Changes in weather patterns over past decades led to the announcement of the European Green Deal on 11th of December 2019. This roadmap sets ambitious goals aimed at turning climate challenges into opportunities and making the EU carbon neutral by 2050. The milestone to reduce the carbon footprint by 55% by 2030 compared to 1990 levels of CO2emissions is challenging and should be achieved with the support of investments from the NextGenerationEU Recovery Plan, and the EU’s 2021-2027 multiannual financial framework. Implementation of the related policies will influence daily life of the EU citizens directly or indirectly in various areas. Those will include (but will not be limited to) employment, transport, housing and education.
Efforts to achieve a greener future were accelerated in 2022 by the energy crisis. Expenditure by countries across Europe to shelter households and firms from negative effects of unprecedented price hikes has reached significant amounts. Germany has allocated the highest budget to help its economy avoid downturn. Although smaller countries have not budgeted as such, a number of them have allocated substantial amounts relative to their GDP, exceeding 3% of GDP.
Funding to Fight High Energy Prices
Social effects of the recent compensations of high prices are certainly positive, but from a longer point of view, those expenditures negatively impact the levels of public debts. Current economic cycle position should be characterized as on the verge to recession, which was postponed at least for the short-term. This situation is accentuated by the ongoing armed conflict in Ukraine and the high level of uncertainty associated with it and regarding further developments. All those processes are indirectly affecting the situation of the households and in many countries triggering the investments to renewable energy sources (RES). Additionally, legislative framework and greening trends are increasing importance of electro-mobility, energy-efficient buildings, recycling and waste management.
As a result of turbulent development of energy prices (which is likely to be especially true for 2024) and the accelerated green transformation due to the aforementioned developments, certain types of industrial activities are expected to be curtailed either in sectors where production is energy intensive or where it is environmentally unfriendly. Especially at the level of local economies in regions with this type of industry, as well as in regions where environmentally unfriendly forms of energy production are located (e.g. coal mining regions), this will have an impact on local employment.
Employees from industries affected by the green transformation can ease the demand for technical skills developed in education system in these regions in the past (e. g. mechanical or electrical engineering). On the other hand, transformation also brings inevitable need to use technologically innovative and advanced procedures that will increase need for highly specialized professional skills in energy, renewable resources, environmental management etc. (e. g. special skills such as production and distribution of hydrogen, capturing and processing CO2on site, use of photovoltaics). According to the results of the INTERCEPT survey (2022), the need for new skills and for upgrading existing skills has been identified among relevant stakeholders as the main expected impact of the green transition on related jobs. Those processes will be needed for employees at all skills levels from high-skilled to low-skilled occupations. The specific skills, courses on advanced digital skills and soft skills (nowadays, management skills, organizing and planning of work, or communication and presentation skills prevail as regards the soft skills required) need to be developed and delivered. The skills such as analytical thinking, problem-solving, advanced digital skills and the ability to work in a team will gain importance.
The accelerated process of green transformation will also be reflected in adaptation of education system, which in many aspects is very rigid, while the new needs of the labour market are rapidly changing. In addition to that, the labour market will also be influenced by other global factors, such as automation and robotization. This will create additional pressure on secondary vocational education as well as on higher education to adapt their study programs to the new conditions. There is scope for the creation of experimental fields of study (e. g. design of smart electrical installations, servicing of electric vehicles, charging stations and battery installations). Due to the expected increase in unemployment related to the decline in traditional sectors in certain regions, also extracurricular education and retraining will need to be strengthened. Cooperation of public and private educational institutions with employers has to be promoted. In-company training and education-on-site should be promoted more. Those are the aspects that project INTERCEPT is targeting.
Besides this, the employees threatened by the termination of mentioned economic activities will need assistance in legal issues (termination of employment, eligibility for social benefits or compensation allowances) as well as assistance in re-employment chances (e. g. provision of training, retraining and personal development, assistance in finding and creating suitable jobs and in successfully managing and permanently maintaining the obtained job). This needs to be reflected in an updated policy perspective of the public authorities, preferably not only at the national but also at the local level.
Also recommended are public investments to promote innovative activity of SMEs by supporting innovative projects focused on the new sectors and greening of the economy. As well as to connect the innovation activities of SMEs with large enterprises and educational institutions and thus create an innovation ecosystem. The goal is to develop research and development in the field of RES, energy efficiency, carbon-free energy and smart solutions in energy. Special assistance and support may be provided to start-up entrepreneurs, e.g. in the form of consultation, advice in the preparation of a business plan, advice in administrative tasks connected with business, in the field of business financing , etc.
All relevant stakeholders must be involved in the preparation of a strategy for the future development of the local economy, ranging from municipalities, employers, educational institutions, state employment offices, consultancies, NGOs and the unions and employees at risk themselves.
Article wrtiten by: Veronika Hvozdikova and Ivan Lichner (Institute of Economic Research – Slovak Academy of Sciences).
References
INTERCEPT. (2022). Key cross-cutting competences related to Green jobs and stakeholders’ perspective. https://interceptproject.eu/wp-content/uploads/2022/09/INTERCEPT_WP4_report.pdf
Sgaravatti, G., S. Tagliapietra, C. Trasi and G. Zachmann (2021) ‘National policies to shield consumers from rising energy prices’, Bruegel Datasets, first published 4 November 2021, available at https://www.bruegel.org/dataset/national-policies-shield-consumers-rising-energy-prices
