Green economy could aid in global unemployment challenge

9th April 2014 By: Natasha Odendaal - Creamer Media Senior Deputy Editor

Green economy could aid in global unemployment challenge

Transitioning to a green economy can help the world mitigate rising unemployment levels, particularly at a time when youth unemployment is peaking.

Globally, in 2013, 202-million people were unemployed, up five-million on the previous year, said International Labour Organization (ILO) Green Jobs Programme policy specialist Moustapha Kamal Gueye at the Department of Environmental Affair’s (DEA’s) ‘Green jobs dialogue’, in Midrand, on Wednesday.

An ILO report on global employment trends for 2014 indicated that the bulk of the increase in global unemployment emerged from East Asia and South Asia, representing more than 45% of the additional jobseekers, followed by sub-Saharan Africa and Europe.

And, if current trends continued, global unemployment was set to worsen, with more than 215-million expected to be unemployed by 2018.

“We are not in a very [optimistic] employment situation,” Gueye noted, pointing out that globally, youth – those aged between 15 and 24 – accounted for about 74.5-million of those unemployed, with youth in the Middle East and North Africa hardest hit.

Sub-Saharan Africa collectively was “better off”, with its youth unemployment percentage at 7.8%; however, while Africa was “not so bad off”, a critical concern was the high rate of “vulnerable employment”, which, at 77.4%, was much higher than the global average of 48%.

The ILO defined vulnerable employment as work with low pay, limited job security, poor working conditions and little or no social protection.

For many people in the developing world, vulnerable and informal jobs remained the only work available, the ILO pointed out in its report.

The number of people in vulnerable employment positions expanded by 1% in 2013 – five times higher than the 0.2% growth rates recorded during the years prior to the 2008 global financial crisis.

Gueye said that an estimated 375-million workers, or 11.9% of total employment, last year lived on less than $1.25 a day and 839-million workers, or 26.7% of total employment, lived on $2 a day.

Despite an effective 12%-a-year drop from the 600-million poverty-struck workers recorded during the early 2000s, the number of workers living in extreme poverty declined by only 2.7% globally in 2013.

Consultations for the post-2015 development agenda pinpointed better job opportunities as an emerging  and urgent  demand, particularly in Africa, preceded only by the demand for good education and better healthcare systems.

However, the move to a green economy and the creation of “green jobs” could add 60-million net jobs globally by 2050.

A green job entailed decent work in sectors such as agriculture, manufacturing or services, besides others, that contributed to the reduction of energy and raw materials consumption, limited greenhouse-gas emissions, reduced waste and pollution, protected and restored ecosystems and assisted countries in adapting to climate change.

DEA chief policy adviser for sustainable development Tlou Ramaru said green economies were increasingly seen as a gateway to new opportunities for trade, growth and sustainable development and a way to revive stagnant or sluggish economies.

Developing or advancing resource-intensive industries would result in rising costs, the loss of production – with productivity levels dropping 2.4% by 2020 and 7.2% by 2050 – and the disruption of economies.

The transition to a green economy could deliver 0.5% to 2% in net job gains, with productivity improving 1.5% by 2020 and 5% by 2050, Gueye explained.

But the rapid shift to a low-carbon economy would not leave the labour market unaffected, causing shifts in the volume, composition and quality of employment, as well as impacting the level and distribution of income.

A critical concern was that greening an economy would lead to the displacement of many jobs, or make current positions redundant, particularly in resource- and energy-intensive industries.

Gueye cited an expected slashing of 600 000 jobs in China as obsolete thermal-power generators were set to close by 2020 – with only one-tenth of these people to be re-employed in new, large thermal-power stations.

Labour needed to brace for potential job losses throughout the transition, but new employment would be created, he promised, adding that employment loss would likely be minimal, owing to the modest employment share of high-emission, energy- and resource-intensive sectors, Gueye said.

Seven undisclosed members of the Organisation for Economic Cooperation and Development collectively produced 80% of emissions but only held 10% of the workforce, while ten industries emitted around 90% of European Union’s emissions and only accounted for 16% of the region’s total employment.

Further, greening was a marginal factor when compared with the causes of declining employment in industries such as mining, for instance, as automation emerged as the main eliminator of jobs in recent times.

“We can have more and better jobs,” Gueye noted, particularly if innovative responses were implemented to ensure a “just” transition, through the promotion of social dialogue, skills upgrade and sectoral shifts.

“Equipping workers with the right skills is not only necessary to generate greener output, but is equally necessary to ensure that the workers can find high-quality jobs, especially if displaced from high carbon-emitting sectors,” the ILO said.

But effective policy frameworks, embedded with the social protection policies, skills building and upgrading ambitions and targeted job creation objectives, were critical for a successful transition, particularly in Africa, where, in many countries, there was a disconnect between environmental policies and the skills needed to implement them.

“[An] appropriate and conducive policy and regulatory environment, accompanied by effective public sector coordination, are crucial for a successful transition,” said Industrial Development Corporation (IDC) research and information senior economist Nico Kelder.

But South Africa needed to act quickly in a limited window, or other countries would lead the way, leaving the nation as importers of green technologies, green products, goods and services.

South Africa, which aimed to create 300 000 direct green jobs through its own economy greening initiatives, had, through the “Green Economy Accord” attached to the New Growth Path, committed to 12 identified areas of focus, including energy efficiency, renewable energy, biofuels and clean coal initiatives.

The DEA had launched various green job projects, such as the community-based initiative to green the rural economy of the uPhongolo local municipality, as well as the R300-million Groen Sebenza project, which was aimed at developing skills and bridging the gap between education and job opportunities in the biodiversity sector.

Further, the Green Fund had committed R1.1-billion over five years, with 22 projects and 16 research initiatives under way.

The IDC had also committed R22-billion over five years, with another R500-million to be sourced to fund energy efficiency projects falling under a joint venture between the IDC and the German Development Bank.