Climate and Jobs: The Same Fight!

Climate and Jobs: The Same Fight!

There are not many people left today who oppose the environment to jobs. Several recent studies confirm: the more invested in “green conversion,” the more jobs can be created.

The crisis of the free-market, productivist model that was “the sole policy possible” for a quarter century has come to pass. Even workers in the car and truck industry are convinced that the previous model is dead and only a conversion to new production lines may save their jobs.

But, perhaps, we don’t adequately gauge that every delay in “green conversion” is a delay in job creation. On that subject, one often hears established interests object: “Agreed, nothing will be as it was before; we will take off again in the direction of another model, but we need to take existing jobs into account and not go too fast.” Take existing jobs into account? Agreed, if that means using existing competencies and even existing installations in the best way possible for green conversion, but the second phrase is absurd. Delaying green conversions and new green activities is delaying job creation. Without counting the strictly environmental aspect of the problem: any delay in the battle against climate change is irrevocable.

This pressure of lost time, which plays not only against the climate, but also against employment, results from the dual nature of green conversion: as “conversion” and as “green.” We know that we must redirect transportation toward public transportation, insulate all buildings (and especially older buildings) and re-establish short – and, if possible, organic – networks in agriculture and food. Now, the simple act of redirection involves work and the future – stabilized – regime will create more jobs on an ongoing basis. It’s a bit like the ten first years of Fordism in France (1945-1955): on the one hand, we had to rebuild the country, and on the other, what we were rebuilding was an almost full-employment regime. The two effects are indistinguishable in the beginning, which made people fear a return of the Great Depression once the reconstruction was over. That didn’t happen.

The first effect is easy to understand. In the ten-year window the Stern and IPPC reports indicate we have to save the climate between now and 2010; regional and national policies will have to tend entirely toward green conversion. France and Europe should already be covering themselves with work sites. Our economies should be operating as what the great economist Janos Kornai called “the mobilized economy,” that is, one directed by an urgent public need. Periods of reconstruction, conversion, or – even more typically – war are examples of that mobilized economy. A few months after Pearl Harbor, Ford factories in the United States worked around the clock to produce … bombers; women and African-Americans had invaded factories that had been off-limits to them up until then.

Question: what will happen after a sustainable regime has stabilized? Here, economists’ notional response invokes what they call the “Cobb-Douglas function,” which formalizes the relationship between labor use and the use of other factors of production. In general, it is agreed that techniques which economize on labor demand that nature be more intensely exploited, and vice versa. If we want to reduce our environmental footprint, well then, we have to roll up our sleeves and work our brains!

When one attempts to plan (if only in view of what professional training would be necessary) the new model’s technical factors, one sees immediately that this general intuition is confirmed in the main sectors of green conversion. Thirty to fifty percent more farm labor is required to produce organic food. To move from the individual car to public transportation, we must first build clean sites and rolling stock (that’s the conversion aspect), then run those vehicles and manage those networks (that’s the regime aspect). A new building at zero kilowatts per hour at present requires 15 percent more labor than the present standard building, but converting all the former stock will mobilize an army of artisans over a long period …

One also sees that we must make a distinction between direct jobs (for example, in construction) from indirect jobs (for example, in the production of supplies); there again, solar panels require more labor than slabs of insulation fiber. But that’s not all. We must keep track of the (mostly environmental) costs that we seek to avoid by conversion. Those expenses avoided (for example, gas purchases) become, in consequence, available for other spending, on leisure, for example. This is especially true because our oil is imported: fuel expenses effectively reduce demand for local production. This anti-Keynesian effect is all the greater because oil is expensive. Therefore, energy economies create (or save) so-called induced jobs in sectors that have nothing to do with energy, such as … live entertainment!

What the Studies Say

Who measures all that? Sectoral experts, who have an idea of the technical coefficients, and econometrics specialists, who can insert these changes into global models. They must take data about what the public policy will be for green conversion (more or less rapid) and the costs of not converting (mainly the price of imported oil) as given parameters.

And which parameters should be used? Speed of conversion, first of all. The main unknown is government ambition in the struggle against climate change (food conversion is more complicated to evaluate and more hypothetical). But there is also the question: how will it be financed? Simply by taxes (which reduces purchasing power and consequently induced jobs) or by a loan repayable during the years when the energy economies will have made their impact felt?

We are beginning to have quite a few studies. Pascal Canfin, then a candidate in the European elections, summarized them in his little book, “Le contrat écologique pour l’Europe” [“Europe’s Environmental Contract”], at the beginning of 2009. Then the WWF asked a CNRS team, the Cired, for an econometric study of France only, assigned to Philippe Quirion. Recently, Pascal Canfin, elected European MP (Europe Ecologie), and the Fondation pour le progrès de l’homme [Foundation for Human Progress] have ordered the same study from Philippe Quirion, for the Ile-de-France region only.

The European summary takes as its point of departure the European goal – a 30 percent reduction in greenhouse gases between now and 2010 – which was the official position up until Sarkozy and Merkel’s December 2008 capitulation to established interests (goal since reduced to a 20 percent reduction). The net job creation number for the European Union is 10.3 million. The case of transportation is interesting: Pascal Canfin uses a European Trade Union Confederation study focused on 2030 as his point of departure: 4.5 million jobs are eliminated in vehicle production, 8 million jobs created in collective transportation! One sees that true conversion occurs and, moreover, with 3.5 million additional [ongoing] jobs.

Philippe Quirion’s first study (on France for the WWF) is much more specific. It is, in fact, based on the Négawatt scenario, which specifies how to reduce energy consumption by 30 percent. It describes a triptych: energy conservation, efficiency and renewable energy use. Conservation: costless energy economies through behavioral changes (for example, driving less fast), that consequently create induced jobs only. Efficiency: technical changes (public transportation, building insulation). Renewable energy (solar etc.): these sources are much more labor intensive than thermal power stations.

The outcome: for 30 percent reduction, with oil at 100 dollars a barrel (without economic recovery, we’re already back to 80 dollars a barrel …): 635,000 additional jobs in 2020 over the baseline scenario (continuing the present trend). Details: 316,000 jobs created in renewables, 564,000 in efficiencies, versus 138,000 jobs destroyed in the old energy networks and 107,000 jobs destroyed in individual transport. As for induced jobs: 48,000 “only.” But if oil rose to 150 euros, the induced effect would be ten times bigger (467,000 jobs). But note that this is a comparison to a baseline scenario! Conserving energy does not create as many induced jobs in other branches as it saves compared to a situation where no jobs would be created and in which purchasing power would melt away in the rise of oil prices.

The second Quirion study (Ile-de-France) is even richer in information, since it introduces variants. Next to the pre-2008 consensual objective of a 30 percent reduction, it examines other goals: an “under Sarkozy” variant (20 percent reduction) and, notably, the IPPC-recommended variant (40 percent reduction), the goal adopted by the European Parliament in November 2009 right before Copenhagen (before the Copenhagen failure, Parliament cautiously returned to the goal of 30 percent reduction in greenhouse gas emission). Moreover, two financing variants were studied: covering the entire cost through taxes or borrowing 50 percent (for example, from the European Investment Bank). Finally, the scenario was run with oil at 80 euros a barrel and oil at 120 euros.

No surprise: The 40 percent greenhouse gas reduction, financed 50 percent by borrowing, with oil at 120 euros per barrel scenario creates eight times as many jobs (164,000) as the 10 percent reduction, entirely financed by taxes, with oil at 80 euros a barrel scenario (22,000 jobs)! Readers may enjoy the pleasure of discovering all the details for themselves. And this result is achieved even as Quirion demonstrated the integrity of not forecasting any acceleration in the move to public transportation between the 30 percent and 40 percent reduction scenarios, since the studies for new lines cannot be improvised. In my opinion, he underestimates what may be obtained by “light” methods (clean sites for buses etc.)

All these jobs created are not “local,” Ile-de-France region jobs, since that region imports the greater part of its supplies. So, it’s a question of jobs created in France by public policies in the Ile-de-France alone. For example, should the region start big tramway projects, it would create local direct employment, but also indirect jobs (the vehicles) that will essentially benefit Franche-Comté! In any case, today we can measure the extent to which each delay in the fight against climate change is also a choice in favor of mass unemployment …

Alain Lipietz is an economist and former (Green Party) European MP.

Translation: Truthout French Language Editor Leslie Thatcher.