4 minute read 25 May 2021
Engineer standing in a field at a wind farm

How the new era of green growth in Europe is impacting jobs

Authors
Antonio De Rose

EY Resilient Infrastructure and Green Development Leader for EU institutions

Environmental engineer. Passionate about mega trends and sustainable infrastructure. Inspired by jazz music, painting and art.

Alessandro Cenderello

EY Managing Partner for EU institutions

Proud citizen of the European Union and advocate for diversity. Music, food and wine lover.

Alexis Gazzo

EY France Climate Change Leader; Partner, Climate Change and Sustainability Services, EY & Associés

Helping businesses and governments engage in low-carbon strategies. Creating and protecting long-term value for clients.

4 minute read 25 May 2021

EU green growth as the next cornerstone to create sustainable jobs is a torchbearer for the global economies.

In brief
  • EU's €1.8 trillion package is the foundation to address Europe’s climate transition by becoming the world’s first continent to be climate neutral by 2050.
  • The European Green New Deal’s objective to create jobs is fully aligned with numerous key projects attracting investments.

In governments and boardrooms around the world, decisions taken this year will determine how countries revive after the pandemic and decarbonize in the 2020s. It is clear that business as usual is not an option.

Europe’s moonshot moment

The EU is leading the way with its Green Deal, designed to address Europe’s climate, biodiversity, pollution, economic, political and health crisis. In July last year, EU leaders agreed to fund a package worth €1.8 trillion to fund the continent’s climate transition.1 Ursula von der Leyen, President of the European Commission, announced that she wants Europe to be the world’s first climate-neutral continent by 2050,2 calling for this to be seen as “Europe’s man on the moon moment.”Just as the years following JFK’s moonshot announcement were spent building Apollo 11, the next few years will be spent elaborating what the European Green Deal will mean in terms of jobs and growth.

The US is now undertaking similar initiatives. A $2 trillion infrastructure plan is following a $1.9 trillion fiscal relief plan. Decarbonisation and clean energy plans are in the pipeline.

It is already clear, however, that we are entering a new era of stakeholder capitalism. Growth in this decade will differ from the past in three ways:

  • Purpose-driven: The recovery from COVID-19 will be driven not just by private investment but also by exceptional levels of public investment, focused on strategic objectives such as reducing pollution, improving energy efficiency, and developing low emissions alternatives for transport, construction, food, and the economy as a whole.
  • Sustainable: It will be driven by goals such as ensuring cleaner air and water, better health, a renewed natural environment, and a better quality of life.
  • Strategical: Certain sectors and businesses have been designated as strategically important and there are plans to invest in them. For example, European strategies are being set out for agriculture, hydrogen, building renovations, offshore wind energy, and the circular economy.4

The debate, which is now at institutional level, is how to make sure that the European Green Deal is as efficient and effective as possible, and as responsive to the needs and priorities of all European stakeholders.

What does the European Green Deal mean for jobs?

An important part of the test will be its ability to create jobs.

In the European Attractiveness pulse survey conducted in October 2020, a focus on sustainability and climate change emerged as the second-fastest growing trend in the next three years according to investors. In the short term, there are thousands of projects that are ready for investment across the continent in the energy, transport, buildings, industry, and agricultural sectors. In an EY study done in collaboration with the European Climate Foundation (pdf), we have identified many of them.5 We estimate that together they represent an aggregate investment of €200 billion, and could create 2.3 million jobs – roughly a quarter of those lost to the pandemic in 2020.

We can see areas that will grow in quite a granular way, such as regeneration, recycling, and renewable energy. In the energy sector, for example, we have identified 374 projects worth €75 billion, which could provide over a million jobs and save 464 million tonnes of emissions. They include extending power transmission and distribution networks, a solar panel Gigafactory, and an interconnector between Israel, Greece, and Cyprus.

In the transport sector, 217 projects worth €87 billion could employ a further million, saving a further 1490 tonnes of emissions. They include charging infrastructure for electric vehicles, the environmental efficiency of urban transport systems, and the development of electric ships, hydrogen taxis, and more.6 In a foresight report developed for Shift2Rail, EY has anticipated that increased competitiveness of the EU rail transport system could create 4 to 6 million direct and indirect jobs, and reduce between 6 and 8 MtCO2 by 2050.

These projects offer an indication to the growth areas of the future and show where opportunities will lie in this decade. We will see even more as the preparations continue for the upcoming COP26.

Value-led sustainability initiatives are set to grow, which would require new skillsets, e.g., in Environmental, Social, and Governance (ESG) metrics, renewable technologies, and more. The key sectors for growth in the 2020s are already visible – green energy and transport, energy renovation projects, and zero carbon building materials. The EY European Attractiveness Survey 2021 launching on June 7 will provide fresh insights on how investors intend to reflect sustainability in their future investment projects, for example, through greater focus on reducing carbon emissions and waste, or increased access to cleaner energy sources.

One lesson from past stimulus packages is that success must be judged on a horizon of no less than four to five years. The 2009 American Recovery and Reinvestment Act, for example, showed little effect on jobs in the short run, but created roughly 15 jobs per $1 million in the long run.7

Over the decade, many European companies, large and small, will also decide how to become carbon neutral themselves. For most, it will represent a commitment to value-led sustainability – growing by greening.

Collaboration will be the key to success

No single organisation can achieve the ambitious goals of the European Green Deal alone and to realize the Just Transition – a transition towards a climate-neutral economy that happens in a fair way, leaving no one behind – collaboration will be key.

In this new era of growth, the public, private, and third sectors will need to join forces to innovate, spread knowhow, and build the green industries and jobs of the future.

The EU is investing in green jobs on a historic scale. The US has begun to do the same. The outlines of the recovery have been sketched. It is up to all of us to contribute to making it a reality.

  • Show article references#Hide article references

    1. https://www.bruegel.org/2020/07/is-the-eu-council-agreement-aligned-with-the-green-deal-ambitions/
    2. https://clubofrome.org/wp-content/uploads/2020/10/System-Change-Compass-executive-summary-FINAL.pdf
    3. https://www.theparliamentmagazine.eu/news/article/europes-man-on-the-moon-moment-von-der-leyen-unveils-eu-green-deal
    4. https://www.politico.eu/article/what-is-the-green-deal/
    5. https://assets.ey.com/content/dam/ey-sites/ey-com/fr_fr/topics/power-and-utilities/02-09-2020/covid-19-pour-une-relance-verte-et-resiliente-en-europe/a-green-covid19-recovery-and-resilience-plan-for-europe.pdf
    6. p.9, 21,and 27 https://assets.ey.com/content/dam/ey-sites/ey-com/fr_fr/topics/power-and-utilities/02-09-2020/covid-19-pour-une-relance-verte-et-resiliente-en-europe/a-green-covid19-recovery-and-resilience-plan-for-europe.pdf

Summary

Europe is set to become the world’s first continent to be climate neutral by 2050. A purpose-driven and sustainable growth in strategically important sectors will redefine this new era and future jobs.

About this article

Authors
Antonio De Rose

EY Resilient Infrastructure and Green Development Leader for EU institutions

Environmental engineer. Passionate about mega trends and sustainable infrastructure. Inspired by jazz music, painting and art.

Alessandro Cenderello

EY Managing Partner for EU institutions

Proud citizen of the European Union and advocate for diversity. Music, food and wine lover.

Alexis Gazzo

EY France Climate Change Leader; Partner, Climate Change and Sustainability Services, EY & Associés

Helping businesses and governments engage in low-carbon strategies. Creating and protecting long-term value for clients.