Do we have to choose between creating jobs and protecting the climate?

As the negotiations on universal Sustainable Development Goals and a new global climate agreement enter the finishing straight, an old apprehension continues to linger: the perception that the world has to choose between creating jobs and prosperity for all and protecting the climate and environment. 

Extensive research and – perhaps more importantly – mounting evidence from policies in countries and practices in enterprises around the world show that this is not the choice policy makers, business leaders and voters face. Enterprises and labour markets are not the problem. Quite to the contrary: the world of work is a source of solutions and is an indispensable driver to bring about the profound transformation of production and consumption patterns that are needed to make enterprises and our economies sustainable. 

The challenges of inclusive social development and environmental sustainability are indeed enormous and urgent. They are also inextricably linked. Job creation is a social imperative with over 200 million people unemployed, staggering rates of youth unemployment in many countries, persistent working poverty and social exclusion affecting more than a billion people globally. Coupled with rising inequality, this is a growing threat to social cohesion and stability.

At the same time, climate change and the degradation of natural resources increasingly disrupt economic activity and destroy jobs. The International Labour Organization (ILO) puts the productivity losses generated by climate change alone at 7.2 per cent. Cost estimates by the Organization for Economic Co-operation and Development (OECD) and World Bank are even higher. Environmental sustainability is not an option from a labour market perspective, it is a necessity.

What is more: proactive policies to protect the climate and preserve the environment can actually create substantially more jobs than the ‘business as usual’ growth. Our review of global and over 30 national assessments concludes that creating up to 60 million additional jobs by 2030 is perfectly possible. 

Big strides could also be made in reducing working poverty, notably in agriculture which still employs one in every three workers, over one billion globally. Access to clean and affordable energy, as well as energy-efficient public transport and housing is a powerful way to overcome social exclusion. Access to modern energy alone would significantly improve the lives and could provide entirely new economic opportunity to 1.3 billion mostly poor people. 

While major social benefits can originate from a greener economy, there is no denying that there are challenges. The transformation will generate structural change in economies, changing the tasks and skill profiles of many jobs. Some workers are likely to lose their jobs altogether. These losses are expected to be small, but they are often concentrated in communities already reeling from the fall out of globalization. Not addressing the issue can result in political blockage of urgent reductions of environmental damage. 

The impacts of climate change like heat waves, storms and droughts are felt everywhere, but they affect poorer segments of society disproportionately. So do some policies needed to reduce emissions and protect natural resources, like higher prices for energy and resource use. The extension of social protection has proven very effective in helping workers and communities in making the transition and adapting to climate change.

Integrating climate and other environmental with social and labour market policies is critical for seizing the opportunities and for addressing the challenges of the transition. A wealth of policy instruments and experiences has been documented. Environmental tax reform stands out: higher prices reduce emissions and the revenue and savings reduce the cost of labour and finance social protection and inclusion.

Prices are important, but will be far from sufficient. Green jobs, workers with new skills capable of adopting cleaner modes of production, of introducing new business models, green products and services, as well as large-scale programmes in key sectors will be needed. 

Solutions for Climate Change and Sustainable Development documents how the World of Work has been a source of innovation and solutions in all these areas: management-labour cooperation in firms has reduced emissions by over two thirds while saving the enterprise money. Through social housing and skill training programmes ministries of labour and social development have created jobs and massively expanded access to renewable energy. Unemployment and cash transfers are used to protect and sustainably use natural resources like fish and forests. Trade unions and employers’ organizations were at the origin of one of the largest building renovations programmes to boost energy efficiency and reduce emissions in Germany, triggering investment of over € 120 billion to date.

A policy framework is emerging from the myriad experiences and lessons learnt. The conclusions adopted by the International Labour Conference in 2013  spell out the principles, the relevant policy areas and the way they need to be articulated in order to achieve a just transition to a low-carbon, greener economy with positive outcomes for social development and labour markets. If reflected in the new climate agreement, this just transition framework will make the World of Work a powerful driver of sustainable business and economies.

This blog was orginially posted on the ILO Newsroom.