FAQs on sustainable development, decent work and green jobs

The economy is dependent on natural resources and well-functioning natural processes and systems. For instance, fishermen depend on fish stocks and farmers need arable land and fresh water supply for crop and livestock production to secure their income and livelihoods. The growing scarcity of natural resources, coupled with rising levels of pollution and emission of greenhouse gases (GHG), will therefore threaten jobs and incomes, hence impacting societies. Table 1.1 in Report V (ILC 12) shows how eight economic sectors, together employing over half of the global workforce, are particularly dependent on natural resources and the climate. Report V (ILC 102) also illustrates in Figure 1.2 that overall productivity levels in 2030 could be 2.4 per cent lower than today resulting from further increases in GHG, and even reduced by 7.2 % in 2050, if no responsive policies are deployed (see Economic Transition following an Emission Tax in a RBC Model with Endogenous Growth).

Moreover, more frequent extreme weather events resulting from climate change pose a direct threat to job and income losses. This was the case of Hurricane Katrina in 2005, which resulted in some 40,000 jobs lost in New Orleans. Clearly, increasing environmental degradation and climate change are a severe threat to economic output, employment and social development, putting at risk national cohesion and stability.

Further reading in Report V (ILC 102): pp. 7-14

Investing in environmental protection by increasing the productivity of raw materials and energy is cost-effective for enterprises, thus increasing their competitiveness. The greening of workplace practices can reduce the amounts of resources needed for production, lower the amount of waste generated, and save energy costs. Besides, investing in new green products and services enables enterprises to access new markets, offering them a comparative advantage. Governments can provide incentives for both the adoption of green workplace practices and the investment in new green products and services by combining market-based and regulatory policy instruments. There is certainly great economic potential for redirecting investments and developing new green markets.

Over recent years, a growing number of countries have adopted and are now pursuing green economy or green growth strategies, some of them listed in Table 4.1 of Report V (ILC 102). Such national strategies perceive the quest for environmental sustainability as a major economic opportunity and a driver of investment, growth and job creation.

Further reading in Report V (ILC 102): pp. 16-21

The move to a greener economy will lead to employment gains and losses both within and between sectors of the economy. Increased demand and investment in greener products and services will generate direct employment primarily in green sectors, such as renewable energy. Other economic sectors will benefit and in turn create indirect jobs in non-green sectors, such as steel for the blades of wind turbines. Importantly, the number of jobs created throughout the transition process depends on the demand and investment for greener products and services, the labour intensity requirements for such products and services, and their overall trade implications.

As illustrated in Figure 1.4 of Report V (ILC 102), the production of green goods and services tend to be more labour intensive than the production of resource- and energy-intensive goods. Still, while new employment will be created in new sectors and new production processes, some jobs will be lost as green products and services replace traditional ones. For example, an increase in renewable energy will reduce demand for conventional fossil power.

As depicted in Figure 1.5 of Report V (ILC 102), the gross gains and losses of jobs are equivalent to the number of workers who will have to change jobs, indicating the size of the labour market transition. Moreover, the direct and indirect gains and losses also help explain the nature of the transition, showing whether workers are likely to have to move between sectors or if the relocations will take place mainly within the same sector. Although changes will be significant, many workers will not have to change sectors or be relocated, but have to adapt to greener practices and new technology in their existing work places.

Jobs created in the process of change must not only be green but also decent to be defined as “green jobs”. As explained in Box 1.2 of Report V (ILC 102), green jobs can be further distinguished between those that are producing green products and services and those that are involved in green production processes and technologies, including those outside green sectors/industries.

Further reading in Report V (ILC 102): pp. 23-27

Efforts made so far by individual companies serve as positive examples of the opportunities available to green business models and value chains. Box 3.1 of Report V (ILC 102) presents just one of them, i.e. the global manufacturer 3M pushing forward sustainability measures to reduce waste, water consumption, increase energy efficiency, and cut down greenhouse gas emissions and pollutants. The company’s Pollution Prevention Pays (3P) programme prevents pollution at the source, through product reformulation, process modification, equipment redesign, and the recycling and reuse of waste materials. The program relies on voluntary participation of its employees, who to date have completed over 8,600 projects, preventing more than 1.4 billion kilograms of pollutants and saving the company US$1.4 billion.

Workplace-based social dialogue can greatly help detect areas for improvement and reach agreement on how to embark on them jointly. Various other green measures exist for enterprises, which can both protect existing jobs and in some cases actually boost employment considerably. One area offering such potential is the recycling of large amounts of heat generated as a by-product in many basic industries. The use of combined heat and power (CHP) worldwide could, for instance, generate around 2 million jobs at new CHP facilities.

Further reading in Report V (ILC 102): pp. 51-53

Accounting for more than two-thirds of all employment, SMEs represent the largest source of new job creation. They are key for pushing forward low-carbon and resource efficient strategies. However, they face many challenges in terms of accessing information about green markets, skills programmes, new technologies and finance opportunities. Furthermore, complying with environmental standards is often more difficult for smaller businesses than it is for bigger ones.

Cooperatives, business associations and partnerships along value chains can play an important role in addressing these challenges. Besides, SME-sensitive environmental regulations, development and public procurement policies, along with business development services and skills development programmes can also enable SMEs to turn towards greener practices.

A recently published OECD study on Green Transformation of Small Businesses: Achieving and going beyond environmental requirements, suggests several ways in which SMEs can comply with environmental standards and apply good green business practices.

Further reading in Report V (ILC 102): pp. 53-56

One of the keys to facilitating a just transition for all enterprises and workers towards a greener economy is the early identification of affected industries, enterprises and workers. This improved preparedness helps design timely adjustment measures. Experiences from previous major restructuring in different sectors and countries highlight some of the obstacles but also demonstrate encouraging lessons about policy mixes that have been effective in handling transitions. Box 3.3 on the forestry sector in China and Box 3.4 on commercial fishing in Norway in Report V (ILC 102) summarize two of these best practices.

Overall, labour market policies and social security programmes can play a significant role in dealing with the employment adjustments arising from green economy transitions. Such support measures help enterprises retain affected workers or match and retrain workers with new jobs and functions. Governments can help identify skills needs through survey and other instruments, provide income support such as unemployment benefits, and provide information to workers on the range of labour market programmes available. Indeed, for workers to take advantage of new occupations and adapt to greener workplace practices, enhancing their skills and capabilities through technical and managerial training is crucial. Without the development of skills and entrepreneurship for green jobs, the transformation process will be hampered. For more information on ILO’s work in this area see: Skills for green jobs. A global view

Further reading in Report V (ILC 102): pp. 56-61

Climate change impacts communities, enterprises and workers in locations exposed to storms, floods, droughts and fires. Particularly the poor in developing countries are the most exposed and vulnerable to the effects of climate change, as harvest losses and damage to assets and infrastructure have a direct and severe impact for this population group.

Adaptation measures are essential in building resilience for those with the least adaptive capacity. Approaches integrating social protection schemes are particularly important in reducing the vulnerability of the poor. As highlighted in Box 3.6 of Report V (ILC 102), Ethiopia’s Productive Safety Net Programme (PSNP), is a prime example. It promotes an employment-based social transfer programme to tackle food insecurity as a result of an uncertain climate. Offering guaranteed employment for five days a month in return for food or cash, it targets people facing predictable food insecurity as a result of poverty rather than temporary acute food insecurity events. This programme also demonstrates the fundamental role public employment programmes can play as part of social protection schemes in assisting vulnerable populations cope with the impacts of climate change. The ILO’s guide Local investments for climate change adaptation: green jobs through green works provides further insight into how local resource-based approaches can contribute in assisting communities adapt to climate change.

Further reading in Report V (ILC 102): pp. 61-67

Sustainable development frameworks must include and link the economic, social and environmental dimensions. Only such integrated approaches can reinforce economies whilst ensuring social inclusion, reducing poverty and enhancing environmental sustainability. Country-specific policy mixes are required to implement successful sustainable strategies, realizing that no one-size-fits-all policy recipe exists. The ingredients of the policy mix will often encompass macroeconomic fiscal and monetary policies to redirect consumption and investment by enterprises, consumers and investors; sectorial policies to include environmental regulations and mandates; and social and labour policies, which should include a combination of social protection, employment, and skills development policies. Moreover, mobilising and ensuring the close cooperation between government and the social partners is central to the success of sustainable development strategies. Promoting social dialogue and ensuring the active participation of all the actors in the world of work is critical to guide the policy-making process.

Further reading in Report V (ILC 102): pp. 86-98