for the poor, Sep. 2003 – Dec. 2005 (Dar es Salaam).
Khullar, M. 2009. “Surviving on scrap”, in Scrap, Sep./Oct.
Manhart, A. 2007. Key social impacts of electronics production and WEEE-recycling in China
(Freiburg, Germany, Öko-Institut).
Maqsood Sinha, A.H.Md. 2006. “Community based solid waste management through public–
private-community partnerships: Experience of waste concern in Bangladesh”, Presentation at 3R
South Asia Expert Workshop, Kathmandu, Nepal, 30 Aug. Available at:
http://www.iges.or.jp/en/ltp/pdf/activity08/09_sinha.pdf [27 Apr. 2012].
Mattera, P. 2009. High road or low road? Job quality in the new green economy (Washington, DC,
Good Jobs First).
Medina, M. 2011. Informal recycling around the world: Waste collectors, 16 Mar. Available at:
http://www.trunity.net/medina2/news/view/164522/ [27 Apr. 2012].
—. 2008. “The informal recycling sector in developing countries,” in Gridlines, Note 44, Oct.
—. Undated. “Waste pickers in developing countries: Challenges and opportunities”, PowerPoint
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Mesa Para La Inclusión De Los Recicladores De Base (Mesa). 2011. Políticas públicas para la
inclusión de los recicladores de base al sistema de gestión de residuos sólidos domiciliarios en Chile.
Working Document, April (Santiago de Chile).
—. Undated. Recicladores en Latinoamérica (in Spanish). Available at:
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[27 Apr. 2012].
R.W. Beck, Inc. 2001. U.S. recycling economic information study, July (Washington, DC, National
Recycling Coalition).
Sampson, M. 2009a. “Introduction”, in M. Samson (ed.): Refusing to be cast aside: Waste pickers
organising around the world (Cambridge, MA, Women in Informal Employment: Globalizing
and Organizing (WIEGO)), pp. 1–3.
—. 2009b. “Confronting and engaging privatisation”, in M. Samson (ed.): Refusing to be cast aside:
Waste pickers organising around the world (Cambridge, MA, Women in Informal Employment:
Globalizing and Organizing (WIEGO)), pp. 75–82.
Schamber, P.; Suárez, F.; Valdés, E. (eds). 2007. Recicloscopio: Miradas sobre recuperadores urbanos de
residuos de América Latina (Buenos Aires, Prometeo Libros).
SNDT Womens’ University and Chintan Environmental Research and Action Group (Chintan).
2008. Recycling livelihoods. Integration of the informal recycling sector in solid waste management
in India (Berlin, GTZ).
Spies, S.; Wehenpohl, G. 2006. The informal sector in solid waste management: Efficient part of
a system or marginal and disturbing way of survival for the poor?, CWG Paper No. 35, Feb.
Tellus Institute. 2011. More jobs, less pollution: Growing the recycling economy in the U.S. (Boston).
United Nations Environmental Programme (UNEP). 2011a. Towards a green economy: Pathways to
sustainable development and poverty eradication (Nairobi).
—. 2011b. Recycling rates of metals: A status report, May (Nairobi).
—. 2011c. Assessing mineral resources in society: Metal stocks and recycling rates (Nairobi).
WEEE Recycle. Home page. Available at: http://www.weeerecycle.in/ [27 Apr. 2012].
WIEGO. Undated-a. Waste pickers. Available at:
http://wiego.org/informal-economy/occupationalgroups/waste-pickers [27 Apr. 2012].
—. Undated-b. Waste pickers and solid waste management. Available at:
http://wiego.org/informaleconomy/waste-pickers-solid-waste-management [27 Apr. 2012].
—. Undated-c. Laws and policies beneficial to waste pickers. Available at:
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—. Undated-d. Informal workers in focus: Waste pickers in Brazil. Available at:
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[27 Apr. 2012].
Wilson, D.; Velis, C.; Cheeseman, C. 2006. “Role of informal sector recycling in waste management
in developing countries”, in Habitat International, Vol. 30, Issue 4, Dec., pp. 797–808.
125
Chapter 8
Buildings
Main findings
● Of all the elements that constitute society, buildings are
the biggest consumers of energy and the largest emitters
of greenhouse gases. Yet, the building sector also has the
highest potential for improving energy efficiency and
reducing emissions. Many investments in resource-efficient buildings are cost effective and the large stocks
of older and inefficient buildings, notably in industrialized countries, mean that placing greater emphasis on
renovation could yield substantial environmental benefits. For emerging economies and developing countries, leap-frogging directly to high-performance new
buildings will avoid a legacy of high energy, water and
resource consumption which will endure for decades.
And, with more than 110 million construction workers
employed worldwide, the renovation of existing and the
construction of new energy-efficient buildings also represent large potential employment benefits.
● With respect to renovation, public policies are needed
to overcome the opposing motivations that exist between tenants who incur recurrent energy expenditures
and owners who are required to make the necessary investments. A policy mix of building standards, credit
and incentives as well as intermediaries such as Energy
Service Companies, can boost green building activity,
with public finance crowding in private investment.
● These investments can have a strong immediate effect
on employment generation in the construction sector
and its suppliers. Moreover, savings from improved efficiency will be channelled back into the economy with
important multiplier effects on economic activity, employment creation and income generation. For example, the large-scale renovation programme for energy
efficiency in Germany has mobilized investments of almost €100 billion since 2006. It directly maintained as
many as 300,000 jobs in the building industry. The
programme is also notable for the fact that it was initiated jointly by trade unions, employers and nongovernmental organizations (NGOs) – a cooperative
model rooted in social dialogue.
● In addition, energy- and resource-efficient social housing has the potential to improve living standards and
shield poor households from rising energy prices, while
avoiding costly investments in power-generation capacity. This is demonstrated by the programme My House,
My Life for low-income families in Brazil, which contains an element of green building activity. In particular,
as part of the Government’s poverty eradication strategy, 300,000 houses are being equipped with solar
water-heaters, which will save families 40 per cent on
their energy bills. The programme is also expected to
create 30,000 additional jobs related to the manufacturing and installation of the equipment.
● Experience in a growing number of countries, both industrialized and developing, demonstrates that the
construction of energy- and resource-efficient buildings requires competent enterprises and a skilled workforce. Poorly installed equipment and materials do not
yield expected gains in efficiency and emissions reduction. Targeted investments in skills upgrading and certification of building firms, formalization – notably of
small and medium-sized enterprises (SMEs) which
dominate the sector – and improvements in working
conditions to retain qualified workers are therefore essential components of a successful strategy.
127
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Introduction
128
Buildings are heavy consumers of energy, water and other
natural resources (UNEP, 2011). They account for approximately one-third of global energy end-use (IEA,
2010a) and for nearly 60 per cent of the world’s electricity
usage, although this varies widely according to geographical location, climate and consumption patterns (IEA,
2009b). Largely driven by the rapid expansion of
emerging economies, notably China, energy demand in
construction is set to increase by 60 per cent by 2050.
Buildings contribute as much as one-third of total global
greenhouse gas (GHG) emissions but building-sector
carbon emissions must be drastically reduced from the
15.2 gigatonnes (Gt) per year currently projected for
2050 to approximately 2.6 Gt per year as part of a strategy
to successfully address climate change (IEA and OECD,
2010). The building sector does have the largest potential
of any sector to deliver long-term, significant and costeffective GHG reductions (IPCC, 2007). Proven and
commercially available technologies exist to cut energy
consumption by an estimated 30 to 80 per cent in both
new and existing buildings (UNEP, 2009). The global
economic downturn has encouraged a greater focus on
cost savings through efficient resource use, in both developed and emerging countries (McGraw Hill, 2009).
The construction industry accounts for 5–10 per
cent of employment in most national economies and is
estimated to employ over 111 million people directly
worldwide (UNEP SBCI, 2007; ILO, 2001). The actual
figure is likely to be much higher, as many construction
workers are informally employed and therefore do not
figure in official statistics. In the European Union (EU),
Japan and the United States combined, the industry employs more than 40 million people (OECD, 2008). In
OECD countries the sector is overwhelmingly made up
of small firms with fewer than 20 employees, and in developing countries 90 per cent of jobs are in firms of less
than 10 employees (Kievani et al., 2008).
Key drivers of growth in the sector in the developing
world today are population growth, economic growth
and urbanization. Of at least 9 billion people predicted
to live on the planet in 2050, 70 per cent are expected
to reside in urban areas (UN-HABITAT, 2010). While
greater use of multi-family living may offer opportunities
for more efficient resource use, growing per capita income levels in industrializing countries tend to be
accompanied by a decrease in the size of urban households. Developing countries face a growing housing
shortage, accompanied by an expansion in informal and
low-cost housing. This raises a variety of concerns, in-
cluding risks associated with standards of housing provision, health and safety.
A. Greening the building sector
Based on 80 studies spanning 36 countries, the IPCC
(2007) concluded that a 29 per cent reduction in projected baseline emissions by 2020 is achievable at zero
cost, while further improvements could be made with relatively low levels of investment. Indeed, several studies
have indicated that investment in greening may actually
give rise to savings. The International Energy Agency’s
(IEA) 2009 World Energy Outlook, for example, estimates that a US$2.5 trillion additional investment in
green buildings globally between 2010 and 2030 would
yield US$5 trillion in energy savings over the life of the
investment.
A better grasp of exactly how a building impacts the
environment is being achieved through consideration of
comprehensive life-cycle approaches. A new generation
of green building guidelines is focusing on the total energy
costs of buildings, from the design stage through to demolition (UNEP, 2011). Since around 80 per cent of the
energy consumption in buildings occurs during their use
(as opposed to their construction), a more holistic approach requires consideration of the range of appliances
and equipment they contain. In commercial buildings,
the fastest growing area of energy consumption is office
equipment, while in residential buildings a growing proportion of energy consumption is associated with the use
of household appliances such as flat-screen televisions and
home computers.
There are important differences in the potential for
greening construction in developed and developing countries. Greening new construction is particularly important
in developing countries, some of which are experiencing
a building boom. Good design can massively reduce the
need for cooling in hot climates. In industrialized countries, by contrast, the potential for green refurbishment
of existing buildings is central. This includes a range of
measures, such as improving insulation, installing more
efficient windows and replacing air-conditioning and electrical appliances with more efficient models (Kievani et
al., 2008).
In Europe, for instance, some three-quarters of the
building stock that will be in place in 2050 is already built.
In France, it is likely that buildings constructed before
1975, when the first thermal efficiency regulations were
Chapter 8: Buildings
introduced, will represent over 50 per cent of the building
stock in 2050 (WBCSD, 2009).1
EU policy initiatives are expected to help to quadruple
the amount of certified green building space in Europe,
albeit starting from a very low base: less than 1 per cent
of total building space was certified green in 2010, and
this is forecast to rise to no more than 2 per cent by 2016.
The largest markets in Europe are Germany and France,
which have robust commitments to net positive energy
buildings; that is, structures which generate more energy
than they consume (Pike Research, 2011).
In the United States, the green retrofitting of non-residential buildings is expected to be a US$6.6 billion
business by 2013 (Pike Research, 2009). For new commercial and new residential construction, an estimated
10–12 per cent and 6–10 per cent is green, representing
an annual US$24–29 billion and US$12–20 billion
market, respectively. By 2013, these markets are expected
to grow respectively to US$56–70 billion for green
commercial and US$40–70 billion for green residential
construction (McGraw Hill, 2009).
The Leadership in Energy and Environmental Design
(LEED) certification scheme (a set of guidelines for architects, engineers and designers who are committed to
Table 8.1
making buildings less wasteful), has enjoyed considerable
success. Federal, state and local governments are increasingly offering incentives for LEED-certified buildings.
Total water savings from LEED green building certification in the United States between 2000 and 2009 are
estimated at 15 billion gallons, comprising 0.5 per cent
of annual, non-residential water use (Watson, 2009).
Take-up of the LEED green building standard outside
the United States since 2005 has also been impressive
(table 8.1) with a 30 per cent increase in certifications in
2009 alone, which represents 74 million square metres of
registered projects (Watson, 2009).
Increasing energy efficiency is a key objective of
greening buildings. In addition, water-efficiency strategies
are being pursued, particularly by countries facing water
shortages. In India, innovation in indigenous and green
building approaches include rainwater harvesting with the
segregation of surface and roof-top run-off, the use of pervious paving to maximize groundwater recharge and the
introduction of waterless urinals (UNEP SBCI, 2010a).
Demand-side management of household water-use covers
appliances used for toilets, urinals, shower heads, taps,
washing machines and dishwashers. Skilled plumbers can
play a major role in promoting such equipment.
LEED certification outside the United States
Country
Number of projects
Total floor area
(millions of square metres)
Indiaa
491
44.4
United Arab Emirates
669
42.3
Greater Chinab
310
23.2
Republic of Korea
94
11.4
Saudi Arabia
59
89
Canadac
326
72
Mexico
109
43
Brazil
145
38
92
22
Germany
Notes: Data for India includes projects registered directly with IGB.
b
Greater China includes Hong Kong, China; Macau, China and Taiwan, China.
c
Figures for Canada only include data prior to the programme administration by the Canada Green Building Council.
Source: Watson, 2009.
a
1
The annual volume of new construction in France involves 300,000
residences and 14 million m2 of heated commercial buildings. The current
stock of existing buildings involves nearly 30 million residences and
over 814 million m2 of heated commercial buildings. Source:
http://www2.ademe.fr.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
B. Emerging policy instruments
for green building
130
A range of policy instruments is available to encourage ecologically sustainable building, and
policy-makers are best served by taking a holistic,
cross-sectoral approach, pursuing mutually reinforcing interventions.
Regulatory and control instruments are particularly effective in addressing two key barriers to
greening the building sector. The first barrier is that
the industry is highly fragmented, with many enterprises being on a small scale. Fragmentation is also in
evidence among the industry’s customers, which
range from small landlords to corporate propertyowners who may manage numerous buildings, and
from municipal public housing authorities to national
governments. Transaction costs – the time, skills and
effort required to determine and undertake efficiency
improvements – are often high. In addition, there
may be information barriers; builders, homeowners
and/or renters may lack information about cost-effective energy efficiency opportunities or other green
upgrades, which may discourage them from acting
(Hoppock and Monast, 2009).
Meanwhile, market failures can take the form of
competing priorities, such as when building tenants
have an interest in efficiency improvements (to bring
down their energy bills) that are not shared by the
building owners (who want to minimize retrofitting
costs). In the United States, one-third of residential
energy consumption is affected by such barriers.
Updated building codes can help to overcome this
particular obstacle, by requiring landlords and homebuilders to incorporate cost‐effective energy
efficiency measures during construction, and energy
performance labels can help to surmount maintenance barriers in existing buildings. Lighting and
appliance standards are important for both new and
existing structures (Hoppock and Monast, 2009). In
Northern China, heat energy use is often not paid by
residents, but by their employers (and billed not according to consumption, but by square metre of
residential space), and this has been a major barrier
to energy efficiency investments. Reforms were expected to create a substantial market for retrofits and
to lead to 27 per cent energy savings in the building
sector (Richerzhagen et al., 2008).
Meanwhile, the combined pressures of globalization and recession have depressed prices in the sector,
increasing the drift towards deregulation and fragmentation and giving rise to a significant decline in
standards, notably in health and safety.
A number of policy instruments can help to promote green buildings as detailed below.
Regulatory and control mechanisms are easier to enforce with respect to new rather than existing
buildings. Examples of such measures are building
codes, appliance standards and energy efficiency obligations or quotas. Codes and standards offer a
particularly effective means of implementing highperformance technology and best practices and also
serve to attract investors (Granade et al., 2009). In
the general assessment of energy efficiency in buildings, two major types of energy codes are employed:
“prescriptive” and “performance-based” (Hitchin,
2008; Laustsen, 2008).
Mandatory energy audits are an extension of
building codes and commissioning processes (UNEP
SBCI, 2009). In many European countries, governments have made energy audits mandatory for public
buildings. The EU’s Energy Performance in Buildings
Directive (EPBD), for example, requires energy performance certificates to be presented to the customer
during any sale or lease transaction of a building and
targets both existing and new buildings in the residential and non-residential sectors.
Fiscal instruments and incentives include energy or
carbon taxes, tax exemptions and reductions, public
benefits charges, capital subsidies, grants, subsidized
loans and rebates. Taxes can reinforce the impact of
other instruments, such as standards and subsidies,
affecting the whole building life cycle and making energy efficiency investments more profitable. They also
offer governments the possibility of investing tax revenues in green-building improvements. Grants and
subsidies are well-suited to overcoming the obstacle
of up-front investments with payback extending over
a number of years. This is particularly important for
low-income households, which otherwise tend not to
make investments in energy efficiency, even if they
have access to capital. Incentives are also used to encourage innovators and small businesses who would
like to invest in R&D but find it difficult to access
capital.
Green procurement can drive the green transformation in the building sector, given that the public
sector is the owner of a large estate of both housing
and institutional buildings. This can also be used to
stimulate innovation by rewarding new ideas and excellence rather than the nominally lowest bid.
Chapter 8: Buildings
Moreover, the public sector can provide a lead,
demonstrating and benefiting from new technologies
that may then be adopted by the private sector. In
Brazil, where the government agency PROCEL provides funding for retrofits in Government buildings,
over 140 gigawatt-hours (GWh) are saved yearly
(UNEP SBCI et al., 2007). In Germany, 25 per cent
of building energy use was saved in the public sector
over a 15-year period (Syndex et al., 2009). In the
United States, the General Services Administration
announced in 2010 that it would require LEED Gold
certification as a minimum standard in all new US
federal building construction and substantial renovation projects (ILO, 2011a).
Stimulus packages implemented in the wake of the
2008 global economic crisis have done much to boost
investment in green buildings while, at the same time,
sustaining employment. Out of the US$105 billion
made available under Germany’s two economic stimulus packages, some US$10 billion was allocated to
energy-efficient buildings – an investment expected
to create 25,000 jobs (UNEP, 2009). In the United
States, the American Recovery and Reinvestment Act
provided US$5 billion to weatherproof the homes of
one million low-income families, US$4.5 billion to
retrofit federal buildings and US$0.5 billion for green
jobs training. In China, some 400 billion yuan in
stimulus funds (equivalent to US$64 billion) were allocated to affordable housing. There is also a separate
1 trillion yuan commitment to post-quake reconstruction, which includes low-carbon buildings (ILO,
2010).
Table 8.2
C. Impacts of greening on
employment and
quality of life
1. Social housing programmes
Slum-dwellers, representing over one-third of the world’s
urban population, live in poverty that is often worse than
that experienced by the rural poor (UN-HABITAT,
2007). While the proportion of the urban population
living in slums in the developing world dropped from 39
per cent in 2000 to 32 per cent in 2010, in absolute terms
the numbers of slum-dwellers have actually grown, from
657 million in 1990 to 828 million in 2010; see table
8.2) (UN-HABITAT, 2010).
Greening the building stock of social housing programmes could help to alleviate poverty by generating
savings on energy expenditure – which is disproportionately high in poor households – and promoting social
inclusion through the provision of work to disadvantaged
communities. But there are additional benefits. UNHABITAT (2010) argues that cities can stimulate
sustained economic growth and employment for underprivileged populations through the promotion of
labour-intensive projects, particularly public works and
in the construction industry, which offer opportunities
for small-scale enterprises and the informal sector
generally.
In African cities, labour-intensive infrastructure projects undertaken since the 1960s have often struggled, due
Urban and slum populations in developing regions
Subregion
Percentage
population
urban 2010
Percentage
population
urban 2050
(predicted)
(%)
Urban slum
population
2010
Percentage
urban slum
population
2000
(millions)
Percentage
urban slum
population
2010
(%)
Latin America and
the Caribbean
79.4
88.7
110.7
29.2
23.5
Sub-Saharan Africa
37.3
60.5
199.5
65.0
61.7
Northern Africa
52.0
72.0
11.8
20.3
13.3
Western Asia
66.3
79.3
35.7
20.6
24.6
Southern Asia (incl. India)
32.2
57.2
190.7
45.8
35.0
Eastern Asia (incl. China)
48.5
74.1
189.6
37.4
28.2
South-Eastern Asia
48.2
73.3
88.9
39.6
31.0
Source: UN-HABITAT, 2010.
131
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
to shortcomings such as the ad hoc nature of schemes
and makeshift administrative arrangements, but there
have also been notable successes. In Johannesburg, for example, the municipal government launched an Expanded
Public Works Programme funded by national and local
budgets (UN-HABITAT, 2010). The Johannesburg
Housing Company has made a significant contribution
to the development of social housing in the inner city,
using green technologies (see box 8.1).
In Brazil, the living conditions of an estimated 10.4
million people were improved between 2000 and 2010
and the share of urban slum inhabitants reduced from
31.5 to 26.4 per cent. Governmental initiatives included
the development of low-income housing policies that subsidize construction material costs, sites and services, and
provide for slum upgrading and land tenure regulariza-
tion. New projects include the social housing programme
My House, My Life (box 8.2).
In the United States, the National Association of
Home Builders (2010) reports that the building of 100
new Low-Income Housing Tax Credit (LIHTC) units
for families leads to the creation of 80 jobs from the direct
and indirect effects of construction and 42 jobs supported
by the induced effects of the spending. An earlier study
on the economic benefits of public housing in ten large
metropolitan areas in the United States found that, for
every dollar of direct federal spending on capital and
maintenance, an additional US$1.12 in indirect and induced expenditure is generated by suppliers, vendors and
wage earners. It was found that these expenditures support, on average, 244 jobs in each metropolitan area
(Econsult, 2007).
Box 8.1 Revitalizing the inner city of Johannesburg
132
The Johannesburg Housing Company provides an example of an innovative public-private partnership in which old
city-centre buildings were refurbished for residential purposes, with strong community involvement. By 2008, the
project had upgraded 2,700 homes in 21 buildings that included former hotels and offices. Financial support was
provided by European donors, government housing subsidies and commercial bank loans. Technologies introduced
included solar energy systems, energy-efficient light bulbs, better insulated boilers and water tanks, as well as
energy management systems to avoid use at peak-priced times. The project has provided jobs for over 1,000 contractors in maintenance, cleaning and more specialized functions, such as electrical services and plumbing. A
number of barriers had to be overcome, including reluctance on the part of financial institutions, designers and
architects to work in inner-city, low-income neighbourhoods. Management and regulatory problems also had to be
tackled (Kievani et al., 2008). The case has illustrated the importance of improving community awareness of green
building opportunities and the need to move refurbishment up the priority list of public spending.
Box 8.2 Brazil: Programa Minha Casa Minha Vida—PMCMV (My House, My Life)
Initiated in response to a massive housing deficit, this social housing programme was launched in March 2009
with an initial budget of R$34 billion (US$18 billion) and planed to build 1 million homes for low-income families
by the end of 2011. The second stage of the programme, which is integrated into the Government’s Growth
Acceleration Programme (Programa de Aceleração do Crescimento), was announced in March 2010. With a budget
of R$278 billion (US$153 billion) for 2011–14, it made a commitment to build a further 2 million homes (Loudiyi,
2010). Families earning up to three times the minimum wage in cities with over 100,000 inhabitants will receive
subsidies that set the monthly repayment rate to around R$10 per month. Families earning three to six times the
minimum wage are guaranteed that their monthly mortgage payments will not surpass 20 per cent of their income
(Café, 2009).
Houses built under the programme have to meet a number of environmental requirements, including rainwater collection and the use of certified timber. Solar water heaters were made compulsory for houses in the southern half
of Brazil in late 2010. The Brazilian Association of Refrigeration, Air Conditioning, Ventilation and Heating (ABRAVA)
estimated that some 1.1 million m2 of solar collector area would be added in 2011 (Cardoso, 2011), surpassing
the country’s total installed area in 2008 of just 700,000 m2 (Café, 2009).
In 2009, ILO (which advised the Brazilian Government to include solar collectors in the PMCMV programme)
expected that some 500,000 houses would eventually be built with solar heating, and that homeowners could
expect a 40 per cent reduction in electricity bills. ILO also projected that nearly 18,000 additional jobs could be
created in the solar installation industry (ECLAC and ILO, 2010). In 2010, CAIXA, the government-owned mortgage
bank, financed approximately 43,300 housing units with solar water heating (Café, 2011). CAIXA requires that
solar installers working under PMCMV be accredited under the Qualisol quality label, one of a number of quality
control measures imposed (Café, 2010).
Chapter 8: Buildings
2. Informality and the quality of green building
measures
The construction industry is subject to a high degree of
informality and prevailing poor working conditions.
Recent industry developments have, if anything, made
matters worse. The past three decades have seen a shift
in employment practices in the industry, with construction companies around the world drastically reducing
their permanent labour forces in favour of employing
workers on a casual basis or outsourcing their labour
supply through intermediaries (Wells and Jason, 2010).
In developing countries in particular, the building sector
has been slow to apply internationally recognized standards and codes with respect to productivity, quality,
safety and health and environmental performance. Local
institutional and legal weaknesses present obvious barriers to raising standards, but so too does the fragmented
nature of the industry and its myriad operators, many
of which are small and medium-sized enterprises
(SMEs). One way to address this problem would be to
include job quality or decent work criteria in private
standards, such as the LEED certification scheme.
However it is tackled, it is clear that the introduction
of new, green building standards presents an opportunity to upgrade overall standards of operation in the
industry.
Evidence from China and the United States suggests
that informality in the construction industry can be a
powerful obstacle to making green building efforts succeed. Enterprises and workers must be adequately
prepared and skilled to handle efficiency technologies
properly and carry out quality retrofitting work. A 2008
study of Chinese practice argued that high-tech energy
efficiency products and materials were not suitable for
wide use in the country’s building industry so long as the
training of construction workers was limited because incorrect application by an unskilled workforce negates
any advantages that would otherwise be derived from
advanced efficiency materials (Richerzhagen et al.,
2008).
A study from California of three energy efficiency
related markets – heating, ventilating and air-conditioning (HVAC), residential home retrofits and
commercial lighting – found that a high incidence of
poor-quality installations has resulted in lower-than-expected energy savings, undermining market growth.
Worker training is part of the remedy, but must be accompanied by efforts to overcome market conditions
(Good Jobs First, 2010) that lead many employers to
compete on cost rather than on the basis of quality. These
conditions include lax enforcement of building permits,
codes and standards and of employment laws that translate into low wage floors and limited career ladders. This
is especially the case in HVAC markets, low-income
weatherproofing programmes and residential building
retrofitting. Under these circumstances, there is a high
rate of staff turnover among enterprises in the sector,
meaning that public investments in workforce education
and training are frequently lost. Efforts are being made
to address these problems (Institute for Research on
Labor and Employment, 2011).
3. Employment generation impacts
Greening the building sector generates employment
through new construction and retrofitting of buildings,
as well as the production of green materials, products,
appliances and components. Green building also boosts
employment through energy-efficient operations and
maintenance, the expansion of renewable energy sources
and tangential activities, such as recycling and waste
management. According to the IEA, green building refurbishment is, in fact, more labour-intensive than any
other key climate intervention, including switching to
cleaner cars or adopting wind and solar energy technologies (IEA, 2009a).
A number of studies have sought to estimate the employment potential of the construction industry in terms
of employment factors, that is, the number of jobs that
are expected to be created by spending a given sum of
money. A number of recent US and European retrofitting studies, for instance, use a relatively conservative
figure of about 12 direct and indirect jobs for every US$1
million of investment (Hendricks et al., 2009; Deutsche
Bank Climate Change Advisors and Rockefeller
Foundation, 2012; BPIE, 2011).
In an analysis for the International Trade Union
Confederation (ITUC, 2012), the Millennium Institute
generated employment factor estimates for 12 countries
in Africa, the Americas, Asia and Europe. Table 8.3 underscores the fact that labour intensities in the
construction sectors of developing and emerging countries are typically much higher than those of industrialized
countries. It also shows assumed investments over 5 years
and the employment that could result – combined
spending of US$470 billion could generate a total of 17.5
million jobs, or 3.5 million per year, on average.
The bulk of the literature on green building is oriented
toward industrialized countries, and therefore it is not sur-
133
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Table 8.3
Construction industry green employment, selected countries
Country
Investment over 5 years
(US$ millions)
Employment1
(thousands)
USA
20–27
340,712
9,090
Brazil
134–182
17,046
3,099
Germany
23–31
59,960
1,870
Indonesia
160–217
5,172
1,123
South Africa
122–165
5,462
902
Spain
17–24
21,401
506
Australia
15–21
16,443
343
Tunisia
145–197
585
173
Nepal
739–999
154
154
88–119
932
111
Ghana
332–449
164
73
Bulgaria
78–106
575
61
Dominican Republic
134
Jobs per US$1 million
of investment
Using the high end of estimated employment factors; rounded to the nearest thousand.
Source: ITUC, 2012.
1
prising that the primary focus of many studies is on the
employment impacts of retrofits. This fact is also reflected
here. Still, with regard to new buildings, Booz Allen
Hamilton (2009) reports that green construction in the
United States supported over 2.4 million jobs (direct, indirect and induced) in the 9-year period from 2000 to
2008. It was judged to have the potential to support up
to 7.9 million jobs between 2009 and 2013.
For building efficiency retrofits, a joint study by the
Center for American Progress and the Energy Future
Coalition (Hendricks et al., 2009) calculated that 6.25
million jobs could be created over a 10-year period if 40
per cent of the US building stock – some 50 million buildings – were renovated by 2020 with an average investment
of US$10,000 per retrofit. More recently, Deutsche Bank
Climate Change Advisors and Rockefeller Foundation
(2012) found that energy efficiency retrofits of the pre1980 building stock could reduce electricity use by 30 per
cent and reduce total US GHG emissions by nearly 10
per cent. More than 3.3 million cumulative job-years of
employment, entailing a wide range of skill qualifications,
could be created (table 8.4).
Public policy plays an important role in triggering private retrofit investments. Tax incentives under the Better
Buildings Initiative (BBI) – launched by President Obama
to reduce energy consumption by 20 per cent by 2020 –
are expected to have this effect, catalysing three times as
much private investment. The BBI also includes a loan
guarantee programme, as well as a competitive grant programme for local and state governments, that streamlines
regulations and attracts private investment for retrofit
projects (PERI, 2011).
In Europe, the EU’s Energy Performance of Buildings
Directive (EPBD) came into force in 2003 and was made
more stringent in 2010. European Commission staff examined a range of proposals and options and concluded
that between 280,000 and 450,000 new jobs might be
created by 2020, chiefly among energy auditors and certifiers, inspectors of heating and air-conditioning systems,
in the construction sector and in industries that produce
materials components and products needed in order to
improve the performance of buildings (CEC, 2008). A
longer term (2011 to 2050) assessment of EPBD impacts
was undertaken by the Buildings Performance Institute
Europe (BPIE, 2011). A number of scenarios distinguished slow/fast and shallow/deep rates of building
retrofits in Europe. An accelerated pace of renovation
could generate an average 0.5 million to 1.1 million jobs
per annum. One benefit of long- as opposed to short-term
renovation programmes, is that they help to bring about,
and sustain, a continuous process of improving workers’
qualifications and skills. Europe-wide findings are reinforced by studies on the national level, such as in Hungary
(box 8.3).
Chapter 8: Buildings
Predicting future outcomes can be tricky as it is hard
to know how government policies and private-sector decision-making will evolve, how much investment for
retrofits will materialize and what the overall industry conditions will be. Therefore, it is important to examine actual
country experiences. Germany’s building rehabilitation
Table 8.4
programme has generated a significant number of jobs in
recent years. It also provides an example of the key role
that can be played by unions and employers, as well as a
development bank, supporting local authorities and
primarily benefiting SMEs (box 8.4).
US building energy efficiency retrofit impacts
Residential
Investment (US$ billion)
Commercial
Institutional
Total
182
72
25
279
Energy savings
(trillion BTUs a)
1,892
896
293
3,081
Cumulative job-years
(thousand)
2,160
876
298
3,334
British Thermal Units
Source: Deutsche Bank Climate Change Advisors and Rockefeller Foundation, 2012.
a
Box 8.3 The employment benefits of green retrofitting in Hungary
A recent study undertaken by Ürge-Vorsatz et al. (2010), looking at the net employment impacts of a large-scale
energy-efficiency renovation programme in Hungary, simulates five scenarios, including a “deep retrofit, fast implementation rate” scenario, which assumes that 5.7 per cent of the total floor area will be renovated per year.
The research demonstrates that a renovation programme of this scale could generate up to 131,000 net jobs in
the country, whereas a less ambitious scenario would see the creation of only about 43,000 new jobs. Under the
“deep renovation” scenario, job creation is calculated to peak in 2015 with a massive 184,000 new jobs, notwithstanding employment losses in the energy-supply sector. It is important to highlight that almost 38 per cent of
these employment gains derive from indirect effects on sectors supplying the construction sector, as well as from
the higher spending power resulting from the previous rise in employment.
Box 8.4 Energy efficiency retrofits in Germany
Germany’s Building Rehabilitation Programme is part of the Government’s Energy Concept 2050, which includes
the goal of establishing a “climate-neutral building stock” by 2050 (BMU, 2010). The Alliance for Employment
and the Environment, a collaborative effort between the government, trade unions, employers’ federations and
NGOs, was established in 2001 in response to an economic crisis and rising unemployment in the building sector
at the time. It led to the establishment of a programme to fund energy efficiency retrofits of residential buildings.
Administered by the KfW bank for reconstruction and development, a cumulative US$26 billion (€21 billion) in
public loans and grants were made available between 2001 and 2008 (Schneider, 2010).
A 2009 input-output study of the job impacts of €7 billion of KfW-funded investments found that some 132,000
retrofitting projects helped to reduce CO2 emissions by 955,000 tonnes and created 60,000 direct and 51,000
indirect jobs. On average, an investment of €1 million was found to generate 16 jobs – an employment factor consistent with findings from US studies. Investments and the number of retrofits have fluctuated from year to year,
as has the employment generated in the process (figure 8.1). During the period 2005–10, a total of 1.2 million
building retrofits were undertaken with the support of KfW funding, reducing CO2 emissions by a cumulative 3.7
million tonnes (Bremer Energie Institut, 2010; Institut Wohnen und Umwelt GmbH, 2011).
135
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Figure 8.1 Direct and indirect jobs in energy efficiency retrofits financed by Kf W loans and grants, Germany, 2005–10
Number of jobs (’000)
120
111
100
92.5
80
65
60
51
40
35
27
20
0
2005
136
2006
2007
2008
2009
2010
Note: The KfW loans and grants stimulated much larger additional private investments – totalling €94 billion during 2006–11 – financing the renovation
of approximately 2.7 million apartments and 1,100 communal buildings. Annual CO2 emissions have been reduced by approximately 5.2 million tonnes.
Public and private investments together support up to 300,000 jobs annually – either creating new positions or maintaining existing ones. Jobs are
primarily created by SMEs.
Source: BMVBS, 2012.
Important employment opportunities are generated
through the production of the materials and products
that help to make a building more efficient, as indicated
by a study conducted by ADEME (2008) in France,
showing the number of jobs directly involved in carrying
out interior insulation of walls, ceilings, and floors. In
2006, there were 9,700 jobs related to these activities, as
well as 7,150 jobs in the production and application of
associated materials. ADEME’s 2008 analysis projected
the figures to grow to 21,000 and 15,000, respectively,
by 2012. Meanwhile, roof insulation accounted for 3,050
direct jobs in 2006, a number that was expected to
double by 2012.
Insulation materials include mineral wool and plantbased wools (such as cellulose and hemp), the use of
which is accompanied by the introduction of special unit
materials, such as insulation bricks. Industries supplying
these materials employ significant numbers of people in
all regions. In Europe, for example, the mineral wool industry employs around 20,000 people and the tile and
bricks industry around 84,300 (Syndex et al., 2009).
Meanwhile, a recent ILO country survey (ILO, 2011a)
identified a clear expectation that the manufacture of
green building materials and products is likely to be
a significant growth area, particularly in developing
countries.
Energy services provision is becoming an industry of
growing importance, working to identify, monitor and
verify energy savings. According to James Dixon, the
chair of the National Association of Energy Service
Companies (NAESCO) in the United States, this industry has provided US$50 billion in energy savings
since 1990 and created roughly 330,000 US jobs.
NAESCO estimates that every US$1 million of project
spending creates around ten direct jobs in engineering,
construction and equipment manufacturing, and between ten and 12 indirect jobs (Trabish, 2011). Energy
Service Companies (ESCOs) have, to date, primarily
pursued energy efficiency improvements in existing
buildings, but some of the larger firms have begun to
offer various energy-related services that support greenbuilding certification processes (Satchwell et al., 2010)
Lessons are being learned and good practices are
being refined all over the world. Successful initiatives include urban-level projects, special programmes offered
by universities, initiatives involving industry bodies, tailored services from financial institutions and strategies
by individual companies seeking to engage employees in
green innovation. Some of the most interesting initiatives
bring together the public and private sector and address
industry needs, both in terms of business enterprise imperatives and workers’ expectations. They provide and
mobilize sustained funding with public funding
crowding in private investment. Successful schemes also
address the problem of the high up-front investments
needed and split incentives between building owners and
Chapter 8: Buildings
tenants. Finally they ensure that building owners are wellinformed and building enterprises are competent in the
installation of modern technology. This is true of the
projects in Johannesburg, Brazil and Germany cited
earlier.
Greening buildings of course implies changes that
will lead to the loss of jobs elsewhere – principally in the
energy industry, which faces reduced sales of heating
fuels and electricity as the need for energy inputs into
buildings declines. Yet, a number of studies support the
conclusion that investments in green buildings do produce more jobs than they destroy in the energy-supply
industry. A study by Wei et al. (2010), for example, found
that energy-efficiency investments create 0.38 job-years
per GWh saved; considerably higher than job creation
in coal, natural gas or nuclear power (0.11 job-years per
GWh), but less than the jobs created by solar panels (0.87
job-years per GWh). However, it is clear that there will
be job losses in brown industries such as fossil energy or
the cement industry, as noted by the ILO (CEDEFOP,
2010) in its consideration of employment shifts to other
supplier industries. This underlines the need for retraining and upgrading skills.
3. New skill requirements
The greening of the building sector calls for new approaches to construction, new understanding regarding
the use of sustainable materials and new methods of minimizing adverse environmental impacts. Still, many of
the skills required will be familiar. Retrofitting, for
example, requires workers, such as plumbers and electricians and carpenters, with traditional construction skills
(Martinez-Fernandez et al., 2010). However, these traditional occupations will undergo significant changes in
the context of green building: for example, the plumber
may have to consider the recycling of wastewater or the
installation of a solar water-heater, while the electrician
may require an understanding of photovoltaic technology. Some occupations will be more affected than
others. Carpenters (insulation work), plumbers (installation of solar water heating), heating engineers, painters
and plasterers (insulation, roofs and walls), roofers (solar
PV and thermal installation) and electricians will all see
significant changes (Strietska-IIlina et al., 2011). As a
notable example, Australia has successfully tackled the
need for skills upgrading for plumbers (box 8.5).
As mentioned above, Germany’s retrofit programme
was driven by a union–employer–government partnership. Similarly, partnerships in the form of green advisory
councils involving leaders of companies, utilities and
labour unions have proven useful in facilitating dialogue
on skills training and upgrading needs, and allowed for
ongoing feedback so that training programmes and curricula are driven by the priority needs of the industry’s
workforce. A good example of this is the Green Jobs
Advisory Council, which has been set up in Washington
DC to help agencies to develop green job training policies. Another US programme focused on
training/retraining is the Clean Energy Workforce
Training Program launched in California in 2009, which
serves unemployed construction workers, existing
workers who require retraining, low-income wage
earners and young people seeking to enter the workforce
(McGraw Hill, 2009).
The US city of Portland, Oregon, offers another interesting example of different agents coming together to
develop environmentally sustainable buildings while pro-
Box 8.5 Australia’s GreenPlumber®
Australia suffers from water shortages. Realizing that up to 70 per cent of the environmental water and energy
savings in buildings are affected by plumbing-related work, in the year 2000 employers and trade unions established
a specific qualification: the GreenPlumber®. Post-trade training to obtain the qualification is delivered by a joint
employer–union training enterprise.
Trainees acquire the skills needed to advise consumers on the benefits of energy efficiency, on water conservation
and on the most appropriate and cost-effective appliances. Five separate units are nationally accredited: Climate
Care, Caring for our Water, Solar Hot Water, Water-Efficient Technology and Inspection Reports.
By 2010, over 9,000 plumbers from 4,000 firms had been trained in Australia. The programme has recently been
expanded to New Zealand and the United States, where California has purchased a licence for the training of up
to 40,000 people (ILO, 2011).
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
138
moting decent work. Gerding Edlen Development Co.
is working with labour unions and undertaking joint
projects with union pension funds to create both environmentally sound architecture and decent green jobs.
The projects mandate that union labour be used, resulting in decent work at fair wages for construction
workers. The company also helps workers to acquire
training and skills in green construction, including recycling of materials salvaged from old buildings. Its
consistently high LEED ratings also enable the company
to secure tax abatements (Good Jobs First, 2010).
The green skills challenge in the building sector will
be experienced very differently in developed and developing countries. While, in developed countries, there is
already a critical mass of skilled professionals to build
upon, in many developing countries there is still a lack
of expertise in many areas. This is partly because the construction industry has traditionally been seen as a
repository for absorbing unskilled labour. In India, for
example, an estimated 82 per cent of the workforce employed by the construction sector is made up of unskilled
workers with no formal education (ILO, 2011). The advent of the green building age requires skilled workers
and thus offers an opportunity to change this situation.
In many developing countries, construction skills are
still mainly acquired through an informal apprenticeship
system, with smaller numbers of workers attending vocational training schools. Informal methods of skill
acquisition have severe limitations in conveying relevant
education and learning opportunities, especially at a time
of sudden increase in demand and where higher standards are required. Importantly, training programmes
targeting the informal sector must include as a goal a
shift towards greater work formality to secure better conditions and pay, while at the same time advancing core
standards. This has been attempted in South Africa
through the Basic Employment and Skills Training
Programme, which included a project supported by a
government grant to enable young people to build their
own house and so acquire construction skills (ILO,
2008).
Skills shortages in developing countries are also evident at the level of management and in specialized
occupations, such as architects, as recently reported in
an ILO (2011) survey which found that, in many countries, architects are not sufficiently knowledgeable about
green building approaches. The problem often starts
with gaps in outdated curricula at universities. In India,
for example, it is reported that most architecture schools
and civil engineering courses taught at engineering colleges seldom include modules on green buildings, despite
pressing urban infrastructure needs and an environment
that lends itself to green building innovation (Kumar,
2009). Emerging economies, such as China, also face
shortages of engineers in building services who possess
adequate knowledge about integrating intelligent
building and renewable energy technologies. The introduction of the China Green Building Standard rating
system, building on the experience of green building standards in other countries such as the United States
(LEED), is driving demand for certifiers, auditors and
appraisers.
While there is plenty of anecdotal evidence, reliable
quantitative data on the green skills gap in construction
is lacking. The few indications available suggest that the
challenge is enormous. France, for example, has estimated
additional annual recruitment needs of 20,000 people,
including 15,000 due to the increase in construction and
renovation activities and 5,000 due to new requirements
for renewable energies in construction. France also foresees that around 500,000 professionals will have to be
trained by 2013 in response to the increasing need for
energy efficiency audits, control of energy performance
and building regulatory compliance (ILO, 2011). With
the support of the French Environment and Energy
Management Agency (ADEME 2010), the state employment agencies of some regions have initiated action plans
to improve consistency in the market–employment–
skills–training chain by addressing awareness of national
climate and environmental goals, and providing training
in new skills, employment and communication. A study
carried out for the European Commission (DG TREN)
on worker skills in energy efficiency and renewable energy estimated that a target group of over 2.5 million
workers across the EU-25 would require new skills
training between 2006 and 2015 (ILO, 2011).
According to the ILO (2011) one of the obstacles to
compiling meaningful data on skills needs is the lack of
accurate specification of the types of work involved in
the greening of the building sector. This is a key
challenge for future research. While building and construction require a wide variety of activities and skills,
most quantitative assessments to date have tended to
focus mainly on the retrofitting of buildings for energy
efficiency and the installation of renewable energy solutions in buildings. More accurate assessments of skills
needs must broaden the focus of requirements, while
clarifying occupational profiles, skills and abilities.
Chapter 8: Buildings
D. Conclusions and way forward
Moving forward, it is important to bear in mind that
regulatory and control measures will play a critical role
in ensuring that advances are made in encouraging the
development of climate-friendly buildings.2 Indeed, such
measures are likely to prove the most cost effective, at
least in developed countries. For the upgrading of existing buildings, for poorer groups in society and in
developing countries, grants and rebates must play a central role, because the up-front cost of greening often acts
as a barrier to energy efficiency improvements. In addition, pricing energy in a way that reflects the cost of its
production to society and to the environment is an important stimulus to increased efficiency investment.
In particular, increasingly prevalent standards, such
as LEED and regulations such as the EPBD directive,
indicate the parameters within which future building
market businesses will need to operate. The EPBD combines regulatory (energy performance requirements) and
information-based (certification and inspection) measures, while providing a holistic approach to emissions
reduction.
Experience also demonstrates that significant upgrading of skills, in particular in SMEs, is a precondition
2
UNEP SBCI et al., 2007.
for a successful shift to green buildings. This will mean
attracting suitable workers, training them and being able
to retain their skills. In an industry suffering from high
labour turnover, this will require broad-based improvements in working conditions and formalization.
Experience in California suggests that adequate skilling
is critical for ensuring that green standards, and related
accounting, footprint and auditing schemes yield their
full potential to improve the performance of the building
industry.
Governments can support these developments by ensuring that green building standards are established
nationally and promoted in procurement, creating
financing programmes for green construction and retrofitting, initiating programmes with immediate
cost-effective results, such as lighting and water heating,
as well as providing additional resources to skills upgrading (see also Chapter 10). In both industrialized and
developing countries, public investments and incentives
for energy and resource efficient social housing present
a major opportunity for social inclusion by reducing the
burden of energy expenditure on poor households, while
stimulating the dissemination of green building technologies and contributing to national energy security.
139
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143
Chapter 9
Transportation
Main findings
● Transportation is not only a pillar of modern society,
it is also a rapidly growing consumer of resources and
an emitter of greenhouse gases (GHG) and other pollutants. The sector also employs an estimated 88 million workers globally (50 million jobs linked to motor
vehicle manufacture and use, 26 million in rail and
urban public transport and 12 million in the air transport sector).
● Greening the transportation sector entails a shift to
more rail and public transportation as well as developing greater efficiency in motor vehicle and air transport.
This entails diverting public policy and investments
away from cars and trucks towards a more balanced
support for public transport modes. Government mandates – expressed either in terms of fuel consumption
or CO2 emissions per kilometre driven – have proved
to be important policy tools where fuel efficiency is
concerned. Some governments have also promoted alternative fuels, such as natural gas, electricity or ethanol.
Further far-reaching measures to change current landuse policies and urban planning have also played a part
in channelling transportation development in a more
sustainable direction.
● Transportation is therefore likely to see large-scale shifts
of employment within and across firms in the sector,
as well as a major reskilling of workers. Increases in fuel
efficiency and emissions reductions have the potential
to increase employment. Indeed, because electric grids
will have to be expanded and modernized to accommodate a burgeoning electric vehicle (EV) fleet, signif-
icant employment opportunities could arise in construction and utility companies for decades to come.
However, while this shift will benefit the environment,
employment in the production of fuel-efficient modes
of transportation can only be truly green if those modes
of transport are powered by renewable electricity rather
than fossil fuel-based power plants.
● Alternative modes of transport also offer the prospect
of a better trade balance for countries that depend on
imported vehicles and fuels. Affordable public transport systems provide better access to jobs and livelihoods for the majority of urban residents. In particular,
a transportation system that does not impose the massive health burdens associated with the present car- and
truck-centred system allows people to be more productive and frees up resources for other purposes.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Introduction
146
The transportation sector is a major contributor to climate change, consuming more than half of global liquid
fossil fuels and accounting for about one-quarter of energy-related CO2 emissions (UNEP, 2011). Within the
sector, land transport accounts for some 73 per cent of
CO2 emissions, aviation for 11 per cent and shipping
for 9 per cent. Although emissions from aviation currently contribute a small share of overall emissions, they
are forecast to rise by 150 per cent between 2006 and
2036. Similarly, shipping is one of the least energy-intensive modes of transportation, but UNEP cautions
that its carbon emissions could grow by up to 250 per
cent by 2050 (UNEP, 2011).
Air pollution connected to the sector also imposes
substantial health costs and accidents, congestion and
noise that reduce the quality of life in urban areas. In
addition, traffic congestion reduces travel speeds, wastes
substantial amounts of fuel and translates into lost
working time. Road and related infrastructure construction impinges on species habitat and leads to the loss of
biodiversity. Moreover, the lack of public transportation
options can make it physically hard, and expensive, for
people to secure access to jobs (UNEP, 2011).
As fast-developing countries, such as China and
India, increase their road construction and purchase vehicles in large numbers, the adverse impact of road
transport on the environment is likely to increase unless
greater efforts are made to green the sector. Indeed, more
than 80 per cent of the predicted growth in transport
emissions will come from road transport in developing
countries (UNEP, 2011).
Table 9.1
A. Greening of the sector
and of enterprises
1. Technical options and other instruments
There are a number of options which can reduce the environmental impact of transport, ranging from
technology-focused measures to reduce fuel consumption
to rebalancing the mix of transportation modes. Farreaching measures include increasing the density of human
settlements and limiting the distances travelled by people
and freight (table 9.1).
Reorienting public policy away from cars and trucks
towards a more balanced variety of transport modes, including rail and other forms of urban public transport, is
essential. Indeed, rail transport is more energy efficient
per passenger or freight kilometre than is transport by car,
truck or plane. In particular, the Association of American
Railroads reports that, on average, freight railroads are
four times more fuel-efficient than trucks. And while car
and truck engines are becoming more fuel efficient, so too
are train engines. For instance, US freight rail fuel efficiency has doubled since 1980 (AAR, 2011a). Brazil’s
freight rail energy efficiency improved by 20 per cent between 1999 and 2010 (Andrade, 2011). In Japan, the
Shinkansen high-speed train on the Tokyo–Osaka run
emits one-twelfth of the amount of CO2 per passenger
seat emitted by air travel (Central Japan Railway
Company, 2010).
In the short term, CO2 and air-pollutant regulations,
fuel efficiency standards and clean fuel mandates will play
a crucial role in greening the transport sector (see also
Chapter 5). The reform of implicit and explicit subsidies
Strategies and measures to reduce the environmental impact of transportation
Strategy
Measures
Avoid
Avoiding unnecessary traffic through land-use planning for denser settlements (which enable
urban public transport and non-motorized options) and introducing shorter supply chains
(which help reduce freight vehicle kilometres). Implementing travel demand management,
including substituting telecommuting for business travel where possible.
Shift
Shifting from heavy reliance on passenger cars to rail and urban public transport, from freight
trucks to rail and water transport and from short-distance aviation to rail. Creating a better
balance among transportation modes.
Improve
Improving the fuel efficiency of motor vehicles; using cleaner burning, low-carbon fuels;
retrofitting existing engines to reduce air pollutants; shifting from internal combustion
engines to hybrid-electric and fully electric vehicles.
Source: UNEP, 2011.
Chapter 9: Transportation
for petroleum would make a major difference, as would
efforts to align fuel prices more closely with their full environmental and social costs. In principle, the latter could
be achieved by an eco-tax or by carbon cap-and-trade policies. However, raising the cost of vehicle fuels at the pump
is seldom politically palatable. For the medium to long
term, land use policies and urban planning will also have
an important role to play in influencing transportation
development.
2. Market trends
Rail and other forms of public transportation have not received nearly as much support from government policies
as it has been given to private cars. In North America and
Europe, roads, passenger cars and commercial vehicles have
been prioritized for decades. For example, the five largest
European countries spend 59 per cent of transportation
infrastructure investment on roads and 31 per cent on rail;
the Republic of Korea 48 and 31 per cent, respectively;
Japan, 80 and 12 per cent and the United States 73 and
8 per cent. By contrast, the Russian Federation allocated
47 and 49 per cent, respectively (International Transport
Forum, undated)1. Countries such as Brazil, China and
India are now also increasing their investment in road infrastructure (Majcher and Wang, 2008).
Although still far less than investment in roads, worldwide railway capital expenditure is expected to grow from
about US$190 billion in 2010 to US$230 billion by 2015,
with China alone planning to invest US$135 billion in
2011 (Leenen and Wolf, 2010; SCI Verkehr, 2011a).
Between 2008 and 2015, the number of high-speed trains
in operation worldwide is expected to rise by 70 per cent,
from about 2,200 to more than 3,700. In this field, too,
China is a major player (SCI Verkehr 2008; Manager
Magazin, 2010).
There will be less growth in urban light rail, with the
global market being driven mostly by steady replacement
orders in Europe and, to a lesser extent in North America.
About 200 cities worldwide plan to develop or upgrade
urban light-rail systems (SCI Verkehr, 2011b; UITP, undated). One of the most explosive areas in urban public
transport is subway systems, with global procurement
growing at a rate of almost US$8 billion per year – its
highest level ever. The number of subway systems worldwide rose from 84 in 1990 to 139 in 2010 and close to
6,000 kilometres of additional lines may be added by 2020
(SCI Verkehr, 2010). Bus Rapid Transit (BRT) systems
are also attracting growing numbers of passengers and, in
the past decade, major BRT projects have opened in
Africa, Australia, China, India, Indonesia, Iran, Mexico,
Turkey, several cities in Europe and numerous cities in
Latin America (Weinstock et al., 2011).
The motor vehicle industry, meanwhile, has witnessed
some dramatic changes. The production and sale of passenger vehicles plummeted during 2008 and 2009 in
response to the global economic crisis (Graham, 2010).
Since then, light-vehicle production has recovered but
there has been a dramatic geographic shift in output (with
greater emphasis being placed on fuel-efficiency and hybrid vehicles). In the space of just 5 years, China’s
light-vehicle production has more than tripled, bypassing
Germany, Japan and the United States, making China the
world’s leading producer (Couchman, 2011).
While these trends are positive in their own right, they
are insufficient to bring about the large-scale reorientation
of the transportation sector required to reduce its CO2
emissions and other environmental impacts.
B. Impacts of greening
on employment
The full extent of employment in the transport sector
worldwide is unclear, due in part to the sizable informal
sectors in developing countries that provide maintenance
of vehicles or operate semi-public forms of transportation
such as microbuses (UNEP, 2011). This section will review major components of the world’s transportation
system with respect to employment. It begins with brief
overviews of aviation and shipping, followed by a more
detailed discussion of rail and urban public transport,
car fuel efficiency and alternative fuels and propulsion
systems.
1. Aviation
1
Investment data also include airports, seaports and inland waterways.
The five European countries are France, Germany, Italy, Spain and the
United Kingdom. UK data include only road and rail. The most recent
years for which data are available vary: figures for Europe and Japan are for
2008; the Republic of Korea for 2007 and the United States for 2003.
Most of the advances in the fuel efficiency of commercial aircraft occurred in the 1960s and 1980s and
progress has been essentially flat since 2000. This lack
147
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Box 9.1 Air France KLM’s fleet modernization and fuel efficiency
The Air France KLM group, one of the largest airlines in the world, employs about 105,000 people. The inclusion
of aviation in the European Union (EU) Emissions Trading System (ETS) from 2012 is prompting the company to
make a number of changes, including fuel savings through replacement of aircraft and changing the length of
routes. Air France signed the Air Transport Sector Commitment Agreement with the French Government in January
2008, which called for a fleet modernization plan, CO2 emissions reduction targets and an improvement in energy
efficiency of around 7 per cent by 2012. From 4.3 litres per passenger km in 2000, the company’s fuel use
declined to 3.9 litres in 2007; it has a 2012 target of 3.7 litres. More than US$20 billion in fleet replacement
investments in the period from 1998 to 2012 are reducing the company’s fuel use by 850,000 tonnes per year,
with a resultant saving of more than 2.6 million tonnes of CO2. The investments are generating additional employment,
but the biggest impact is on up-skilling of existing employees among pilots, cabin crew and ground personnel.
Source: GHK Consulting, 2009.
148
of improvement can be explained in part by low fuel
prices between 1987 and 2004 and a tripling in the average age of production lines since 1989 (Rutherford
and Zeinali, 2009).
The International Civil Aviation Organization is
working to develop a CO2 standard for new aircraft (to
be considered at its General Assembly in 2013), which
it is hoped will drive the design and deployment of more
efficient planes. Operational changes also offer significant fuel efficiency gains (ICCT, undated). The design
and production of more efficient aircraft and engines
will require additional scientists and engineers.
Greening aviation will also involve up-skilling of air carriers’ workforces, as Air France KLM’s experience
suggests (box 9.1). Similarly, Deutsche Post DHL
Group is emphasizing employee involvement and
training when greening its air and ground logistics
operations.
By including aviation in its ETS, the EU is incentivizing the pursuit of more efficient aircraft designs.
The sector’s carbon dioxide emissions will be capped at
97 per cent of average 2004–06 levels in 2012 and at
95 per cent from 2013 to 2020. Passenger and freight
airlines will be given 85 per cent of their emissions certificates free and will buy the remainder at auction
(Rahim, 2011). Projections of the additional costs of
including the industry in the ETS vary widely and have
considerable implications for employment. A key issue
is how quickly carbon caps will be reduced, and therefore how much time airlines and aircraft manufacturing
companies will have to adjust to the new requirements.
A broader issue relates to the impact of greater fuel
efficiency on climate change. There is concern, for
example, that by making flights cheaper, improved
fuel efficiency may actually increase air-traffic
demand.
2. Shipping
A global shipping fleet, estimated at 90,000 vessels,
transports 90 per cent of the world’s goods and, according to the International Maritime Organization
(IMO), accounts for around 3 per cent of total global
emissions while employing over a million people.
However, as global trade expands, shipping emissions
are projected to grow by more than 70 per cent by 2020
(UNEP and Climate Neutral Network, undated). An
IMO report released in November 2011 assesses the
likely impact of new mandatory measures intended to
reduce emissions via greater energy efficiency, which
are expected to come into force in January 2013.
Among other regulations, a mandatory Energy
Efficiency Design Index was introduced for new ships
and a Ship Energy Efficiency Management Plan for all
ships at MEPC 62 ( July 2011) and will take effect from
1 January 2013. These measures are expected to offer
reductions in CO2 emissions of 13 per cent by 2020
and 23 per cent by 2030. Employment impacts are not
assessed. Since ship designers and builders are free to
use the most cost-efficient solutions (which could include hydrodynamics, engine changes and operational
changes), such an assessment would be difficult to make
(Bazari and Longva, 2011).
3. Rail and urban public transport
Rail constitutes a relatively green alternative for both passenger and freight transport. In cities worldwide, urban
public transport systems – including buses, subways, light
rail and trams – constitute important modes of passenger
transport. Rail and other forms of urban public transport
Chapter 9: Transportation
offer employment in the manufacture of vehicles and
related equipment, construction of infrastructure (tracks
and stations) and in operating these transportation
systems.
number that was expected to rise to 13,000 by 2012
(ADEME, 2008).
Passenger rail
Manufacturing
On the manufacturing front, Bombardier, Alstom and
Siemens have for a long time dominated the international
rail vehicle market, but Chinese companies are becoming
increasingly important players. Along with the Russian
Federation’s Transmashholding, they also feature prominently in terms of jobs. Roughly half a million people
are directly employed in rail equipment manufacturing
worldwide (table 9.2) and the number of jobs in the
supply chain could be four times larger.
In Europe, in 2006, rail manufacturing accounted for
an estimated 164,800 people, providing roughly 5 per
cent of the region’s 3.2 million transport equipment
manufacturing jobs (Eurostat, 2009). More recent figures
are available for Germany: the number of direct manufacturing jobs grew from 38,400 in 2006 to 45,600 in
the first half of 2010; indirect employment is estimated
at roughly a further 150,000 jobs (VDB, 2011). Spain
and France are also important train manufacturers, with
Spain employing about 9,000 people (CEMAFE,
undated) and France an estimated 11,000 in 2007, a
Table 9.2
With respect to intercity rail, increasing labour productivity, market liberalization and mergers have reduced the
number of jobs and led to protests about excessive staffing
reductions, outsourcing and longer working hours
(Beaulieu, 2005) In Europe, for example, extensive restructuring cut operations jobs from about 2.5 million jobs in
1970 to 1.3 million in 2009 (ERRAC, 2003; CERIC,
2010). In China, streamlining efforts by the Ministry of
Railways cut the total number of staff from nearly 4 million to 2.2 million over two decades (Scales and Amos,
2009). Altogether, the International Union of Railways
(UIC) reports that its members directly employ about 7.1
million people worldwide in passenger and freight transport (UIC, 2011). UIC does not offer estimates for
indirect employment in the supply chain, maintenance
and other services but, as a rough estimate, indirect jobs
might account for almost another 5 million jobs. The expansion of high-speed passenger rail lines in countries such
as Brazil, China, India and Spain provides new employment opportunities in infrastructure and operations.
There are, however, some questions as to whether this development will divert resources from traditional rail lines.
Employment at leading rail-vehicle manufacturing companies
Company
Employment
CSR – China Southern Locomotive
and Rolling Stock (China)
112,000 employees
CNR – China Northern Locomotive
and Rolling Stock (China)
More than 100,000 employees
Transmashholding (Russian Federation)
57,000 employees in 2009
Bombardier (Canada)
33,800 rail-related employees in 2010 (25,600 in Europe; remainder
in the United States, Canada and China)
Alstom (France)
27,000 employees in transport division (70 per cent in Europe)
Siemens (Germany)
Approximately 19,000 employees in the Mobility Division (2006)
GE Transportation
and others (USA)
Approximately 12,000 employees at GE Transportation; more than 4,300
at Electro-Motive Diesel (EMD) in the United States and other countries
All US rail manufacturers: close to 30,000 direct jobs in 2008 (25,000 in 2009),
plus 150,000 jobs in the supply chain
Kawasaki and others (Japan)
Census of manufacturers’ reports 17,500 jobs in rail equipment production
in 2007 (of which 10,300 were in parts production)
Sources: Renner and Gardner, 2010; GE Transportation, undated; Caterpillar, 2010; US International Trade Commission, 2011; AAR, 2011b; ITWF, 2009.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Freight rail
150
The United States is a global leader in freight rail, with
more than 40 per cent of the country’s intercity freight
being carried by rail. Direct employment stands at 175,000
and there are 4.5 indirect jobs for every direct one. Taking
the complete supply chain and induced employment into
account, the industry supports as many as 1.2 million jobs
(AAR, 2011a; AAR 2011b).
Unlike passenger operations, many freight rail operations were hit relatively hard by the worldwide recession,
as indicated by the decline in freight railroad employment
in North America (including Mexico), which fell from
227,000 jobs in 2007 to 209,000 jobs in 2009 (AAR,
2008; AAR, 2010). South Africa’s freight rail industry also
suffered a sharp decline in volume and revenue, starting
in the autumn of 2008. Management at state-owned
Transnet Freight Rail, which employs 38,500 people,
strove to reduce operating costs, leading to intense bargaining with the South African Transport and Allied
Workers’ Union over cuts in overtime, wages and compensation, and temporary employees’ status (ITWF,
2009).
In contrast, Brazil is experiencing strong growth in
freight rail activity. With just a brief dip in 2009, Brazil
saw the volume of freight rail grow by 86 per cent between
1997 and 2010 and employment more than double from
around 17,000 direct and indirect jobs to 38,600, with a
projected 43,000 jobs by 2011. The construction of the
country’s North–South Railways Corridor is creating an
estimated 50,000 direct and indirect jobs. More construc-
tion employment is anticipated in light of ambitious plans
to double the extent of the rail network by 2023 (Andrade,
2011; GE Reports, 2010; Railway Insider, 2010).
Shifting freight to rail is also very important in many
Asian countries. At present, highly polluting trucks account for more than 80 per cent of freight movements in
India, Pakistan and Thailand, approximately 70 per cent
in China and India, 60 per cent in Bangladesh and the
Philippines and more than 40 per cent in Vietnam (Fabian
et al., 2011). Truck fleets are so large in many countries
that retrofits to make their engines less polluting must be
considered as a task with important implications for employment and job quality (box 9.2).
Urban public transport
One of the more encouraging developments from the environmental point of view is the increase in use of urban
public transport in many countries. According to the
International Association of Public Transport (UITP),
worldwide employment connected to running such systems totalled 7.6 million jobs in 2009, rising to 12.6
million when jobs involving the provision of goods and
services to public transportation systems are taken into account (table 9.3). Even in the United States, where public
transport plays a limited role in comparison to private cars,
Table 9.3
Estimated employment in global urban public
transport, 2009
Category
Public transport operators
Box 9.2 Cleaning up trucking at California’s ports
In the United States, a coalition of environmental,
labour, health and community groups in southern
California began, in 2006, to wage a joint campaign
to upgrade or replace the 17,000 trucks serving the
ports of Los Angeles and Long Beach. In many
instances, companies treated their drivers as independent contractors to avoid paying vehicle
insurance, workers’ compensation and health insurance premiums. At a median net income of just
US$29,000 to US$36,000, many drivers could not
afford to keep their vehicles in good condition, thus
worsening air pollution. In Los Angeles, the campaign
succeeded in altering the status of the drivers to that
of proper employees by the end of 2013, banning
trucks built before 1994 and requiring that all trucks
meet 2007 emissions standards (which had positive
impacts on diesel engine standards).
Source: Mattera, 2009.
Employment (millions)
7.3
By region:
Asia-Pacific
2.8
Europe
1.4
Eurasia
1.2
Latin America
1.2
North America
0.4
Middle East and North Africa
0.2
Sub-Saharan Africa
0.07
Public transport authorities
0.3
Supply chain
5.0
Total
Source: UITP, 2011.
12.6
Chapter 9: Transportation
the number of employees in related operations expanded
from 263,000 in 1984 to 403,000 in 2009. The economic
crisis, however, left many transit agencies scrambling for
limited funding, and employment fell to 395,000 in 2010
(APTA, 2012; Freemark, 2011a; Freemark, 2011b).
Germany has one of the largest urban public transport
workforces, with 237,000 direct jobs, rising to 394,000 if
vehicle manufacturing, infrastructure companies, and
service providers are included and 657,000 if induced employment is taken into account (VDV, 2009; VDV and
VDB, 2010). While available statistics for neighbouring
France are not as comprehensive as those for Germany
(since they exclude bus operations, for example), employment appears to be gaining strongly in the light of
expanding investments (figure 9.1).
In Brazil, urban transport heavily relies on cars, trucks
and buses; inter-city/regional rail is largely focused on
freight, while passenger lines are still limited. Rail-related
employment in manufacturing and operations amounted
to some 50,000 jobs in 2008; bus-related employment, at
630,000 jobs, is far more extensive (ILO Brazil, 2009).
In Brazil and a growing number of other countries,
BRT systems are helping to make urban transportation
jobs more sustainable. A World Bank modelling exercise
found that a low-carbon transport strategy for Brazil’s
cities could be a major job creator. Spending US$42 billion
on rail and waterways and US$29 billion on high-speed
rail could generate approximately 1.4 million jobs during
2010–30. Investing US$34 billion in BRT lanes and
subway systems could yield another 3.1 million jobs, for
a total employment of 4.5 million person-years over the
next two decades (World Bank, 2010).
4. Vehicle fuel efficiency
Car engine fuel efficiency has generally improved during
the past decade, but large differences remain between individual countries. The EU and Japan have a substantial
lead, China and Republic of Korea are making major
strides, while Australia, Canada and the United States are
lagging behind (ICCT, 2011).
Under France’s 2006 energy and CO2 labelling system
for cars, Class A vehicles emit less than 100 grams of CO2
per kilometre and Class B vehicles emit 100 to 120 grams
– amounts that are currently among the lowest in the
world. Together, the two classes accounted for approximately 20 per cent of 2007 car sales. ADEME (2008)
calculated that some 23,000 people were directly employed in producing Class A and B vehicles that year, and
projected an increase in the number of jobs to 43,480 by
2012. Driven in part by a “bonus–malus” scheme applied
to car purchases, average CO2 emissions for new vehicle
purchases have been reduced from 149 grams in 2006 to
131 grams in the first quarter of 2010 (CGDD, 2009;
CGDD, 2010).
Figure 9.1 Public transport infrastructure employment in France, 2006–11
80
70
Number of jobs (’000)
60
50
Bicycle infrastrucure
40
Bus infrastrucure
30
Urban light rail
20
Rail infrastrucure
10
Rail manufacturing
0
2006
2007
2008
2009
2010
Note: Figures for 2006–08 are actual values; 2009 is estimated; 2010 and 2011 are projected figures.
Source: ADEME, 2010.
2011
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Figure 9.2 Employment impacts of rising US light vehicle fuel efficiency: Annual fuel efficiency improvement scenarios, 2017–25
800
700
Number of jobs (’000)
600
Energy/mining
500
Motor vehicles
400
Other sectors
300
200
100
0
-100
152
3 per cent
4 per cent
5 per cent
6 per cent
Note: Results given for full-time equivalent (FTE) jobs. An FTE job is defined as 2,080 hours worked in one year.
Source: CERES, 2011.
In South-East Asia, Thailand has emerged as a major
regional car manufacturing and export hub, producing 1.6
million vehicles (of which one-third were passenger cars)
and employing 520,000 people directly and indirectly. The
Government’s 2007 Eco Car Initiative grants tax incentives for producers of fuel-efficient cars that emit no more
than 120 grams of CO2 per kilometre and meet a number
of other criteria. Thailand’s Board of Investment expects
that production of eco cars will reach at least 500,000
units within a few years (TBINA, 2011; Economist,
2007). A Mitsubishi Motors factory that will produce
some 50,000 efficient cars per year, starting in early 2012,
is expected to create up to 3,000 direct jobs (Bangkok
Post, 2010).
After many years of inaction, the United States is
seeking to improve the fuel efficiency of its vehicle fleet.
The most recent effort was announced in August 2011,
when the Obama Administration unveiled an ambitious
new mandate of 54.5 miles per gallon (mpg) for 2017
model-year vehicles (Curtis, 2011). A 2010 US study
modelled the potential employment impacts of increasing
fuel efficiency, including switching to diesel and hybridelectric engines. A key assumption was that employment
is directly proportional to the added cost of new fuel efficiency technology incorporated into future vehicles –
estimated at US$1,152 per vehicle in 2020, or a total of
US$26.7 billion for the entire model year. The study found
that, by 2020, as many as 191,000 additional direct and
indirect jobs could be created, though not necessarily all
in the United States. The study assumed that the additional vehicle purchase cost related to higher fuel efficiency
will not reduce car sales and employment because fuel
economy gains will pay for the added cost (Baum and
Luria, 2010).
Similarly, a 2011 study estimated likely job impacts
under four different scenarios with annual fuel-economy
improvements of 3, 4, 5 and 6 per cent respectively per
year during 2017–25. Fuel savings more than compensate
for the incremental vehicle costs entailed in incorporating
the additional fuel efficiency technologies, generating
overall fuel expenditure savings ranging from US$77.6 billion to US$151.9 billion. The study found that substantial
job gains could be realized (figure 9.2). However, only a
proportion of the job effects would be seen in the motor
vehicle industry itself. The energy industry would lose jobs
and the majority of job gains would be realized elsewhere
in the economy, as fuel savings are reinvested in a range
of products and services (CERES, 2011).
5. CNG vehicles
As of 2010, more than 80 countries were using natural gas
to power a proportion of their motor vehicle fleets. Most
rely on compressed natural gas (CNG), but liquefied petroleum gas (LPG) is also being used, for example in
Thailand’s tuk-tuks. CNG burns more cleanly than gaso-
Chapter 9: Transportation
line and therefore offers important air-quality benefits
(NGV America, undated-b). The number of natural gas
vehicles worldwide grew from less than 400,000 in 1991
to 1.3 million in 2000, and then surged to 12.7 million
at the end of 2010, a figure which represents 1.3 per cent
of the world’s total motor vehicle fleet. By 2020, it is estimated that there may be 50 million such vehicles in
circulation. Currently, the largest fleets are found in
Pakistan, Iran, Argentina, Brazil, and India (IANGV,
2011; NGV America, undated-a).
In Pakistan, many three-wheeled vehicles have already
been converted and the government of the most populous
province, Punjab, decreed that all public-transport vehicles
were to use CNG from 2007 (Rohail, 2008). India’s capital
New Delhi imposed a similar mandate and now has the
single largest urban fleet of CNG vehicles in the world,
including cars, buses and motorized rickshaws (CNG
Now, undated). At least nine other metropolitan areas of
India have been directed by the Supreme Court of India
to switch to natural gas (Kumar et al., 2010).
Manufacturing engines that can run on CNG, producing CNG conversion kits, retrofitting existing vehicles
and constructing a CNG delivery infrastructure all offer
employment opportunities. In India, Ashok Leyland and
Tata Motors are the principal companies involved in modifying bus engines for CNG use as well as building new,
more energy-efficient engines. An ILO study estimates
that operating CNG filling stations in Delhi requires
about 22,500 people and almost 100,000 people are
working as CNG mechanics. The study also notes that
the lack of institutional training for CNG mechanics has
led to the growth of non-formal training, which is being
provided by garages and mechanic shops (Kumar et al.,
2010).
In Pakistan, more than 30,000 people have found employment in the CNG sector (Rohail, 2008), and in
Bangladesh the CNG sector employed about 10,000
people (mechanical engineers, technicians, supervisors
and others) in 2009, a number expected to rise to 16,000.
Most of the skill-building takes place on the job, in the
absence of formal training facilities for CNG conversion
(Mondal et al., 2010).
6. Bio-ethanol and flex-fuel vehicles
153
Brazil has been at the forefront of efforts to convert vehicle
fleets to alternative fuels. During the 1980s, most new cars
ran exclusively on ethanol, but the low oil prices and high
sugar prices of the 1990s rendered ethanol uncompetitive.
Since 2003, flex-fuel vehicles have been introduced and
in 2010 accounted for 86 per cent of all new vehicle registrations, and 95 per cent of passenger car registrations
Figure 9.3 Brazilian car production by fuel type, 1957–2010
3000
Number of vehicles (’000)
2500
2000
1500
1000
500
Diesel
Source: ANFAVEA, 2011.
Ethanol
Flex-Fuel
Gasoline
2009
2005
2007
2003
2001
1999
1995
1997
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1969
1971
1967
1965
1961
1963
1959
1957
0
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
(figure 9.3). Today, 29 per cent of Brazil’s passenger vehicle
fleet runs on flex-fuel, 6 per cent pure ethanol and 65 per
cent gasoline. Brazil’s National Association of Motor
Vehicle Manufacturers (ANFAVEA) forecasts that, by
2030, 92 per cent of the fleet will run on flex-fuel (World
Bank, 2010). With regard to the fuel for these vehicles,
the World Bank concludes that an investment of US$40
billion in ethanol production in the period 2010–30 could
generate 1.1 million person-years of employment in replacing domestic gasoline and 2.8 million person-years in
replacing imported gasoline (ibid.). It should be noted
that the growing use of ethanol could have negative environmental consequences as the expansion of sugar cane
production can push soy production deeper into rainforest
areas. It is important that expansions in ethanol production take place on the basis of an intensified use of existing
land in order to avoid deforestation.
154
7. Hybrid and electric vehicles
Hybrid gasoline vehicles are beginning to make some inroads into the established automobile market. In 2010,
global sales amounted to almost 1 million vehicles, or
about 2 per cent of total vehicle sales. In Japan, however,
hybrids had an 11 per cent market share (Hybrid Car
Statistics, undated). The share of battery and plug-in EV
sales worldwide remains miniscule, though production
capacity is set to rise from under 124,000 units in 2011
to 823,300 in 2013 (Cheung, 2011).
A study by the European Trade Union Confederation
presents a number of scenarios for hybrid and electric
car adoption in the European Union. The low scenario
foresees hybrids representing 15 per cent of the total vehicle fleet by 2030 and electrics another 5 per cent (a
combined total of 24 million vehicles out of an assumed
fleet of 120 million). The high scenario assumes a penetration rate of 30 and 10 per cent, respectively (or 48
million vehicles). The study concludes that producing
fewer conventional engines would translate into 17,000
to 34,000 job losses, against an overall net gain of 80,000
to 160,000 direct jobs (ETUC, 2009).
In Asia, where two- and three-wheelers are ubiquitous, electric models would offer enormous air pollution
and health benefits. An Asian Development Bank study
of India and Vietnam found that electric two-wheelers
emit half the CO2 of gasoline models, and significantly
reduce nitrogen oxides, particulate matter, volatile
organic compounds and carbon monoxide (ADB,
2009).
In the Philippines, the National Electric Vehicle
Strategy programme is seeking to reduce the carbon footprint of road transport. Mandaluyong City in Metro
Manila was selected for a demonstration project involving
20 electric battery-powered three-wheelers (“e-tricycles”),
each seating six to eight passengers, and four charging
stations. The Asian Development Bank has committed
US$500 million to support the project and facilitate
the introduction of 20,000 e-tricycles (Senate of the
Philippines, 2011). Meanwhile, the Philippines’
Congressional Commission on Science and Technology
and Engineering (COMSTE) has marked the development of EVs (including electric bicycles and hybrid
jeepneys and buses) as one of its priorities for 2011. The
Government expects that developing domestic capacity to
design, assemble and maintain such vehicles will create
new jobs and open export opportunities in Southeast Asia
(PCDSPO, 2011).
Fully electric vehicles have no internal combustion engines and associated components, but will generate jobs
in manufacturing advanced batteries and electronic components. Europe and North America are lagging behind
Japan in hybrid development, and may soon face intense
Chinese competition as well. In a bid to move to the cutting edge, the US Congress authorized a US$25 billion
Advanced Technology Vehicle Manufacturing Initiative
or ATVM (AEEE, 2009). Before such federal loan programmes suddenly became politicized in the autumn of
2011 (halting further disbursements, at least temporarily),
more than US$9 billion in loans were provided. It is expected that six ventures that have so far received ATVM
loans will support more than 38,000 jobs, either newly
created or saved at existing factories (USDOE, undated;
Vlasic and Wald, 2012). Advanced battery technology for
hybrid and electric vehicles will be a key focus for competition, with potentially major rewards in terms of job
creation accruing to the regions that win production contracts’. In 2009, the global market for hybrid and plug-in
hybrid batteries was estimated at US$1.3 billion. The
Boston Consulting Group anticipates that the market will
reach US$25 billion by 2020 (Lowe et al., 2010; Baum
and Luria, 2010).
In 2010, almost 90,000 people were employed in the
lithium-ion battery industry worldwide (with 35,700 jobs
in Japan, 33,200 in China, 17,600 in the Republic of Korea
and 1,100 in the United States). Because the automotive
industry currently accounts for less than 10 per cent of demand for lithium-ion batteries (consumer electronics
account for the bulk of demand), levels of employment
related to the motor vehicle sector are still relatively low
(Lowe et al., 2010; Baum and Luria, 2010). In 2009, the
Chapter 9: Transportation
United States had just two factories manufacturing advanced vehicle batteries, which accounted for less than 2
per cent of global production. The expectation is that 30
plants will be operational by 2012, creating tens of thousands of construction and manufacturing jobs (Somson,
2011).
The introduction of hybrid and electric vehicles will
entail significant skills upgrades or adjustment in car factories as well as in the service sector. In the north-east of
England, Nissan is setting up an EV battery assembly plant
with an expected 350 direct jobs, many of them technicians and other skilled trades. In cooperation with
employers, trade unions, universities and public and private training providers, the North East Regional
Development Agency assisted EV-related skill-building
through three programmes: a National Training Centre,
a Future Leaders Graduate Placement scheme and a Low
Carbon Vehicle R&D Centre (Strietska-Ilina et al., 2011).
Supporting infrastructure, such as a network of batterycharging stations, will also have to be built and staffed.
Petrol stations could conceivably evolve to serve a dual
function by undertaking battery charging (but could otherwise face increasing displacement). Employees will have
to upgrade their skills.
EVs will only have a lower environmental footprint if
they are powered by renewable electricity which, of course,
implies the need for substantial changes in the energy
sector (see Chapter 5 for more details). Electric grids will
have to be expanded and modernized to accommodate a
rising EV fleet and this could become an important source
of construction and utility jobs for years, or even decades,
to come (Mattila and Bellew, undated).
C. Issues and challenges
Growing environmental concerns, particularly in the
urban context, will force a reconsideration of the role
played by cars and trucks. Greater emphasis on urban
public transport – an inevitable development in many
cities – combined with urban planning that favours walkable cities will dictate the direction and speed of changes
in the transportation sector. In particular, reliable and affordable transport is essential in gaining access to jobs, and
thus for a flourishing economy and for human development more broadly. Poorly planned or designed transport
systems and unnecessary urban sprawl can make access to
jobs physically difficult and costly, especially for low-income households in both developing and developed
countries, as such families have to allocate a disproportionate share of their meagre incomes to cover transport
expenses. UN HABITAT notes that about 80 per cent of
Africa’s urban dwellers “do not have access to personal vehicles and a large proportion does not even have any access
to motorized transit services”. The rise of the private informal transport sector, including unlicensed minibuses
or motorcycle taxis, is closely related to the failure and demise of many formal public transport systems. The result
has been low-quality service and excessive costs, with many
poor urban residents spending 30 per cent or more of their
income on travel to the workplace (UN HABITAT,
2010). In both wealthy and poor countries, a functioning
and affordable public transit system plays a critical role in
achieving a greater degree of social equity. Sustainable mobility provides positive benefits both for access to jobs and
for economic development.
There are a number of factors driving change in the
sector that have important employment and income
considerations. For instance, with regard to car manufacturing, labour productivity continues to rise and there is
an increased tendency to outsource parts (or all) of the
production process. These trends are likely to continue to
exert pressure on employment in developed countries –
the traditional base of manufacturing.2 The growing fragmentation of production across the globe is also depressing
overall salary levels (Sturgeon et al., 2009; Graham, 2010).
However, the shift away from heavy reliance on private
cars towards lower-carbon urban public transport alternatives is likely to yield gains in other areas, such as
passenger transport, freight transport and transportation
services.3 In fact, recent studies in France and Spain confirm that shifting to greener modes of transportation will
benefit employment. A 2010 study of the “Ile de France”
considered two alternative scenarios for CO2 emissions
reductions. The first projected a slight increase in car
traffic and a 13 per cent increase in transit traffic volume.
The second assumed a reduction in traffic of 10 per cent
2
In the United States, for example, some 707,000 motor vehicle manufacturing jobs – a staggering 53 per cent of total employment – were lost
between February 2000 and June 2009 as a result of productivity gains and
outsourcing (USBLS, undated).
3
A 2007 study analysing future transportation trends in the EU found
that policies seeking to limit transport-related CO2 emissions would lead
to an average growth in overall employment of around 2 per cent per year
over the period 2000–30 for passenger transport and 1.25 per cent for
freight transport (ETUC et al., 2007). An OECD study (Chateau et al.,
2011) assessing the sectoral composition of job creation and job destruction
under the EU’s GHG Emissions Trading System found that transportation
services would see the highest job gains, in large part because the demand
for transport services is complementary to many other economic activities.
The latter study, however, did not offer a disaggregation of results within
the transport sector.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
156
and an increase in public transport of 35 per cent. Under
the first scenario, about 33,000 direct and indirect transportation jobs would be created and 3,000 jobs lost in the
motor vehicle sector. Under the second scenario, 58,000
new jobs would be created and fewer than 8,000 jobs lost
in the sector (CIRED, 2010).
In Spain, an ISTAS study examined two scenarios to
2020. Under a business-as-usual (BAU) scenario, total passenger travel volume increases 4 per cent and the share of
sustainable transport modes (public transport, car-sharing,
biking and walking) remains unchanged at 20 per cent.
An efficiency scenario posits a 3 per cent decline in travel
volume and sustainable modes rising to 31 per cent of all
travel (ISTAS, 2011). Under the first scenario, employment would rise from 297,109 direct and indirect jobs in
2008 to 321,614 jobs in 2020 but, under the second scenario, employment would grow by 49 per cent to 443,870
jobs.
Despite these results, it is important to note that occupational impacts of shifting from cars and trucks to rail
and urban transport will be most pronounced on the operations side and will require retraining, skills upgrading
and career moves. The implications for wages are mixed.
In the US context, for instance, jobs in motor vehicle manufacturing are more highly paid than those in railway
rolling stock manufacture, but railway transportation services offer higher wages than trucking (table 9.4).
Table 9.4
D. Conclusions and way forward
The key challenge for the transport sector is to accelerate
the transition towards becoming a sector that is characterized by lower emissions. Bringing about much-needed
changes in the transportation sector will require a range
of policies. These include mandatory fuel-efficiency requirements, such as those increasingly imposed on car
fleets and will soon come into effect for ships. Subjecting
the sector to carbon-cap and trade regimes, as the EU has
decreed necessary for aviation, is another lever for change,
as are carbon taxes. Government support for green innovation can take the form of R&D funds (such as are available for the development of EV batteries and other
components), subsidies or procurement programmes (see
also Chapter 10). Governments must also enhance investment in inter-city and urban transportation alternatives,
including vehicles and infrastructure. Changes in land use
policies are often essential to make public transportation
options more feasible.
As ground transportation accounts for approximately
77 per cent of the sector’s CO2 emissions, taking steps to
make motor vehicles far more fuel-efficient or running
them on alternative forms of energy is central to the
strategy of greening the sector. Greater fuel efficiency and
hybrid/electric propulsion systems require that new effi-
Employment and wages in the transportation sector, United States, 2010
Employees
Wages (all occupations)
(number)
All transport manufacturing
Mean hourly wage (US dollars)
1,329,370
25.76
19.29
18,650
21.99
16.97
Motor vehicles
All motor vehicle body and trailer
154,740
105,410
28.52
18.58
24.64
15.94
All motor vehicle parts
411,620
20.93
17.17
Total, motor vehicles:
671,770
n.a.
n.a.
Aerospace
480,720
31.78
21.12
4,859,390
20.87
n.a.
Railway transportation
226,860
25.84
n.a.
Transit/bus2
437,450
14.86
n.a.
1,243,980
19.43
n.a.
451,000
26.57
n.a.
Railway rolling stock
All transport services1
Truck transportation
Air transportation
Includes warehousing.
2
Includes taxi and limousine services.
Source: USBLS, 2010
1
Wages (production occupations)
Chapter 9: Transportation
cient technologies and equipment, such as batteries and
light-weight materials, be developed and incorporated into
vehicles, which has the additional benefit of stimulating
employment creation. Jobs gains arise from modifying engines and retrofitting vehicles, producing CNG
conversion kits and developing a CNG delivery infrastructure. A similar picture emerges with regard to converting
fleets to flex-fuel use, which allows vehicles to run on a
mixture of gasoline and bioethanol, as Brazil is doing.
Moreover, recent studies, notably in the United States, illustrate that the net impact on employment is positive.
Striking a better balance among transport modes requires greater investment in public transportation systems,
ranging from inter-city trains to trams, underground trains
and buses. Although the number of jobs in manufacturing
such vehicles is relatively limited, compared with those in
car and truck manufacturing, operating these systems offers large-scale employment opportunities and evidence
from around the world suggests that jobs in this field are
increasing.
In the aviation industry, although emission levels are
relatively low in comparison to say ground transportation,
they are rising rapidly. New aeroplane designs, fleet modernization and operational changes are needed to reduce
fuel consumption and investments for these purposes generate employment. Equally important as technological
change is upgrading the skills of air carriers’ workforces
both in passenger and freight transport.
Shipping contributes the smallest share of the transportation sector’s CO2 emissions, but energy efficiency
improvements are nevertheless important, given that shipping operations worldwide are projected to expand
strongly. A mandatory Energy Efficiency Design Index
will be introduced from 2013 but employment impacts
of this step remain to be assessed.
Skills upgrading and retraining efforts must be part of
any transition. Shifting vehicle manufacturing towards
greater reliance on hybrid and electric vehicles requires an
updating of skills in the industry’s workforce, though not
on an unmanageable scale. Likewise, producing flex-fuel
vehicles that can run on natural gas or biofuels does not
imply any large-scale alterations to the industry’s skill profiles. Improving fuel efficiency implies that new
technology and pieces of equipment will be added to vehicles, requiring new or upgraded skills, and therefore
training efforts.
Meanwhile, the skills required in rail and urban public
transport vehicle manufacturing are similar to those in
road vehicle manufacturing. However, it seems unlikely
that rail and transit manufacturing could be scaled up sufficiently – and quickly enough – to fully absorb workers
who are losing their jobs in a contracting motor vehicle
industry. Transition assistance for affected workers will be
necessary.
Certain regions are highly dependent on motor vehicle
factories and related employment. The success of any given
transition strategy will depend on the extent to which it
is informed by inclusive social dialogue. Combining government resources with business’s hands-on knowledge of
skill relevance and quality is essential, while bringing trade
unions and employers’ associations into the mix can augment the responsiveness of education and training and
trigger green transformation on a larger scale.
Many industrialized countries can provide evidence of
policies that are moving in the right direction, but a key
challenge will lie in reinforcing certain trends, such as continuing the shift towards greater fuel efficiency in
individual vehicles and increased emphasis on public transport systems. Developing countries, meanwhile, still have
an opportunity to leapfrog developed countries in a
number of instances to more sustainable transport systems.
More broadly, an affordable, green and efficient transportation sector will provide people with better access to
jobs and allow them to be more productive, while also
freeing resources for other purposes.
157
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Chapter 10
Policy measures to ensure
decent work and social inclusion
Main findings
● The chapter demonstrates that a shift to a green
economy can yield significant gains for workers, the
environment and the economy more broadly:
A range of country-specific studies covering
advanced, emerging and developing economies
indicate net job gains in the order of 0.5–2 per
cent, which would translate into 15–60 million
additional jobs globally. In the majority of
studies, environmental reforms are accompanied
by complementary government policies and
incentives, including tax credits, subsidies and
workers’ training and education.
The Global Economic Linkages (GEL) model
illustrates that an eco-tax would reduce emission
levels over the medium term and, if combined with
measures for job support, would raise multi-factor
productivity by 1.5 per cent by 2020 and by
5 per cent by 2050.
● The positive results hinge on the recognition that environmental and socio-economic challenges need to be
addressed in a comprehensive, complementary manner
(as is the case with environmental tax reforms or
ETRs). First, to support a more efficient and a sustainable use of environmental resources, a range of support
is necessary:
Market-based approaches like environmental taxes
and emission trading systems must be complemented by regulations, public investment and
support of research and development (R&D).
These measures need to take into account countryand sector-specific challenges. For example, in the
context of energy-efficient new buildings, regulations in the form of new building standards have
been proven to be successful.
The promotion and implementation of sustainable
production processes at the firm level will also be
needed. Importantly, policies which enable SMEs
to successfully navigate the shift to a greener economy and to seize the opportunities will be
critical. In this respect, environmental regulation,
research and development, as well as public
procurement policies, need to be mindful of the
needs and limitations of SMEs.
● Second, revenue collected through greening of the environment needs to be leveraged to support employment
and to facilitate the adaptation of workers – both
within and across sectors. In many instances this may
require augmenting the existing suite of programmes
as well as tailoring some measures to address challenges
unique to the greening of the economy:
Programmes such as job-search assistance, job
counselling, training and improved labour market
information will be necessary. Particular emphasis
on skills and education policies to facilitate job
transitions and improve employability will be
critical.
163
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
164
Income support and social protection measures
will be necessary to help limit the downside adjustment process for workers most likely to be affected
by the shift towards a greener economy (i.e.
low-skilled workers), notably in high-carbonintensive sectors. In addition, income support
measures, when accompanied by other measures
such training, can improve employability by
keeping workers tied to the labour market and
prevent skills erosion.
of a green transition simultaneously. Section C consequently provides a more detailed discussion of the labour
market and social policies to be applied in the context of
a green transition. Section D provides evidence of the positive employment effects from applying green policies.
Section E argues that putting social dialogue at the centre
of policy-making will ensure better and more sustained
outcomes.
In emerging and developing countries where active
labour market programmes are less developed,
well-designed social protection measures can help
to build rural productive capacity and improve
resilience. Such is the case of the large-scale
investments under the National Rural Employment Guarantee Act (NREGA) in India and the
Expanded Public Works Programmes in South
Africa. Both provide income support via access to
employment in environmental public works.
A. Facilitating environmental
change
● Finally, close cooperation between governments and social
partners will be central to the success of the shift to a
greener economy. In fact, well-informed and coherent
policies that result from broad support and active commitment among stakeholders will be essential to ensuring that the transformation is sustainable. Moreover,
the earlier the transition to sustainable development
and a greener economy starts, the more this transition
can be managed to avoid the economic and social costs
of disruptive change and to seize the opportunities for
economic and social development.
Introduction
Environmental and social challenges are inextricably
linked. Economic growth, job creation and incomes depend on – and can degrade – natural resources and
systems. However, they can also restore and enhance environmental sustainability. As such, they need to be
addressed together, in a comprehensive and complementary manner.
The purpose of this chapter is to highlight the necessary conditions, policy prescriptions and good practices
to achieve sustainable development from all perspectives.
In particular, section A discusses policy options for facilitating environmental change in a number of areas. Section
B shows how the policy mix can address all the dimensions
Most environmental damage is caused by market failures
and the fact that often consumers and producers do not
sufficiently consider the long-run negative consequences
of their acts (IILS and EC, 2011b). As such, coordinated
intervention from governments around the globe into
market processes is therefore required (IPCC, 2007). The
following section considers how various policy levers can
bring about environmental improvements, notably by
addressing and supporting: (i) sustainable use of the
environment; (ii) enterprises, especially SMEs; and (iii)
consumers.
1. Ensuring sustainable use of the
environment
A number of options to promote the sustainable use of
the environment exist and can be distinguished by: type
of instrument (e.g. tax instrument or regulation); the level
at which they are applied (e.g. macro-economy or
sector/industry level); and also by the policy objective (e.g.
the environment or the labour market) (box 10.1).
Market-based instruments like taxes and emissions
trading schemes alone will not be sufficient to address the
environmental challenges and need to be complemented
by other instruments such as regulations, and public support for R&D and investments. In particular, the policy
approach needs to take into account country- and sectorspecific challenges. For example, in the context of
energy-efficient new buildings, regulations in the form of
new building standards have been proven to be successful
and are widely accepted as the best option. Structural
change towards sustainable economies will also require
considerable technological advancement (as discussed for
example in the chapters on transportation, energy, build-
Chapter 10: Policy measures to ensure decent work and social inclusion
Box 10.1 Environmental policy instruments
Policy instruments available to address climate change and broader environmental challenges include regulations,
tax instruments, trading systems, public investment and procurement as well as R&D and technological innovation.
•
Regulations: include norms implemented and enforced by government institutions to directly influence the
behaviour of economic agents. In the context of environment protection, regulations usually refer to some type of
direct waste and pollution control, energy consumption restrictions, and limitation or prohibition of natural
resource exploitation, but also mandates such as minimum recycling rates or share of renewable energy
production. Regulations can also be designed to increase transparency and environmental awareness of
consumers. For example, mandatory ecolabels on products can inform consumers about the environmental
impact of their consumption decision.
•
Tax instruments: tax approaches aim to assign correct prices to environmental resources through quantity or value
taxes. Environmental taxes can target consumption and production (and inputs in production). They generally
increase the prices of natural resources or emissions and lead thereby to a more efficient resource use and
allocation. This can also include subsidies, as for example in the case of feed-in-tariffs that are heavily used to
promote the transition of the energy sector.
•
Trading systems: based on a certain quantity of acceptable pollution (such as CO2 emissions), which is first
broken down into smaller amounts and then securitized and traded on a market. Potential polluters pay for the
right to pollute by buying a certain quantity of certificates through a trading system. The market price of the
certificate allocates a value to the right to pollute and therefore creates an incentive to avoid pollution.
•
Public investment and procurement: public funds directed into green applications. Governments can influence
the market and encourage the private sector towards a green transition and overcome the problems of missing
private price signals. In this sense, public investment plays a complementary role to larger market-based
mechanisms. Governments can shift public investments from “brown” capital to “green” capital. Countries can
directly invest in the areas where the private industry is hesitant or unwilling to exert efforts, such as renewable
energy projects, green infrastructure or other low-carbon-intensive activities, especially for several high-polluting
sectors, like transport, energy or construction.
•
R&D and technological development: policy instruments that encourage R&D investment in the advancement of
green technologies, such as for R&D activities with regard to renewable energy generation and the replacement
of fossil fuel-based technology. The promotion of R&D towards green technologies could be achieved through
improving human capital and the innovativeness of research institutes.
2. Greening enterprises
involves the adoption of practices that are energy and resource efficient, low-waste, low-carbon and non-polluting,
so as to reduce enterprises’ environmental footprint.
Resource inputs represent an important production
cost for industries. Therefore, supporting enterprises to
improve eco-efficiency and resource productivity has the
potential to help boost their competitive advantage and
profitability, improve the sustainability of their growth,
and stimulate job creation. This can have ancillary positive
effects throughout the supply chain. As such, the greening
of enterprises can also lead to greater energy security and
reduced costs through increased productivity, thereby potentially contributing to poverty alleviation efforts,
notably in developing countries. In particular, policy tools
can include (see box 10.1):
As the previous chapters have demonstrated, in a number
of the key sectors the role of enterprises will be central to
achieving a greener economy. Broadly speaking, “greening
of enterprises” entails the promotion and implementation
of sustainable production processes at the firm level. This
● Market-based instruments (MBIs), such as taxes,
charges, tradable permits, and subsidies (see box 10.1).
They can stimulate incentives to favour technological
innovation and competitiveness, and hence the greening of enterprises. Existing subsidies on water, energy
ings and agriculture). In this context, the question arises
as to which policy instruments governments can implement to increase R&D activities and the extent to which
R&D should be public or private. Governments can provide attractive conditions for green R&D investments: by
establishing long-term price signals (for example green
taxes or feed-in tariffs); by maintaining an efficient system
of intellectual property rights; or by introducing tax deductibility for green R&D investments. They can also
provide direct financial support to private green R&D efforts and strengthen public research in that direction.
165
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
and raw materials which impede enterprises’ environmental efficiency can also be modified or reduced. Successful MBIs require, however, an efficient system of
monitoring, revenue collection and enforcement.
● Information-based instruments such as eco-labelling,
awareness-raising and public disclosure can also be efficient if used with other measures like environmental
taxes. The establishment of supporting institutions for
industries, assisting enterprises in meeting standards
and obtaining certifications, can equally be helpful.
● Regulatory instruments like norms, standards, abatement policies, and national/regional laws and regulations ensuring, for example, that biomass and other
renewable materials are produced sustainably.
166
● Procurement policies: for example, when purchasing
goods, governments could favour those product designs which are more environmentally sound.
● Voluntary initiatives can lower administrative and enforcement costs (when compared with regulatory instruments for instance).
By combining these policy instruments, governments
can support enterprises by creating an enabling environment in which the adoption of green workplace practices
is incentivized along with investments in new green products and services (De Gobbi, 2011; UNIDO, 2011).
Enterprises react often with innovation, which can bring
down overall costs.
An important dimension of greening enterprises is
the role of SMEs. Indeed, SMEs account for more than
two-thirds of all permanent employment and are an important resource consumer. They are also the biggest
source of new job creation and innovation. As such, their
role will determine how successfully the transformation
to a green economy will be, especially as regards employment and income distribution (Ayyagari et al., 2011).1
However, while larger firms have better access to information, internal human resources as well financial
resources and technology, this is often not the case for
SMEs. The creation and growth of SMEs is particularly
sensitive to access to information and to understanding
green markets, as well as access to skills programmes, technologies and finance. A study by GHK Consulting
(2009) of 15 enterprises in different European countries
1
An SME is defined as a firm with 250 employees for that study.
documents how larger firms are able to tackle environmental sustainability successfully. SMEs, on the other
hand, face many challenges in this regard (De Gobbi,
2011). They have far greater difficulties in compensating
for rising energy and raw material costs by improving
process and technology and in absorbing new environmental standards imposed by legislators and consumers.
This puts SMEs at an added disadvantage and carries the
risk of inadvertent structural change, which would slow
employment creation.
However, despite these challenges, all firms can and
should become sustainable enterprises as envisioned
by the conclusions of the 2007 International Labour
Conference (ILO, 2007). Nonetheless, policies which
enable SMEs to successfully navigate the shift to a
greener economy and to seize the opportunities will be
critical. Cooperatives, business associations and partnerships along value-chains can play an important role in
supporting SMEs to grow and become sustainable. In
addition environmental regulation, research and development, as well as public procurement policies, need to
be mindful of the needs and limitations of SMEs. The
key role of skills development in SMEs has been highlighted among others in the chapters on buildings and
agriculture for example. In particular in developing countries, the owners and employees in small businesses tend
to have insufficient business skills. Empirical analysis of
entrepreneurship training such as ILO’s Know About
Business (KAB) and Start Your Business (SIYB) can be
an effective way of addressing this, as pointed out in
Chapter 2 for smallholder farmers. Entrepreneurship
training can also be used to help small firms to identify
green business options and turn environmental challenges into new business opportunities, an approach
currently piloted with promising results in China and
East Africa.
3. Greening consumption
Changing consumption patterns can also play an important role in triggering a transition towards a green
economy. Consumer decisions and preferences can be influenced through prices and other incentives or
compulsory measures. Preferences for consumption patterns often evolve historically and are impacted by
sociological and cultural factors, for example through role
models and the adoption of the behaviour of others
(Veblen, 1899).
Chapter 10: Policy measures to ensure decent work and social inclusion
Behaviour can also be changed through regulations
and new standards, norms and conventions. As shown in
the chapters on buildings and transport, for example, standards for construction or the fuel efficiency of cars change
consumption patterns over time. Moral persuasion is another way to change preferences. This can be achieved
through greater consumer transparency (e.g. through ecolabelling) which is likely to lead to increased awareness
and greater environmental responsibility. Several successful applications of such practices have been
demonstrated in the chapters on agriculture, fishery and
forestry in which consumers have shifted their consumption patterns towards more sustainable products. These
changed preferences can thus lead to a higher willingness
to pay and encourage profit-seeking firms to invest in green
production facilities and to offer sustainable products and
services.
B. Linking environment and
labour through tax reforms
While the introduction of a green tax would improve environmental outcomes, some argue that it may dampen
employment prospects given that it imposes a cost to production. However, reducing environmental damage, while
improving labour market outcomes, is possible through
effective reforms of taxation systems coupled with job support. In fact, both ecological and socio-economic benefits
can be achieved simultaneously according to the so-called
double dividend hypothesis (DDH)2 if the right policy
mix is put in place.
1. Costs and benefits of environmental
taxation
Through adoption of environmental taxes, countries can
utilize the price mechanism to avoid further environmental degradation. A carbon tax, for example, puts a price
on the emission of CO2 and hence leads to a reduced
overall level of emissions. The avoided emissions constitute
a direct economic benefit for the global economy, since
future damage in terms of lower growth and lower employment is also avoided. But on the level of individual
enterprises, a carbon tax does not necessarily yield immediate benefits. In fact, a carbon tax (or any other
environmental tax) will entail on the one hand quantifiable
gross costs for certain industries today, notably those industries which currently over-emit CO2. On the other
hand, a tax yields sizeable benefits for other industries in
the future, with the balance in favour of a carbon tax. Yet,
the current policy debate has focused too narrowly on current costs, neglecting the larger benefits that can be
achieved in the future. This is why a carbon tax appears
as a rather unattractive tool for many policy-makers despite
its positive impact on global welfare.
According to the DDH, even immediate positive
socio-economic benefits are possible if environmental
policies are accompanied by appropriate measures that
mitigate possible negative consequences (box 10.2). The
idea is that a policy mix of environmental taxes and labour
market policies can lead to immediate increases in employment and improvements of the environment. The
most prominent example of how the DDH has inspired
actual political practice is the so-called environmental tax
reform (ETR).
Box 10.2 The double dividend hypothesis (DDH)
The DDH states that measurable economic benefits, and most notably employment gains, can be achieved while
at the same time improving the environment. The main idea is to use the taxation system to raise prices for those
production factors that have harmful consequences for the environment and society, and to decrease simultaneously
the cost of labour and capital. If properly designed, such a tax shift can boost overall employment creation, as
well as investment and innovation in environmentally friendly technologies.
Environmental tax reforms (ETRs) – also referred to as environmental fiscal reforms (EFRs) – constitute one concrete,
feasible and effective application of the DDH. ETRs go further than individual taxation measures as they entail a
shift in taxation on two fronts. The first involves introducing taxes on externalities, such as on CO2 emissions. Taxes
of this nature can reduce pollution and improve the environment by setting an incentive for enterprises to increase
their resource efficiency. Environmental improvements and the avoidance of economic costs of damage make up
the “first dividend”. The second element of ETRs involves using the revenue generated from these taxes to reduce
distortionary taxes elsewhere, in particular taxes on labour, thereby creating the “second dividend”.
2
See also box 10.2.
167
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Figure 10.1 Global productivity effects of using green tax revenues to support jobs (per cent)
6
5
4
3
2
1
0
2020
168
2030
2040
2050
Note: The figure shows the increase in multi-factor productivity which is estimated to arise as a result of the use of revenues from green taxes
(equivalent to 1 per cent of GDP) entirely to reduce labour taxes.
Source: Bridji et al., 2011.
Taxing polluters generates revenues that can be leveraged to reduce other (distortionary) taxes, for example
taxes on labour. These reductions can lead to higher labour
demand and higher employment, while using less energy.
It can also lead to higher productivity gains. In particular, if an eco-tax equivalent of 1 per cent of GDP were
introduced in 2012, and labour taxes were simultaneously
reduced by the same amount, multi-factor productivity
would be 1.5 per cent higher in 2020 compared with the
case in which green taxes are not used to support employment (figure 10.1). Moreover, by 2050, multi-factor
productivity would be 5 per cent higher.3 The rationale
behind this result is that lower labour taxes boost employment, in turn stimulating potential output and
creating new investment opportunities. The latter paves
the way for improved technology and productivity
growth (see Romer, 1990 and Bridji et al., 2011, for technical details of how a growth effect can occur from a
once-and-for-all increase in green taxes combined with
lower labour taxes).
In essence, policy-makers can create a budget-neutral
tax scheme in which benefits accrue to the environment,
the economy and society. Apart from reducing labour
taxes, other, new policy approaches to achieve a double
dividend in terms of employment can also be leveraged,
3
The authors are grateful for the analysis on productivity provided
by Stefan Kühn of the International Institute for Labour Studies.
for example, if tax revenues are used for skills development
or to improve social protection (see section C).
2. ETRs: The case of industrialized countries
The theoretical considerations of the DDH have led to
the implementation of ETRs in several countries, mostly
in the European Union (EU). Currently, most ETRs in
developed countries focus on achieving a reduction of the
private consumption of energy, and on private transportation (see figure 10.2). Production processes are much less
covered by these ETRs. Indeed, it is estimated that in the
EU for instance, about three-quarters of environmental
tax revenue arises from energy taxation (Eurostat and
European Commission, 2010). The remaining 25 per
cent are taxes on transport, pollution and resources.
The theoretical ideal of ETRs, namely to tax pollution
and to utilize the revenues to reduce labour costs, has
been achieved to varying degrees in these countries (see
table 10.1). The most common scheme has been to levy
quantity taxes or ad valorem taxes on the consumption
of energy, in particular on energy consumption of households. Denmark, Finland and Sweden have introduced
CO2 taxes, thus directly taxing pollutants instead of energy in general. In terms of redistribution of revenues,
most countries chose to reduce income taxes or social security taxes.
Chapter 10: Policy measures to ensure decent work and social inclusion
Figure 10.2 Environmental tax revenue in the EU, 2008 (million euros)
60,000
Energy
50,000
Transport (excl. fuel)
Pollution/Resources
40,000
30,000
20,000
10,000
0
Denmark
Germany
Netherlands
Finland
Sweden
United Kingdom
Source: IILS estimates based on Eurostat.
Table 10.1 Some examples of ETRs implemented in the EU
169
Country
Type of taxes
Utilization of ETR revenue
Denmark
• CO2 tax on energy products consumed
by households (1992) and businesses (1993)
• Special tax provisions for industry with
possibility of refunds
• Provision of investment grants for energysaving measures
• Reduction of marginal tax rates on personal income
• Reduction of employers’ contribution to social security
contributions
• Establishment of special fund for SMEs that would only
marginally benefit from reduction of social security
contributions
Finland
• CO2 tax on energy products except for transport fuels
• Landfill tax
• Reduction in state and local personal income taxation
• Reduction in employers’ social security contributions
Germany
• Increase of mineral oil taxes in transport fuels
• Taxes on: gas, heavy fuel oil, light heating fuels,
electricity
• Special tax provisions for certain industries
(manufacturing, agriculture, forestry
and fishery sectors)
• Intended to be revenue neutral but temporarily also
used for budget consolidation
• Reduction of employers’ and employees’ social security
contributions
Netherlands
• Taxes on energy and CO2
• Tax-free allowance (natural gas and electricity)
• Reduction of personal and corporate income taxation
• Special tax provisions for industry
Sweden
• CO2 tax, SO2 tax, N2O charge, value-added tax
(VAT) on energy purchases
• Energy taxes are indexed to inflation and linked
to Consumer Price Index (CPI)
• Until 1992: no special tax provisions for companies but
tax ceiling of 1.7 per cent of sales values for energy taxes
• After 1992: special tax provisions for certain industries
• Intended to be budget neutral in the long run but deficits
accepted in the short run
• Reduction of personal income tax rates for all income
earners
United Kingdom
• Heavy taxation of transport fuels; landfill tax
• Introduction of Climate Change Levy (CCL)
• Special tax provisions for industry
• Revenue from Fossil Fuel Levy: from subsidization
of nuclear power to renewables
• Reduction of employers’ national insurance contributions
• Subsidies of investment in energy and research activities
Slovenia
• Until 1997: VAT on energy products
• After 1997: all ad valorem taxes abandoned (except
for transport fuels that were abolished in 1999)
• Introduced a CO2 tax in 1997
• Increase in the number of taxable energy products
• Tax revenue not recycled, although plans were created in
2004 for one-third of revenue to co-finance investments
in energy efficiency and emissions reduction. Revenue
from other environmental taxes are generally earmarked
for specific environmental investments
• Businesses may be eligible for tax reductions up to 100
per cent, decreasing by 8 per cent per annum until 2009
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
3. ETRs: The case of emerging and developing
economies
Several developing countries have also moved towards the
adoption of environmentally related taxes over the last two
decades. This has been the case in China, India, the
Russian Federation, Sri Lanka and South Africa. However,
the measures introduced to date have for the most part
been individual ones, and it seems that comprehensive tax
reforms have not yet occurred (table 10.2). In particular,
measures to support employment via revenue from these
taxes are limited, which makes the achievement of a double
dividend more difficult.
Furthermore, current environmental tax rates in developing countries are comparably low. As such, there is
thus little revenue to be distributed. The potential benefits
of more comprehensive reforms are complicated by the
fact that labour market institutions and social protection
systems are often lacking, notably in developing countries,
and a considerable portion of employment occurs in the
informal labour market. Nevertheless, ETRs can be part
of a development strategy in which social security systems
are built up. In a 2005 World Bank report4, it was stated
that “Environmental Fiscal Reform (EFR) can . . . help
countries raising revenues, while creating incentives that
generate environmental benefits and support poverty reduction efforts. EFR has the potential to free-up economic
resources and generate revenues that can help finance
poverty reduction measures.”
Table 10.2 Some examples of ETRs and environmental taxes in developing countries
170
Country
Description
Assessment
China
• Currently, no integrated environmental and
natural resource pricing and taxation framework
• No single tax in the current system can be labelled
“environmental tax”(rather “environment-related taxes”)
• 1994 reform established a tax-sharing system
• Taxes on: resource extraction (coal, petroleum,
natural gas, urban land use and salt); consumption
(petrol, diesel, aviation kerosene, disposable wooden
chopsticks, tobacco, etc.); vehicles (private but also
public and for farm-use transportation); urban
construction and maintenance (items subject to VAT,
CT and/or business tax); land use
• 1994 reform simplified tax structures, taxation regime,
increased efficiency and transparency
• Environment-related taxes are governed by multiple
government agencies, and thus are subject to
government discretions at different levels, which leads
to a lack of consistency and compliance with laws and
regulations
• Charged rates are low, providing limited incentives for
polluters, who prefer to pay the charges to investing in
pollution reduction
• Overall, the environmental tax regime has been
not very successful
India
• Individual measures
• Weak penalties for firms that do not comply
• In July 2010, nationwide carbon tax of 50 rupees/metric
tonne for coal (produced and imported) introduced
Russian Federation • Individual measures
• 98% of environmental tax revenue from energy
and transport sector
• Currently not possible to assess
Sri Lanka
• No coherent policy strategy (individual measures)
• Taxes on: transport (fuels, imports); energy sectors
(most targeted by environmental taxation legislation);
electricity and water supplies (priced using an inverted
block tariff system)
• Legislative framework in place but implementation,
enforcement and collection of these taxes is relatively poor
• Most revenues raised by environmental taxes – in 2005,
10.6% of total tax revenues and 1.6% of GDP –
recycled in the form of subsidies
South Africa
• Individual measures
• Taxes and charges on: transport fuels; vehicles;
electricity sales (free or reduced-price for low-income
households); road users (levied by municipalities);
water (subject to VAT at the standard rate); plastic
shopping bags (implemented in June 2004)
• At its current level, the levy on plastic shopping bags –
to date the only waste-related tax – does not really
incentivize changes in consumer behaviour
Turkey
• Not managed to accomplish ETR yet; nevertheless
some arrangements for this purpose in tax laws
• Highest tax rate on petrol of OECD countries
• Third among OECD countries in terms of revenue
from environmental taxation as a percentage of GDP
• As most low-income households do not own a car, the
high tax rate on petrol has a progressive impact on
overall income distribution
• Revenue from environmental taxation has grown from
1.8% of GDP in 1998 to 3.3% in 2008, reaching almost
15% of total tax revenue
Sources: National offices of taxation.
4
World Bank (2005).
Chapter 10: Policy measures to ensure decent work and social inclusion
4. Conditions and challenges for a successful
implementation of ETRs
Based on preliminary lessons of existing ETRs, a number
of deficiencies in the current approaches can be identified.
For instance, most developed countries have created special tax provisions for certain energy-intensive industries.
Originally, they were implemented to avoid any abrupt
shocks to the economy, by supposedly protecting the competitiveness of these industries. However, they have
undermined the original purposes of many ETRs. The
largest potential for CO2 emissions reduction is in the
production sector and mainly in those industries that
have been granted special tax provisions. Indeed, approximately 80 per cent of the CO2 emissions of industrialized
economies are emitted through production activities and
only about 20 per cent result from direct household consumption (heat, petrol, etc.).5
Similarly, in developing countries, one of the biggest
challenges for ETRs to be efficient is the removal of subsidies, in particular in the field of energy and fertilizer
subsidies. For example, countries like Venezuela, Iran,
Indonesia, Egypt, Tunisia and Malaysia pay – partly indirectly – subsidies for motor fuels in the range of 2–8 per
cent of all their tax revenues (Metschies, 2003). Fossil fuels
currently receive US$312 billion (2009) in consumption
subsidies, versus US$57 billion (2009) for renewable energy (IEA, 2010). In addition, the current emphasis on
the use of VAT taxes on private consumers of energy places
a greater burden on low-income households.
Moving forward, the extent to which a double dividend may be realized will depend on several factors,
including: (i) the structure of existing tax systems; (ii) the
degree of coordination across regions; (iii) the manner in
which firms respond to ETRs; and (iv) how issues related
to any distributional impacts are addressed.
First, countries’ existing tax systems must not already
be revenue-optimal and should have in place an effective
tax administration in order to enforce taxpayer compliance
and to ensure the revenues are appropriately collected and
redistributed.6 In other words, ETRs should be able to improve the currently existing tax system by removing
distortionary taxes. In addition, given that natural resource
endowments, environmental and pollution problems, tax
systems and administrative capacity vary widely across
countries, different aspects of ETRs are more suitable for
some countries than others.
Second, for environmental impacts which have significant spill-over effects such as greenhouse gases
(GHGs) or overfishing in high seas or the pollution of
oceans, coordination across regions in terms of tax implementation will determine the extent to which such
measures are effective in reducing environmental degradation. In fact, many concerns about competitiveness
could be allayed if ETRs were to be implemented and
harmonized globally.
Third, how firms react to the economic incentive provided by the tax will determine the extent to which the
measures are effective in improving environmental outcomes. For example, tax rates that are too high might
increase incentives for firms to evade them but if they are
too low, they may not generate enough revenue or incentives to transition to greener practices. This is also true
with respect to innovation and investments in technology
by firms. In fact, the Porter hypothesis7 claims that a carefully implemented, gradually increasing tax generates an
incentive for technological innovation and thereby increases competitiveness.
Finally, special attention needs to be drawn to the fact
that there are important distributional implications related to the implementation of ETRs. For example,
environmental taxes tend to hit low-income households
harder as they spend a higher proportion of their income
on energy, and quantity taxes on energy result therefore
in a higher burden (see also Chapter 1). In addition, recycled revenue to support employment and social
protection needs to be targeted towards those most impacted by the transformation, while recognizing that
certain groups may not benefit from ETRSs directly, thus
altering the even distribution of costs and benefits (see
also Blobel et al., 2011).
In order to address distributional concerns, policymakers have several options. ETRs themselves can be
designed in a manner that takes distributional aspects into
account. For example, tax or energy allowances can be
introduced in the course of ETRs which allow for taxfree minimum consumption standards. Alternatively,
environmental tax rates could be designed progressively,
that is, with higher rates for high-income households.
Another option is to use classical social policies and to
increase redistribution of income to those groups which
are unintentionally and disproportionally affected by
ETRs.
5
Calculations made by the IILS.
Countries should also not be at full employment (OECD, 2004).
Both conditions (non-revenue optimal tax systems and involuntary
unemployment) are currently met in a large majority of countries.
6
7
Named after Harvard economist Michael Porter.
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
C. Labour market and
education policies for
a successful transition
As discussed above, the full realization of the double dividend requires that adequate attention be given to the
employment and social dimensions of the shift towards a
greener economy. In this respect, this section details the
effective labour market and social policies, coupled with
well-designed education policies, that will be crucial to
smooth the transition for workers.
1. Reinforcing and tailoring existing active
and passive labour market policies
172
The existing suite of active and passive labour market
policies can play a significant role in helping to facilitate
employment adjustments. In many instances this may
simply require augmenting the existing suite of active
labour market programmes such as job-search assistance,
job counselling, training and improved labour market
information. This would reinforce the adaptive capacity
of the labour market, and not just in the context of a
green economy. In developing countries, however, as discussed above, programmes of this nature are still limited,
and efforts to develop strong labour market institutions
are thus needed.
Similarly, well-designed income replacement and
social protection measures such as unemployment insurance – where they exist – have the potential to cushion
the negative effects implied by a green transition, while
at the same time boosting future employment
opportunities. In particular, income support can be
provided to families to take care of the household’s basic
needs until employment is found. Moreover, income support measures, when accompanied by other measures
such as training, can improve employability by keeping
workers tied to the labour market and prevent skills
erosion.
In some instances, bolstering the existing suite of programmes may be insufficient and a degree of tailoring
will be required – this is particularly relevant given the
fact that challenges are often sector-specific.8 This is al-
8
Programmes must also be tailored to match the needs and address
the challenges of jobseekers.
ready beginning to take place. For example, the Flemish
public employment service has developed a “sustainable
building” competency centre in East Flanders. In addition to practical skills training, like learning how to build
eco-efficient heating, the centre also intends to match
workers and engineers with green building skills to demand in the construction sector.9 Similarly in Morocco,
the public employment service ANAPEC is managing
the recruitment process for major green construction
works to improve the infrastructure in the country.
Filling 300–400 vacancies to build roads and water channels, for example, requires skills matching and
development for high, semi and lower profiles.10
In emerging and developing countries where active
labour market programmes are less developed, well-designed social protection measures can help to build rural
productive capacity and climate resilience. Such is the
case of the large-scale investments under the National
Rural Employment Guarantee Act (NREGA) in India
and the Expanded Public Works Programmes in South
Africa. Both provide income support via access to employment in environmental public works. More broadly,
the value of social protection floors in attenuating the
economic shocks to individual households and the wider
economy has been well documented (ILO, 2011). The
same mechanisms at work in periods of crisis can also
facilitate green transitions, for example by protecting redundant workers as they look for new opportunities or
undergo retraining. They can be an important part of a
package of measures that help the poor in developing
countries affected by climate change.
As highlighted in the analysis presented in previous
chapters, skills training is one of the areas that will require
considerable attention and tailoring. Indeed, employment transitions within and between enterprises, and
within and between industries are generally accompanied by changing skill requirements and occupational
profiles.
2. Skills training and education measures
Broadly speaking, a mismatch of skills between vacancies
and job searchers can increase unemployment and lead
to under-utilization of an economy’s output potential –
both critical issues at a time when the global economy
9
See the World Association of Public Employment.
Ibid.
10
Chapter 10: Policy measures to ensure decent work and social inclusion
continues to recover from the financial and economic
crisis that began in 2007. Workplace training to address
changes in production processes will be a key element of
the skills strategy. In addition, some workers may need to
transition to other sectors, including new greener industries and therefore there is a need to provide retraining
and upskilling to enhance their chances of taking up new
employment.
The extent of skills and occupation transition will very
much depend on a number of factors including countryspecific industrial structure and stage of development.
Nevertheless, some important lessons and considerations
should be taken into account when developing a skills
strategy, notably:
● Skills and training adjustment will occur principally
among resource- and carbon-intensive sectors: As Chapter 1 highlighted, workers in resource-intensive sectors
tend to have lower skill levels on average and may require the most retraining. Successful examples of initiatives in skills retraining practices already exist (table
10.3). In France, the region of Aquitaine provided
funding for upgrading the skills of those in traditional
automobile industry occupations (e.g. electricians and
welders) to be able to take up employment related to
wind-turbine production (Strietska-Ilina et al., 2011).
Brazil has developed several initiatives to retrain workers formerly employed in manual cutting of sugarcane
which requires the highly polluting burning of fields
prior to harvest. Burning has been progressively banned
and workers are being trained and relocated to both
better job opportunities within their own plants and
in other segments of the economy. Another example is
the transition scheme for forest workers in China,
which also included entrepreneurship training and help
for redundant workers to start new businesses (see also
Chapter 3).
● Targeting initiatives towards the environmental goods
and services sector (EGSS): The expansion of the EGSS
will create new demands for a variety of skill profiles.
For instance, in several countries, skills gaps in the renewable energy sector have been identified, particularly
for skilled technicians, managers and operators. These
gaps are recorded in the biofuels industry in Brazil, renewable energy and environmental industry in
Bangladesh, Germany and the United States, and in
construction in Australia, China, Europe and South
Africa. Other skills gaps are present in the areas of
knowledge on sustainable materials, skills in measuring
carbon footprint and in environmental impact assess-
ment (EC, 2012). The wind energy sector offers an example of good practice with regard to adapting to new
skills needs. Despite initial labour shortages, the wind
energy sector has hired employees from other sectors
and then offered a variety of training programmes to
remedy the lack of supply for specific skilled workers
(IILS and EC, 2011b). In Spain, the regional government of Navarra managed to convert the region from
a traditional car manufacturer into Europe’s sixth
largest producer of wind power, and to create and
provide training for over 6,000 jobs in this sector (see
Chapter 5).
● Ensure that education systems are responsive to the development of new technologies and changing skill requirements: Changing skill and education requirements can
occur in industries and enterprises which are indirectly
affected by the green transition via input–output links.
If supply chains of “green” enterprises change and certain inputs are more highly demanded, the production
processes of other enterprises will also change. For example, advice on carbon auditing and low-carbon technologies for enterprises could expand considerably. The
challenge will be to ensure that future generations, notably youth, have the appropriate education as well as
skills and competencies to take advantage of the opportunities presented by a greener economy.
173
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Table 10.3 Successful examples of skills upgrading and training schemes
Country
Description
Outcomes
Australia
• Green Plumber® qualification: established in
2000 by employers and trade unions to train
plumbers for saving water and energy in buildings
• By 2010, over 9,000 plumbers trained
• Programme expanded to New Zealand and the United
States where California has purchased a licence for up to
40,000 trainees
Bangladesh
• Technical training programmes for installation
and maintenance of solar home systems (SHSs)
established in about 50 Green Technology Centres
(GTCs)
• Around 5,000 women instructed in proper usage of
SHSs; more than 1,000 female technicians trained to
assemble, install, and maintain them
• The GTCs are run by female engineers
• 1.2 million units installed
Brazil
• Government has provided technology transfers
• Some 7,000 workers annually retrained for a range of
and trainings for forest workers and owners
occupations, including drivers, farm-machine operators,
• Retraining programmes also launched by the Brazilian
electricians, tractor mechanics, beekeepers, and forest
Sugarcane Industry Association (UNICA) and other
workers
employers in 2009
China
• To support the 2002 Afforestation scheme,
government organized training programmes
for redundant forest workers and local farmers
who lost their jobs due to the ban on logging
• Training includes: entrepreneurship and
establishment of green businesses; skills
improvement in plantation and irrigation; new
technologies application; and sustainable forest
management
• These training programmes have contributed to 276,000
laid-off workers finding alternative employment
Kenya
• ILO developed partnerships with green business
innovation network ENABLIS, and Junior
Achievement (a business organization offering
basic economic education for high-school students)
• 60 aspiring youth entrepreneurs trained in business
skills relevant for renewable energy development
Singapore
• Government launched Workforce Skills
Qualifications (WSQ) Graduate Diploma in Process
Technology & Sustainable Manufacturing, improving
educational capacity in energy-related subjects
• In 2007, approximately 67,500 workers had their skills
certified
South Africa
• Basic Employment and Skills Training Programme:
enabling youth to build their own house and acquire
construction skills
• High participation of young people thanks to
government grant
Spain
• Environmental Training Plan implemented by
regional government of Navarra (2002): Training
Centre for Renewable Energy (CENIFER) set up
according to identified skills shortages
• In 2006, the country’s first graduate programme for
electrical engineers in wind and solar energies
launched
• 2002–06: employment in renewable energies across
Navarre increased by 183%, unemployment dropped to
4.7% (lowest level in Spain)
• In 2007 alone, 100 companies and over 6,000 jobs in
renewable energies created (of which only 18 per cent
are low-skilled)
United States
• Green Jobs Advisory Council set up to develop
• American Recovery and Reinvestment Act of 2009:
green job training
about 8,000 participants have been placed into
• Clean Energy Workforce Training Program
employment
(California, 2009) to help unemployed construction
workers, workers requiring retraining, low-income
wage earners and youths seeking to enter the workforce
• American Recovery and Reinvestment Act of 2009:
provided $500 million for labour exchange and job
training in energy efficiency, renewable energy and
other sectors
174
Source: Strietska-Ilina et al., 2011.
Chapter 10: Policy measures to ensure decent work and social inclusion
D. Evidence of positive
employment effects
from green policies
Most studies that have investigated the net impact on employment of environmental policy measures suggest
positive – albeit limited – net employment gains. At the
global level, for instance, if a price on CO2 emissions was
imposed and the resulting revenues were used to cut labour
taxes, then up to 14 million net new jobs could be created
(IILS, 2009).
OECD (Chateau et al., 2011) has simulated an illustrative emissions reduction scenario with a cross-country,
multi-sector general equlibrium model (ENV linkages) to
assess impacts on growth, employment and incomes in
OECD countries. If the revenue from an emissions trading
scheme is not recycled in an economy where wages do not
adjust fully to falling demand, growth and employment
would fall by up to 2 per cent. By contrast, an environmental tax reform which recycles the revenue to reduce
the cost of labour would in a moderately 'rigid' labour
market would increase OECD employment by 0.8 per
cent above the business as usual levels by 2030 while maintaining real incomes. The shift would lead to pronounced
job losses in fossil fuels and gains in renewable energy, but
the overall impact on the sectoral composition of employment is less than 1 percent of all jobs in the OECD and
Europe. This compares to job reallocations in the OECD
of 20 per cent from 1995-2005.
Country-specific studies point, by and large, in the
same direction. The results depend, not surprisingly, on
the policy measures taken, the methodological approach,
country-specific circumstances and the data used in the
analysis (table 10.4). Yet, in the majority of studies, environmental reforms are accompanied by complementary
government policies and incentives, including tax credits,
subsidies and workers’ training and education. As such,
by complementing environmental reform with labour
market and social policies, the studies reveal that any negative effects of environmental reforms are offset and the
net impact on employment is positive – substantiation of
the double dividend hypothesis. The main results from
the country and regional studies are as follows.
Australia
The Australian Conservation Foundation (ACF) and the
Australian Council of Trade Unions (ACTU) commis-
sioned an economic modelling exercise to assess how to
best protect jobs across all regions of Australia under the
impact of climate change and climate-change policies
(ACF and ACTU, 2009). The model assesses the effects
of two different approaches – a “weak action” scenario
and a “strong action” scenario. The weak action scenario
is a “markets only” approach. It assumes a price on greenhouse pollution (using an emissions trading scheme) as
the sole instrument to reduce Australia’s pollution levels.
The strong action scenario is a “markets plus” approach. It
assumes a price on greenhouse pollution (using an emissions trading scheme) along with a targeted suite of
complementary policies to reduce greenhouse pollution
domestically. The study reveals that both methods not
only reduce CO2 emissions, but also slightly increase employment by 1.5 per cent over business as usual. Another
study commissioned by the CSIRO Sustainable
Ecosystems draws on two different economic models to
explore the potential effects of GHG and energy reductions on green collar employment (Hatfield-Dodds et al.,
2008). The first approach is based on a “physical economy”
model (ASFF model), to assess a “Factor 4” (quadrupled)
resource efficiency scenario. This scenario explores the
types of changes in the economic structure, resource-use,
economic efficiency and employment associated with energy-reduction policy settings. The second approach is a
general equilibrium (CGE) model, based on a “monetary
economy” approach. Despite major differences between
the two models, both show that the transition to a lowcarbon economy would lead to a substantive increase in
national employment. The CGE model projects that
around 2.5 million jobs will be created by 2025. The ASFF
modelling draws on high-immigration scenarios, and projects employment to increase by 3.3 million over the next
20 years, and 7.5 million by 2050. In particular, employment in key emitting sectors –manufacturing, transport,
agriculture, mining and construction – will increase by
around 12 per cent over a period of 10 years, adding
230,000–340,000 new jobs in addition to normal employment turnover. In low-emitting sectors, including
finance, communications and public services, employment
will grow even more strongly – between 15 and 17 per
cent over a period of 10 years.
Brazil
A 2010 study by the World Bank finds that by adopting
a low-carbon development path including avoided emissions from land-use change (reducing pasture areas and
protecting forests) energy efficiency and renewable en-
175
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
ergy, the GDP of Brazil would grow 0.5 per cent per year
above the business-as-usual scenario between 2010–30,
while employment would be expected to increase 1.13
per cent annually over the same period.
China
176
The employment outlook for China in view of the ambitious targets for improvement of energy efficiency has
been reviewed in the Global Climate Network (GCN)
Report (2010).11 The study for China emphasizes the potential employment losses from the planned sharp
reduction in the energy intensity of Chinese industry, but
argues that this has already been more than offset by increased employment in the renewables and the important
shift of the Chinese economy towards services and away
from heavy industry, which, however, cannot be seen as
purely “green”.
European Union
A study produced by GHK Consulting (2011a) estimates
that if a “green EU budget” were realized over the period
2014–20, investing 14 per cent of the total budget in four
green sectors (renewable energies, environmental conservation, energy savings in buildings and sustainable
transport) could create more than half a million jobs on
a net basis. Shifting investment from current patterns to
green sectors could increase job creation per euro by a
factor of three (320 per cent). This potential is significant,
especially when compared with the number of jobs generated by the two main current EU policies – the
Cohesion Policy and Common Agriculture Policy
(CAP) – which make up almost 80 per cent of the total
EU budget (GHK Consulting, 2011a).
The Cambridge Econometric E3ME model uses a
top-down, macro-economic approach to study the competitiveness effects of a carbon tax at the European level
(Skou-Anderson and Ekins, 2009).12 The E3ME model
analyses the short- and long-term effects of price and wage
rate changes across six sectors in six different EU countries.
By assuming that an induced carbon tax would lead to an
increase in energy prices, the model illustrates that such a
policy would lead to a reduction in the demand for energy
and ultimately, to a reduction in carbon emissions. The
11
The report also covers India, South Africa, Brazil and Nigeria, along
with some developed countries but in a less comprehensive manner.
12
The study covered Denmark, Finland, Germany, the Netherlands,
Sweden and the United Kingdom.
largest emission reductions occur in countries with the
highest tax rate. Moreover, all six countries witness an increase in GDP and national employment, despite some
negative short-term transition effects. In some countries,
employment even increases by as much as 0.5 per cent.
A study of an environmental tax reform in the EU
with the Hermes model, a one-dimensional multi-year
model covering the entire EU, found that increased energy
prices and subsequently lower labour costs led to a 0.6 per
cent increase in employment and 4.4 per cent decline in
CO2 emissions. Likewise, the Quest (Quite Useful
Ecosystem Scenario Tool) – an environmental sustainability model which does not account for energy in
production – found that increased energy taxes led to a
1.3 per cent increase in employment and 8 per cent decline
in CO2 emissions over the period 1990–2010.
Policy simulations carried out for the European
Commission by the Institute of Economic Structures
Research (GWS), Cambridge Econometrics, the Sustainable Europe Research Institute (SERI) and the Wuppertal
Institute for Climate, Environment and Energy (WI)
demonstrate that the EU could realistically reduce the
total material requirements of its economy by 17 per cent,
thereby boosting EU GDP by up to 3.3 per cent while
adding between 1.4 and 2.8 million jobs compared with
business-as-usual. Every percentage point reduction in resource use could therefore lead to up to 100,000–200,000
new jobs (GWS, 2011).
Germany
In Germany, the most comprehensive studies on the employment effects of environmental fiscal reforms were
carried out by Bach et al. (2002) and Frohn et al. (2003).
Using two macro-sectoral models (respectively PANTA
RHEI and LEAN) and a micro-simulation model, the authors assess the introduction of energy taxes and the
subsequent subsidization of labour taxes.
Bach et al. projected that an ETR, the introduction of
energy taxes and the recycling of tax revenue to subsidize
social security contributions levied on labour would result
in an increase in employment by 0.55 per cent and a 2 per
cent decrease in CO2 emissions between 1999 and 2010
(IILS, 2009). A slight drop in GDP (0.1 per cent) is also
estimated, but in the long run, estimates show that the
substitution of labour for capital could outweigh the negative effect of a contraction in GDP.
These results are confirmed by Frohn et al. (2003),
whose scenarios also find slight positive employment effects and a small reduction of emissions. While the
Chapter 10: Policy measures to ensure decent work and social inclusion
employment increase did not react very strongly to an increase in the tax rates and the abolishing of eco-tax
exemptions, CO2 emissions fell more sharply in such scenarios.
Similar to the Quest and Hermes models, the PANTA
RHEI model assesses the employment effects of ETRs
and CO2 reduction, and found that slight increases in employment accompanied reduced levels of CO2 emissions.
These studies concluded that imposing the ecological tax
is one of the most effective green policy instruments because it has positive impacts on energy efficiency, climate
protection and employment. According to the Research
Project commissioned by the German Federal
Environmental Agency (UBA), undertaking the ecological tax reform created 250,000 jobs over the period
1999–2003, particularly in labour-intensive sectors.
Moreover, fuel consumption and CO2 emissions have
been reduced by 7 per cent and by 2–2.5 per cent, respectively (Robins and Singh, 2009).
Mauritius
A study of existing and potential green jobs in Mauritius
was carried out by the ILO in 2012 at the request of the
Government in order to inform the national development
strategy “Mauritius – a sustainable island”. The assessment
considered both jobs in sectors with green outputs and
green processes, in particular in relation to efficient use of
energy and water. It concluded that existing employment
in agriculture, manufacturing, hotel services and energy
amounted to 6.3 per cent of total employment in 2010.
Based on the analysis of a detailed and up-to-date input–
output table, the assessment shows that greening these four
priority sectors for national development would consistently generate more employment and in agriculture and
energy also higher output. Employment gains range from
plus 5 per cent (and plus 7 per cent output) in agriculture
to plus 67 per cent in manufacturing and services (for
minus 3 per cent and unchanged output respectively), to
plus 75 per cent for (renewable) energy (output plus 75
per cent). The gains are mostly explained by higher energy
efficiency and stronger backward linkages through the substitution of imported fossil fuels.
South Africa
A multi-disciplinary research team from the Industrial
Development Corporation, the Development Bank of
South Africa and Trade & Industrial Policy Strategies, de-
veloped a methodology to estimate the employment creation potential of a progressively greening economy. The
analysis reveals that the transition towards a green
economy could lead to 98,000 direct jobs in the short
term (2011–12), 255,000 in the medium term
(2013–17) and 462,000 additional new employment opportunities in the long term (2018–25). While indirect
job creation is not considered in this study, the authors
argue that indirect employment could rise proportionally,
particularly in sectors such as manufacturing, and natural
resource conservation.
Rutowitz (2010) also carries out a detailed analysis of
employment opportunities from a switch towards renewable energy and greater energy efficiency in South Africa.
Different scenarios are considered and job losses in the
coal industries are incorporated into projections. A business-as-usual scenario from the International Energy
Agency (IEA) is compared with (i) a national Growth
Without Constraint (GWC) scenario designed to reflect
South Africa’s energy future in the absence of climate
change, and (ii) an Energy Revolution scenario designed
to reduce South African GHG emissions by 60 per cent
by 2050 (compared with 2005). The author finds that the
Energy Revolution scenario creates 27 per cent more jobs
than the IEA reference scenario and 5 per cent more than
the GWC scenario. One caveat is that macroeconomic impacts and opportunity costs are not considered. Yet, the
costs of job generation could be substantial once macroeconomic consequences are taken into account.
Republic of Korea
The Republic of Korea has drawn up a Five-Year Plan to
facilitate the transition toward a green economy and cut
carbon emissions by 20 per cent within 5 years under the
coordination of the Ministry of Foreign Affairs and Trade
with support from the Asian Development Bank and the
Global Green Growth Institute (GGGI). Employment
models analyse public investment of KRW 107 trillion
(US$ 97 billion), almost 2 per cent of the country’s annual
GDP, between 2009 and 2013 to support green growth
initiatives. The models also utilize adaptation targets in
health management, food security, water and coastal
management, climate disaster prevention, and forest protection. Through such a large public investment package,
the study reveals a positive hiring effect of 11.8–14.7
million new jobs. Additionally, through the creation of an
energy rating system, fuel efficiency grade indication
system and new technology, the model estimates that
1.18 million jobs could be created by 2020 (GGGI, 2011).
177
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Table 10.4 Evidence of employment effects of a greener economy
Country
Source
• Model: cross-country, multi-sector general equlibrium model (OECD ENV linkages)
assessing net effects of climate mitigation policy with and without recycling of revenue and
for different levels of 'labour market rigidity'. Environmental tax reforms (use of revenue to
reduce labour cost) leads to +0.8 per cent employment compared to baseline by 2030 and
relocation of jobs between sectors of less than 1 per cent."
OECD countries
Australia
Model and employment effects
ACF and ACTU (2009)
• NIEIR model: emissions trading system – EMS – coupled with government incentives
would create an additional 770,000 jobs by 2030 relative to the “solely EMS” scenario
Hatfield-Dodds
et al.(2008)
• CGE model: reductions in GHG emissions of 60–100% by 2050; 2.5 million jobs
created by 2025
• ASFF model: “Factor 4” resource efficiency scenario; employment increasing by
3.3 million over the next 20 years, and 7.5 million by 2050
Brazil
de Gouvello (2010)
• BLUM & SIM models: by reducing pasture areas and protecting forests, employment
expected to increase by 1.13% annually between 2010 and 2030
China
GCN (2010)
• Losses from reduction in energy intensity of industry; could be offset by increased
employment in renewable industry, and by shifting towards services
European Union
GHK (2011a)
• A €1 billion investment in green sectors: around 130,000 jobs in 2014–20 (almost
half in renewables), thus increase in job creation per euro by a factor of three (320%)
GWS (2011)
• EU could reduce the total material requirements of its economy by 17%, while adding
between 1.4 and 2.8 million jobs compared with business-as-usual
178
• QUEST: ETRs led to a 1.3% increase in employment and 8% decline in CO2
emissions between 1990and 2010 (thus positive effects on employment)
• HERMES: Increased energy prices and lower labour costs led to a 0.6% rise in
employment and 4.4% decline in CO2 emissions (therefore positive effects)
Skou-Andersen
and Ekins (2009)
• E3ME model: effects of carbon tax in 6 EU countries: increase in GDP and
employment, despite some negative short-term transition effects (in all six countries)
Bach et al. (2002)
• PANTA RHEI model: recycling of energy tax revenue to subsidize contributions on
labour would result in an increase in employment by 0.55%
Frohn et al. (2003)
• LEAN : slight positive employment effects, though employment increase did not react
very strongly to an increase in the tax rates and the abolishing of eco-tax exemptions
Robins and Singh
(2009)
• Ecological tax reform created 250,000 jobs over the period 1999–2003, particularly
in labour-intensive sectors
Mauritius
ILO (2012)
• Detailed input–output model: significantly higher employment from greening agriculture
(+5%), manufacturing and hotel services (+67%), renewable energy (+75%)
South Africa
Maia et al. (2011)
• Through energy generation, energy and resource efficiency, emission and pollution
mitigation and natural resources management: 98,000 new jobs in short term
(2011–12), 255,000 in medium term (2013–17), 462,000 in long term (2018–25)
Rutowitz (2010)
• “Energy Revolution scenario” reducing GHG emissions by 60% by 2050 creates 27%
more jobs than IEA “business-as-usual” scenario and 5% more than the GWC scenario
Germany
Republic of Korea GGGI (2011)
• A US$97 billion public investment (2009–13) to support green transition could create
11.8 to 14.7 million new jobs by 2020 (1.18 million jobs in new technology alone)
Taiwan, China
Bor and Huang (2010)
• EnFore-CGE Model: energy tax, income & business tax reduction, public
transportation subsidy, R&D investment: employment decreased (between 0.1% to 3%)
United States
Muro et al. (2011)
• “Clean economy” industry created 2.7 million jobs in recent years, mostly among
low and middle-skilled workers, in largest US metropolitan areas
Pollin et al. (2008)
• PERI model: A US$100 billion investment in green jobs will create 4 times more jobs
than investment in petroleum, and will result in a 23% decline in unemployment
Roland-Hoist
et al.(2009)
Kammen et al. (2006)
• EAGLE model: A US$150 billion investment from 2 proposed bills would create
2.5 million jobs, in contrast to 800,000 jobs lost from investment in fossil fuels
• Shifting to renewables by 2020: positive employment effects, though some sectors
(coal, oil and gas mining) could be net losers
Chapter 10: Policy measures to ensure decent work and social inclusion
Taiwan, China
In Taiwan, China, the EnFore-CGE model was used to
study the existence of a double dividend through carbon
taxation, while accounting for the additional effects of
public finance, R&D investment and other complementary measures. The model is a multi-dimensional and
comprehensive energy policy assessment model. It incorporates several different reform scenarios: (i): carbon
taxation without any compensation; (ii) carbon tax revenue used to reduce individual income tax; (iii) carbon
tax revenue used to reduce business income tax; (iv) tax
revenue recycled into business income and individual income taxes; (v) tax revenue recycled into business income
tax, personal income tax and subsidization of public transportation; (vi) revenue recycled into business income tax,
personal income tax, public transportation and R&D investment. The results showed a decrease in all types of
energy consumption, indicating the positive effects of a
carbon tax. Complementary measures in the different scenarios not only offset negative impact on GDP, but lead
to positive GDP growth. However, the study did indicate
a slight decline in employment (between 0.1 and 3 per
cent from 2009 to 2018), with the largest decrease found
in scenario (i).
United States13
Roland-Hoist et al. (2009) from University of California,
Berkley assess the possible effects of two proposed bills,
the American Clean Energy and Security Act and the Clean
Energy Jobs and American Power Act.14 Using the EAGLE
model, they compare the impacts of combining a limit on
carbon pollution with complementary efficiency and renewable energy policies. The authors find that not only
would clean energy investment create three times more
jobs than investment in fossil fuels, but investment funds
from both bills would especially benefit those segments
of the population with only a high-school education.
Indeed, according to the study, a US$150 billion invest13
Though not related to measuring net employment effects, recently
the Brookings Institute also published a comprehensive study on the lowcarbon and EGSS sector. The study shows that clean economy segments,
notably in areas of wind energy, solar and smart grid, have created half a
million new jobs over the period 2003–10, expanding at a 3.4 per cent annual rate (above the average annual job creation rate), clearly outperforming
the national economy in terms of job creation. The report also notes that
median wages in the clean economy are 13 per cent higher than median
US wages.
14
Both bills were approved by the House of Representatives in 2009,
but finally did not pass the Senate.
ment from both bills would create 2.5 million jobs,
whereas the same investment in fossil fuels would lead to
a loss of 800,000 jobs. In addition, Kammen et al. (2006),
reviewing several studies that use a combination of input–
output models, as well as analytical models comparing the
economic and direct–indirect employment effects of clean
energy in the United States, find that shifting the energy
dependence from fossil fuels to renewable energy by 2020
will have net positive employment effects, though some
sectors – in particular coal mining, oil and gas mining –
could eventually be net losers. Overall, the renewable energy industry generates more jobs – per average megawatt
– than the fossil-fuel-based industries (mining, refining
and utilities).
A study from the University of Massachusetts,
Amherst indicates that a market-based approach towards
mitigating GHG emissions would have a net positive impact on employment, adding 2 million new jobs over a
period of 2 years, most of them direct jobs (around
935,000), but also indirect (586,000) and induced jobs
(496,000) (Pollin et al., 2008).
E. Social dialogue will help
ensure a successful
transformation
Given that the transition towards a greener economy will
entail profound changes in production processes and technologies as well as reallocation of jobs, close cooperation
between government and the social partners will be central
to the success of this transformation (box 10.3).
Indeed, in the 1992 Rio Declaration15 the social partners and tripartism are referred to as key constituents and
mechanisms for addressing the challenges and leveraging
the opportunities that the transition towards a green
economy can offer, notably with regard to (i) productivity;
(ii) skill development and employability; (iii) income dynamics; (iv) labour standards; and (v) the acceptance of
environmental reforms and of greening the economy.
More specifically:
15
The 1992 Rio Declaration states: “As their representatives, trade
unions are vital actors in facilitating the achievement of sustainable development in view of their experience in addressing industrial change, the
extremely high priority they give to protection of the working environment
and the related natural environment, and their promotion of socially
responsible and economic development.”
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Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
Box 10.3 Social dialogue in action
Social dialogue, as defined by the ILO, includes all types of negotiations, consultations and exchanges of information
between or among government, employers’ and workers´ representatives on issues of common interest relating to
economic and social policy. Depending on national contexts, the tripartite partners may also decide to open the
dialogue to other relevant civil society actors, in order to gain a wider perspective and to achieve a broader consensus.
Social dialogue can take several forms, including information sharing and consultation as well as tripartite negotiations
and collective bargaining:
180
•
Tripartite or bipartite bodies can engage in negotiations eventually leading to the conclusion of agreements. Some
of these bodies are empowered to reach agreements that can be binding, while other bodies do not have such
mandates and thus serve as advisory groups to ministries, legislators and other policy or decision-makers.
•
Collective bargaining is one of the core tools of social dialogue. It refers to the process of negotiations between
employers’ and workers’ respective organizations, which aims at improving and regulating the terms and
conditions of employment through collective agreements (as stated in the ILO Right to Organize and Collective
Bargaining Convention, 1949 (No.98)). Key issues covered include wages, working hours, training and
education, health and safety, and grievance mechanisms. The negotiations are usually intended to result in a
collective agreement.
● Social partners can play a key role in how productivity
gains are achieved and how they are distributed between
workers and firms. As the previous chapters demonstrated, a shift to a greener economy implies a much
higher degree of resource productivity (i.e. energy productivity and material productivity). However, the increase of resource productivity has been modest at most
for the vast majority of economies, and substantially
lower than the gains in labour productivity. Moving
forward, as investments in higher resource productivity
are pursued by enterprises, tripartite social dialogue will
be necessary to ensure that these gains are distributed
in an equitable manner.
● Social dialogue can inform national systems and institutions about the implications of a transition towards a
green economy for qualifications and employment
prospects. Social partners can act as a source of information, in particular as regards changes in the demand for
competencies associated with a green economy. They
can help identify the skills required by such a transition
(e.g. technical skills related to natural sciences and engineering), thereby facilitating labour demand and supply matching. Social partners can also carry out and be
key partners in research and surveys to collect data on
skills shortages and knowledge gaps. For instance, the
European Trade Union Confederation has recently
studied the impacts of climate change on employment
in the European Union (including in the construction
sector) and has presented four different scenarios for
skills shortages and needs (ETUC et al., 2007). Similarly, in India, the Multi-stakeholder Taskforce on
Green Jobs and Climate Change, established in March
2009 with support from the ILO, contributed to iden-
tifying the schemes expanding green jobs promotion,
and carried out studies assessing notably the employment aspects of selected renewable energy projects.
● Promote and organize skills upgrading and training
schemes for workers. Retraining is a pressing issue for all
partners of social dialogue (governments, employers
and workers). Indeed, a skilled workforce is the key to
increased productivity, resulting eventually in an efficient and effective utilization of resources, which in
turn is essential to economic recovery and growth. In
several countries, governments, employers and trade
unions have already acted together to implement
strategies improving skills (table 10.5). In Argentina for
example, the Advisory Committee for Cleaner Production (Consejo Asesorparauna Producción Más Limpia,
PML), composed of provincial governments and technical organizations, workers, universities, environmental non-governmental organizations (NGOs), and
other civil society actors, has put in place training activities about the tools and methods for cleaner production processes.
● Ensure fair transitions for workers and enterprises. Engaging in social dialogue will be equally important to
monitor shifts in income, notably income distribution,
to ensure that the process is fair and does not exacerbate
existing inequalities or generate new ones. Social partners have considerable experience in securing programmes of income support, so as to compensate for
the eventual layoffs or job separation involved in a transition to a green economy. In China, for example, the
transition of almost 1 million redundant workers in the
forestry sector was accompanied by income replace-
Chapter 10: Policy measures to ensure decent work and social inclusion
Table 10.5 Select examples of social dialogue and green initiatives
Country
Social partners involved, objectives
of the initiative
Main outcomes
Argentina
• The Advisory Committee for Cleaner Production
(Consejo Asesorparauna Producción Más Limpia,
PML): based on a public private cooperation,
composed of provincial governments
technical organizations, workers, universities,
environmental NGOs
• To promote better environmental efficiency; to
assist local governments and small businesses in
implementing environmental protection measures
and sustainable production practices
• Organization of training activities about the tools and
methods for cleaner production
• Diagnosis and actions for improvements in dairy companies
in the Association of Small and Medium Dairy Companies
• Review of waste management and mapping of effluents
produced by the businesses of the Industrial Park of Alvear to
design a collective and business-specific management plan
Brazil
• The Brazilian National Environmental
Conference (Conferência Nacional do Meio
Ambiente, CNMA): constituted of government
representatives (20%); business sector
representatives (30%); representatives of social
organizations (50%, of which NGOs, unions,
youth, women’s, indigenous organizations)
• Development of the Action Plan for the Prevention and
Control of Deforestation in the Amazon
• National Plan for the Training of Municipal Civil Servants
• Ministry of Environment resolution recognizing workers
as stakeholders in evaluation of environmental licences
awarded to companies
France
• Grenelle Round Table: brought together
government, unions, employers, NGOs and
local authorities for the first time to discuss
France’s environmental policy
• As part of the Grenelle Round Table process, France has
committed to a “Factor 4” reduction in GHGs by 2050. Key
measures to implement this goal include a bonus malus tax
system for CO2 emissions from cars
India
• Multi stakeholder Taskforce on Green Jobs
and Climate Change: established in March 2009,
under the leadership of the Ministry of Labour
and Employment, the Government of India,
and with support from the ILO
• Planning of a national Conference on Green Jobs to raise
awareness
• Discussion on the National Action Plan on Climate Change
and Solar Mission in relation to their employment aspects
• Identification of schemes expanding Green Jobs promotion;
• Studies assessing the environmental, decent work and
employment aspects of selected renewable energy projects
South Africa
• The National Committee for Climate Change
(NCCC): established in 1994; involves
government departments at a national, regional,
and local level; business organizations; unions;
universities, NGOs, and advises government on
climate change issues, in particular in relation to
international negotiations
• 2011: “Green Economy Accord” signed by the
government, with the backing of the country’s
three labour federations (Cosatu, Fedusa and
Nactu, accounting for more than 2 million
workers)
• This accord is one of the most comprehensive
social partnerships on “green” economy
development in the world, aiming at creating
300,000 jobs within the next 10 years
• Long-Term Mitigations Scenarios (LTMS) proposed in 2006
that the main groups in civil society should support scenarios
for future action against climate change in which all civil
society groups would be involved, and they should advise the
National Cabinet on the approval of a long-term
climate-change policy and the adoption of positions within
the framework of the United Nations Framework
Convention on Climate Change (UNFCCC)
Source: ILO, forthcoming.
181
Working towards sustainable development: Opportunities for decent work and social inclusion in a green economy
ment and effective active labour market policy measures (see also Chapter 3). Spain’s tripartite round tables
on social dialogue, created in 2005, are perhaps the
most commonly cited example of effective social dialogue on environmental and employment issues. They
were established to tackle compliance with the commitments under the Kyoto Protocol (through regulation of trading emissions rights) while checking the
impacts on competitiveness, employment and social
cohesion. Following Spain’s crisis in the construction
sector, a tripartite Declaration of principles for the promotion of the economy, employment, competitiveness
and social progress was also issued in July 2008,
suggesting a broad range of measures targeting increased liquidity of companies, financing protected
housing construction and reforming the vocational
training system (ILO, 2010).
182
● Ensure that labour standards are, at a minimum, respected, and ideally, improved in the context of greening.
The transition to a greener economy needs to respect
labour standards and offer working conditions that are
consistent with decent work. Indeed, a greener economy does not automatically create high-quality, decent
jobs. Job quality needs to be monitored and measures
taken to ensure labour legislation is applied and that
workers and employers can organize and make use of
collective bargaining. For example, in Brazil, a tripartite
dialogue was initiated in 2008 to improve the working
and living conditions for cane cutters. In 2009, six federal government ministries, employers and unions
agreed on a set of voluntary commitments with regard
to health and safety, work contracts, union organizing
and other issues, to be monitored and evaluated by a
national commission (see Chapter 5).
● Measures are more effective and long-lasting when they
are consultative and inclusive. Social dialogue in this regard can contribute to raising awareness and acceptance
and finding specific solutions for workers and enterprises (especially SMEs) to challenges posed by a green
transition. In France, the “Grenelle de l’Environnement” (Environment Round Table) process was set
up in 2007, bringing together for the first time government, unions, employers, NGOs and local authorities
to discuss the country’s environmental policies. This
resulted in a new sustainable development strategy for
2010–13 being adopted in July 2010, as well as in the
creation of a new ministry of Ecology and sustainable
development. France has committed for example to a
“Factor 4” reduction in GHGs by 2050. Key measures
to implement this goal include a bonus malus tax system for CO2 emissions from cars (CEDEFOP, 2010).
In sum, this chapter, and report more generally,
demonstrates through a number of policy lessons, good
practices and successful programmes that a green economy
with more and better jobs, poverty reduction and social
inclusion is both necessary and achievable. The earlier the
transition to sustainable development and to a greener
economy starts, the more this transition can be managed
to avoid the economic and social cost of disruptive change
and to seize the opportunities for economic and social
development.
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