How labour market policy and climate protection are connected, and why structural change will not work how it has until now this time.
Johannes Kopf is chair of the PES Network and managing director of AMS, the Austrian public employment service. This article reflects the personal opinion of the author.
The question of how we want to rescue our climate has already been decided politically. Neither will we transform ourselves into a post-growth society to stop global warming, nor will we be living in Christian Felber’s common good economy tomorrow. The US governmental programme the New Green Deal and Von der Leyen’s European Green Deal pursue, as do the Sustainable Development Goals agreed by the UN, the goal of green economic growth. At the same time, environmental innovations should make it possible to completely resolve the more than 100-year-old conflict between the targets of economic growth and environmental protection. And in fact, a whole host of interesting model calculations now provide credible evidence that through sufficient technological innovations not only are more raw-material and energy efficiency possible, but that even falling levels of environmental pollution with simultaneously increasing economic growth are achievable.
These are the hopeful forecasts which politicians are using as the basis for their current reforms. However, since there are also important dissenting voices, and the future is inherently uncertain, it makes sense, not to rely on the power of technological innovation alone, but also to promote social innovations. One or two of the ideas of the supporters of the common good economy can be borrowed most profitably here, whether it is, for example, the shared use of specific resources, or the promotion of more environmentally friendly behaviour, for instance in the areas of consumption or mobility.
Purely from an employment policy perspective, as head of a labour market administration organisation, I fear neither climate change nor the fight against it:
The fight against climate change
With the ‘investment plan for a Europe which is fit for the future’ the EU Commission has announced its intention to mobilise more than a trillion Euros of public and private investment in climate-related projects in the coming 10 years. More than 100 billion Euros a year will create a whole range of additional jobs. Not only can strong growth be expected in new professional fields, but also massive increases in classical professions such as, for example, those of plumber or solar technician. As, for instance, Christian Mikovits from the Institute for Sustainable Economic Development at the University of Natural Resources and Life Sciences in Vienna said recently, you would have to install 400 solar power systems per day in Austria alone if you want to achieve the national goal of obtaining all electricity from renewable energy by 2030 only on roofs.
Climate change adaptation
One job-creating engine which, to my mind, is at least as big, which already works now, is climate change adaptation. For it is already hotter anyway. That is why, for example, cities must be covered with greenery; houses insulated; rainwater collected; old people’s homes, hospitals and schools provided with shade; natural hazards averted; and more climate-compatible trees planted.
So, all in all, there will be additional and new work.
Despite all this confidence, my concern remains the courage needed on the part of politicians.
Since industrialisation there have been multiple periods of fundamental structural change, as is necessary now in connection with climate protection. The Russian economist Nikolai Dmitriyevich Kondratiev described this in 1926 in his theory of the long waves. The theory, developed further by Schumpeter later, shows that fundamental technical innovations have led to comprehensive radical changes in the economy, production and on the labour market every 40 to 60 years. The causes of the 5 Kondratiev waves since 1800, later named after their discoverer, were the (stationary) steam engine, the railway, electricity and chemistry, the automobile and information technology.
The innovations mentioned changed almost everything and triggered massive economic growth with many new jobs. At the same time, however, an enormous number of people lost their existing jobs. This began with the weavers, who produced materials as homeworkers, who were suddenly out of work in their thousands because of the steam-driven loom. Later coachmen, cinema musicians, the switchboard girl and typists lost their jobs, to name but a few of those affected.
It was always difficult, partly impossible too, to retrain people who had become unemployed due to technological change to do completely new occupations which were in demand. To this day, this is a very important core task of modern labour market policy, and that is why we have a lot of experience, for example, with the labour-foundation model in Austria, which is exemplary for Europe, and which has had clearly demonstrable successes.
Consequently, it would be natural to see the fight against climate change and the investments triggered by the massive amounts of state support as a new Kondratiev wave and to look full of hope to the future. What has already gone quite well five times, will probably also go well a sixth time.
And yet, to my mind, this conclusion is too simple. All previous fundamental changes on the labour market mentioned were triggered by innovations which could not be held back because of their advantages for people individually. The “long waves” lasted 40 to 60 years, respectively.
This time, however, three things are fundamentally different.
Firstly: we do not have 40 to 60 years to rescue our climate.
Secondly: the individual will frequently not only have to give priority to societal advantage instead of to personal advantage, but often even be forced to accept personal restrictions.
Thirdly: the driver of change cannot be the individual advantage from technological innovation this time, but it must be politics in the form of the legislator. Namely, it is not enough just to subsidise electric cars, for example, the legislator must also make the use of cars with combustion engines much more expensive, or even prohibit the sale of such new vehicles in the foreseeable future. It will presumably not suffice to make flights in Europe considerably more expensive with tax surcharges, they will presumably also experience restrictions at some point, for instance on short-haul routes, as oil-powered heating systems are no longer permitted in new buildings.
Measures of this kind, which are necessary for the future, do however cost real jobs in the present. Electric cars require less maintenance, stewardesses lose their jobs, heating-oil tanker-truck drivers become superfluous.
In all these cases it is not the technological innovation which makes these people unemployed, but the decision by the politicians, who must, naturally, also take the responsibility for this. And there is no other issue on which politicians are as blackmailable, as on the protection of jobs. At the same time politicians must also see to it that society lends its support to the necessary legal restrictions. How quickly the political opposition shows solidarity with, for instance, coal miners threatened with redundancy, can currently be witnessed in Brandenburg, where there has been a massive swing to the AfD (far right party), also among trade union members, because coal fields are threatened with closure.
That means therefore: climate protection is simultaneously and essentially labour market policy. For answers are needed for all those who may accept the societal necessities, but who want to know that their personal living situation is secure. Politicians who do not understand or heed this context will never have the courage to, or be able to defend the power to, push through the drastic climate protection measures necessary.