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.