Green Jobs Transcript
This is extremely timely. The Obama campaign has tapped into this idea of green jobs, sustainable jobs.
The essence, in my view, captures the need for work worldwide—decent work—and for the economy to be sustainable. These themes come out in interviews I have had all over northeast and southeast Asia. Jobs are where the rubber meets the road of a policy issue and a local issue, as well as how people view their immediate surroundings.
I was in Beijing last week. I would love to tell you about those meetings. But we have six panelists to get to, so I'm not going to take much time. I would really like to get right into the report. It's from the ILO [International Labour Organization] and others.
I'm going to turn it right over to Michael Renner, who is Senior Researcher of the Worldwatch Institute. He is one of the authors of the report that, again, just came out a few days ago. So this is a real treat, to have you guys. Thank you so much for coming.
Michael Renner, please take it away.MICHAEL RENNER: Thanks very much, Devin, for hosting this meeting. Thanks also to Kevin Cassidy, right in the front row here, of the ILO, for organizing this meeting.
As Devin just said, green jobs seems to be a very timely issue. Certainly, I think with the news that is, of course, breaking as we speak, in terms of the financial crisis. I think that is really a very strong reminder that in many, many ways the economy—and, by and large, that means the global economy rather than just the U.S. economy—is one that may not work terribly well in terms of jobs and livelihoods. There are certainly a number of questions in terms of the environmental sustainability.
So I think both of these issues are extremely important. Green jobs is, of course, the issue that is really sort of at the intersection of economy and environment.
As you may know, over the past year or so in particular, "green jobs" has been a term that has been used more and more. What we found is that there really is not a single definition as such. We did not really attempt to come up with a particularly clever or narrow one. We, rather, decided that we would approach this by regarding employment that substantially contributes to preserving or restoring the quality of the environment as fulfilling the category of "green jobs."
What we did do—and I think this is something that is really quite important—is that we came up with the concept of "shades of green."
When you think about it, particularly in the context of the global climate challenge, across the entire economy there is a tremendous challenge in really doing things differently—decarbonizing so many industrial and other activities.
Clearly, as industries and communities and governments and individuals attempt to do this, the different measures that are undertaken will, of course, get us a little bit ahead or perhaps a very big step ahead. So you will find a whole array of different measures. In some cases this may just be a very light shade of green, a slight improvement. In other cases it may really be a huge step ahead.
We did not want to be too judgmental, because, clearly, particularly in the short run, we cannot expect everything to turn around from one day to the next.
So we employed this term "shades of green" to indicate that there are really different degrees to which we can expect progress toward a more sustainable economy.
In terms of the job effects, broadly speaking, in many cases you will find that moving from less sustainable to more sustainable tends to be also more labor-intensive. So on the whole, it is quite likely that we will gain jobs in this transition. Some jobs obviously will be in danger or will be lost, such as in the fossil fuel industries, in mining, and some other highly polluting sectors. Sean Sweeney, to my left here, will address some of those issues later on as well.
In addition to the question of job gains/job losses, some employment will also be substituted—for example, if we move from fossil fuel industries to renewables, and to the extent that we move from a car-centered transportation system to one that is more balanced in terms of its modal mix, embraces rail and urban mass transit more than it does now, or moving from waste disposal to recycling, for example—those kinds of substitutions.
We will also see—and I think this will ultimately affect far greater numbers of jobs, and ultimately, really, all jobs—there will be a certain kind of transformation, which may not be terribly visible. This may entail things like workplace practices that shift in perhaps very subtle ways. It may change methods and technologies in different occupations. It very often will include things like greater efficiency of the use of energy, materials, and water. It may not be visible, but it will be very, very important.
So let me just very briefly talk about some of the main sectors that we look at in this report.
The first one concerns the energy industry. We specifically looked at renewables. As you may all know, renewables like wind, solar, photovoltaic, solar thermal, biofuels have seen rapid growth over the past several years. We now find, on the basis of existing studies and reports, that there are at least 2.3 million jobs in renewables worldwide.
This is a very conservative estimate. It includes about 300,000 jobs in the wind power sector, about 170,000 in solar photovoltaics, more than 600,000 in solar thermal, and about 1 million in biofuels and biomass. Projections are that in most of these sectors we will see continued rapid growth over the next few years and decades.
So that's very positive news. Of course, also the renewables jobs—the people who make and install solar panels, the people who put up wind turbines—those are among the most visible of green jobs. But as I said before, there are many, many others that are less visible, but nonetheless also very important—transportation, for example.
We see some movement toward producing more efficient automobiles. That can be seen as at least a light shade of green. We did a rough calculation, based on sales-weighted data for Western Europe, the United States, and Japan, and we found that the jobs that are bound up with producing the most efficient automobiles amount to about a quarter of a million jobs in those parts of the world, out of about 4 million all together. So it's still a relatively small portion.
In other countries that are important—China increasingly, India, Russia, Brazil—unfortunately, we can't quite do the same kind of calculation, because the data that would be required for that are just not available. This also speaks to a point that generally holds: We do need far, far better data if we want to gain a better and better sense of just how many green jobs there are worldwide.
Now, more efficient automobiles are important, but ultimately we need a better modal mix. We need, as it were, a revival of railway systems, which have eroded very, very strongly in many countries and have actually led to job loss in rail systems, including even in countries like India and China, but also here in the United States and in Europe. A renewed commitment and new investment in modern rail systems is really essential and could lead to very large numbers of green jobs around the world.
The same is true for urban mass transit, where there is evidence of some revival in certain countries, in certain cities. For example, so-called bus rapid-transit systems are becoming very popular on all continents. We see movements, as we have seen here in New York City, to replace old diesel buses, which are very polluting buses, with CNG buses or hybrid electrics.
Just on the way here, riding the subway, I actually noted a little advertisement by the MTA which said, "We were green in 1960 and we're even greener today."
I think that speaks to that. By and large, public transit systems are far greener than an automobile-centered system—not to say they are perfect, but they are certainly comparatively preferable from this perspective.
Moving on to another sector that is very important: buildings and construction: There is a huge existing housing stock which needs to be retrofitted, weatherized. This is really a huge opportunity that needs to be taken up.
We have some evidence from countries like Germany and France and others that indeed by weatherizing existing buildings, we can both generate new jobs in the construction industry and also make sure that existing ones are retained. The German case, for example, shows that even at a time of recession, they were able to save many tens of thousands of jobs that otherwise would have gone by the wayside.
The same, of course, is also true for new buildings. We have a building boom in Asia, particularly in China. Ensuring that new buildings that go up meet reasonably decent green-building standards is essential and again can help to green this massive industry, which, by one estimate, employs about 110 million people worldwide.
Let me move on to recycling. When we talk about recycling, the most visible aspect, of course, is the curbside collection systems that operate in many cities. But the recycling sector as a whole is far, far broader. It does include, of course, materials collection and recovery, but it also does include sorting and processing. It includes scrap-based, so-called secondary manufacturing in many basic industries. It also includes remanufacturing of appliances, equipment, and so on.
Particularly, we looked at a number of basic industrial sectors: iron and steel, aluminum, paper, and cement. We found that these are among the most energy-intensive and polluting industries that there are. But going with a scrap-based system of production—in other words, taking scrap materials and bringing them back into the production process—saves enormous amounts of energy and can also help retain jobs that otherwise are in danger of being lost.
We don't have very good figures, but we know that in the steel industry probably about 200,000 to 250,000 jobs are bound up in so-called secondary production. In aluminum, it's a smaller figure. In Western industrialized countries, probably about 30,000; perhaps an equal number in China. We don't really have very good data there. Again, the same is true for some of the other basic industries.
On the whole, China, by some estimates, has about 10 million people working in the recycling sector, broadly defined; the United States, about 1 million; Brazil, about a half a million.
I will conclude my portion of the presentation with this. We also looked at two sectors, agriculture and forestry, that again have really enormous potential for greening. But if we look realistically at the current trends, I think they are really, by and large, still heading in the opposite direction. In agriculture, many of the so-called smaller holders, small farmers, in developing countries are feeling an enormous squeeze and are very often driven off their land, often being replaced by very highly intensive industrialized forms of agriculture.
Organic agriculture is, of course, rising. Sales, I think, amounted to about $100 billion in 2006. But relative to the entire agricultural system, it's still a fairly small share.
The same is true in forestry. There are efforts to certify sustainable ways of doing forestry, but illegal logging, in particular, is very, very rampant. It's a problem that I think we barely have a handle on.
So while there are opportunities to do things in a more responsible manner, in a more sustainable manner, we really have a very long way to go.
But I think again that the need and opportunity to respond to the climate change challenge—in other words, to ensure that agriculture and forestry do not contribute to the buildup of carbon in the atmosphere, but rather help us get into a better position—are enormous, in terms of rebuilding the agricultural system, ensuring that we cut down on deforestation, and cut down on illegal logging. The potential is enormous, but I think also the challenge that we have ahead of us is equally large.
So I'll stop there and hand it over to my colleague, Jill Kubit.
DEVIN STEWART: Before we get to Jill, just a couple of comments.
I just want to highlight your shades of green. That works very well with a principle that we try to promote here at the Carnegie Council called pluralism and fairness, as well as three pillars that we see as building a more ethical world, and also a theme I heard many, many times in China last week. There are many ways to let a thousand flowers bloom. There are many ways to reach a common goal.
I just want to bring your attention to this Tom Friedman op-ed this week. Essentially, since Congress has bailed on us, he's calling for a green bailout, which would, instead of leaving a bunch of empty homes, leave an actual infrastructure in place, like the railroad boom did and the IT boom did. The current boom is producing, as he put it, empty homes in Florida that can't produce much. For the next boom, we hope that there could be some long-term investment in place.
I'm going to turn it over to Jill Kubit. She is Assistant Director of the Global Labor Institute at Cornell University, and she is one of the authors of this report.JILL KUBIT: Thank you, Devin. Again, thanks to Kevin, who organized this, and to my colleagues here, Michael and Sean.
The potential for green jobs growth is actually tremendous. As Michael pointed out, we see 2.3 million jobs in the renewable energy sector that we currently have. Some of the projected numbers that people talk about are as follows: If there is the right level of investment and the right incentives, we could see 8 million jobs in solar and wind by 2030, and during the same time, we could see 3.5 million jobs in retrofitting buildings in the European Union and the United States.
Although these findings are considerable, they need to be evaluated against the current backdrop of the two major challenges we see that are facing humanity today. Michael talked a bit about this, but I'm going to just restate it a little bit.
The first challenge is to address the employment and the poverty crisis. There are 1.3 billion workers who earn less than $2.00 a day. This is 43 percent of the global workforce. These are people who are working who earn below poverty wages. Unemployment also affects 195 million people.
In developing countries, we see many people who are working informally. These situations are marked by very low pay, dangerous work conditions, and they lack a safety net.
In addition, 1 billion people lack basic services to adequate housing, access to energy and to clean water.
The second challenge is one Michael already talked about, and that is climate change: How do we reduce greenhouse gas emissions? Stabilizing the climate requires a major transformation to our current infrastructure. This means the way we see our entire infrastructure—our buildings, our transportation systems, the way we use energy, materials, the things we produce, the things we consume, water, and waste, and industry. I'm sure I'm leaving some stuff out.
What we attempted to do in this report was to put these two realities together and address both of them. We state that in order to make this transition to a low-carbon economy, we actually need people to do this work. We need people to manufacture and install solar panels and wind turbines. We need people to design and build green buildings, retrofitting buildings, expanding our rail and our public transit systems. We need people to plant trees. The list goes on and on.
In essence, investment in transition to the new economy will create green jobs.
It is through this lens of both addressing climate and addressing poverty that we need to assess the current state of green employment and identify the challenges to growing them.
The first challenge is, how do we scale them up? Green jobs are expanding, but it is not fast enough to meet these two global challenges. By and large, renewable energy, efficient vehicles, green buildings, public transit, sustainable forestry management, and the list that Michael talked about—these are still niche markets. They account for very small shares of the total market volumes. We are talking about less than 5 percent. In most cases it's much less, and in most countries it's very low.
In addition, we have seen relatively limited progress in greening of the economy and the creation of green jobs when you compare it to the expanding labor market. The labor market is expanding by tens of millions of workers each year. For 2008, the ILO estimates that there will be 40 million new jobs, most of which will not be in the green economy.
The second major question we asked ourselves is, how do we distribute these jobs globally? In order to meet our stated GHG [Green House Gases] reduction goals, we need to green all aspects of our economy. However, the vast majority of the jobs discussed in the report are concentrated in a small handful of countries—mainly, the European Union, the United States, Japan, and some developing countries, like China, India, and Brazil.
The top five countries, mostly in the developed world, control 72 percent of global wind capacity. Germany, Denmark, and Spain are leading the way. For PV [Photovoltaic] solar installations that are on the grid, Japan and Germany again account for 87 percent. In solar hot water, China has 65 percent. In fuel ethanol, the United States and Brazil hold 90 percent of global output.
Another startling fact is that one out of three of all solar panels and all wind turbines are made in Germany.
With few exceptions, large parts of the developing world are almost completely excluded from the green economy. When you do see large numbers—we talk about recycling, and that there are 10 million jobs in China—these jobs are often in the informal sector and they are often poorly paid; they cannot be considered decent. You also see large numbers in biofuel production as well in Brazil, but again the same thing holds true.
The point about the distribution of jobs is underscored if you take a look at the investment in the green economy. In 2006, 82 percent of global renewables investment was in the OECD [Organization for Economic Cooperation and Development] countries, with Europe and the United States taking three-fourths of the investment. China had 7 percent, India 4 percent, Latin America and the rest of the developing world each had 3 percent—3 percent for Latin America and 3 percent for all of the rest of the countries.
For the most part, these green jobs are not reaching those who need it the most, the 80 percent of the world's workforce located in developing countries.
Whereas jobs in technology, development, and manufacturing are still limited to a handful of countries—and we project that it will probably remain so—jobs in installations, operating and maintaining renewable energy systems, and weatherization of buildings could become green jobs in a far broader set of countries. We already see promising solar initiatives that can be found in countries like Bangladesh and Kenya.
Alternative energy and energy-efficiency projects in developing countries will need to be scaled up dramatically and will need to find a funding mechanism in order to do so.
I'm going to conclude with the last challenge. We see it as, how can we make business practices more sustainable?
A major driving force behind the inadequate magnitude of green jobs rests in our current economic model. For publicly traded companies, the obligation is to shareholders, whose interests lie with keeping costs down and increasing profit margins.
Although this is starting to change with the introduction of carbon-trading schemes, pollution is predominantly an externalized cost, and there is little incentive for reducing it. This keeps unsustainable fossil fuel industries and highly polluting industries very profitable. In 2007, Exxon Mobil reached a record profit of $40.6 billion.
In addition, publicly traded companies are often encouraged to maximize short-term profit. This can come at the expense of long-term solutions, even if these solutions do make economic sense in the long run.
A transition to a low-carbon economy and growing green jobs requires more long-term thinking. In the long run, companies that are leaders in green design, technology, and product innovation will end up being able to retain jobs and to create jobs, while those that resist the transition can see substantial business loss and job penalties.
A do-nothing strategy will simply make the adjustment to a greener economy far more costly and disruptive. But the current economic model clouds this thinking by placing greater emphasis on the short-term gain.
That's the conclusion of my report.
DEVIN STEWART: Thank you very much, Jill. It's rare to have all the authors from a report here, so we can hold them accountable. If you have any questions, I'm sure they can answer all of them.
We now have the final author, Sean Sweeney, who is Director of the Global Labor Institute at Cornell University.SEAN SWEENEY: Thanks, Devin. Thanks, Kevin.
Just a few more points to underscore some of the things that Jill pointed out.
One of the issues around the report that we grappled with over the eight or nine months that we worked on it was, how much do we present an optimistic picture of green jobs, and how much do the data support that optimism, and how much do we stress what needs to be done? I guess my concluding comments are more towards the latter.
Having said that, I see it as very much a tip-of-the-iceberg situation. The question is, how will the iceberg be revealed? How will it actually happen?
When we talk about a transition, one of the things I think we have to guard against is this idea that the transition to a sustainable green economy is inevitable. If you listen to some of the discussions in the policy world or in the media or from companies, they say, "Well, of course, this is a foregone conclusion. We have to change. This is going to happen. It's inevitable."
But when we look in the cold light of the day at the extent of the challenge we face, we have to have a global transition at a speed that's probably in the realm of maybe two decades or three, maximum. It has to go against the existing trends. That is a very big ask of human society at this point in history.
We have never had a just transition. In all the economic transitions you can think of, there have always been many, many losers, some winners. Now we've got to manage a transition which is faster, global, and against the trend. The data coming out this week about CO2 emissions points to, again, acceleration of CO2, not a slowdown, not a reduction, on the global scale.
So the task is really big.
The investment issue, I think, is critical to this. We see very encouraging investment in renewable energy, which is what you would expect when oil has gone through the roof and is fluctuating dramatically.
Some of this, of course, is companies and countries wanting to be green, but a lot of it is just pure profiting and making money out of green energy and putting the investment there—but not to be discouraged. A hundred and fifty billion is an exponential increase on investment, even at the beginning of this decade, 2002-2003. So it has gone up maybe four times and will continue to go up, we expect.
But if you look at the Stern Review that came out about two years ago, it pointed to a 50 percent reduction in R&D in terms of clean technology. What we have seen from 1980 onwards was a real drop. Once the crisis of the oil shock of the 1970s was perceived to be over, then the investment fell off. We have to be very careful that that doesn't happen again.
The International Energy Agency has warned against "short-termism," something Jill touched upon in her comments. They said—and I quote from one of their reports—"R&D investment is simply not adequate, given the magnitude of the climate challenge."
So there is a lot more investment that has to come from somewhere.
Unfortunately, there is a lot of investment still going into the fossil fuel economy. The oil companies, of course, and the coal companies are putting money into the continuation of this form of energy production, which is destroying organic life and threatening human civilization.
This is something which is a really serious problem. The subsidies alone for fossil fuel—and some of it is implemented by the World Bank and the other international financial institutions—dwarfs the amount of money being invested in clean energy. So this is a serious problem—up to maybe $250 billion a year in subsidies.
Then you have the issue that, in just one project alone, the ecological catastrophe known as the tar sands extraction in Alberta has attracted up to $100 billion in projected investments by 2020. Already, $50 billion has gone into that project. This is a massive, massive problem ecologically, and it's not actually helping meet energy needs in a serious way.
Another issue around investment is the question of carbon capture and storage, or sequestration, as it's sometimes called. I'm not sure how many people in this audience are familiar with it. I won't go into the techniques involved, because I don't know much about it myself.
But I do know that the level of investment in carbon capture is so low that they are not expecting carbon capture and storage to be at commercial scale for at least another 20 years. That's if it's started immediately. What we are seeing is a few pilot projects—FutureGen was one in the United States, recently closed down—that are promoting carbon capture.
It's very controversial. But aside from the controversial aspects of it is the fact that the power companies don't want to put up the tens, if not hundreds, of billions of dollars necessary to develop a technology to demonstrate it and then put it on the market. The return on investment is decades away. That's one of the problems we have. The private markets want returns fairly quickly. They can't imagine an economy 20, 30 years out, in many instances.
So these are some of the issues.
We know, through the events in the United States and around the world this week, there is money available, if we have the political will to make it available. The bailout dollars are enormous. Before that, there was the Northern Rock nationalization and the Royal Bank of Scotland, $100 billion in the United Kingdom. So there's a lot of money available—$1.2 trillion spent annually on military expenditures. More than half of that is by the United States.
So it's not that we don't have the money. Think of the money necessary for the Millennium Development Goals to be achieved, which could make a major contribution to creating green and sustainable work, if that money was made available.
My last couple of points are on the worker issues. Jill and I work for the Global Labor Institute, and as you can probably tell by the tone of my comments, we take a very pro-worker perspective on a lot of these questions. The concept of a just transition is that in this transition that we hope will happen to a green and sustainable economy, the risks and the benefits should be shared by everybody.
A coal miner in West Virginia should not pay the price of solving the climate crisis. They should be protected and supported. This concept came from the United States labor movement, with the late Tony Mazzocchi and the Oil, Chemical, and Atomic Workers, who modeled this idea that workers should get support on the GI bill that came during World War II and after World War II that supported people through college and retraining when the military jobs were no longer available to them.
What we have seen as this targeted approach to just transition to support workers affected actually needs to be applied now to the whole global project, which is going to take 20 or 30 years. It's not a question of a safety net. Just transition, supporting workers, is actually a restructuring program for very much the whole economy.
In the report we take on some of the issues around what they call "flexicurity" in Europe, the whole debate over supporting workers' rights and access to employment, even if certain jobs must go as a result of competition—in this case, climate protection.
My last point here is, the issue in terms of just transition is, how do we take charge of the transition politically? How do we make sure that resources that are available to human society are used to expedite the transition and to scale up green jobs en masse?
Left to present trends, the green jobs will be expected to grow, but they are not going to grow at the speed they need to grow, and the tools for doing that will not get in the toolbox fast enough to really address this pressing climate challenge, as well as the employment challenge.
DEVIN STEWART: Thank you very much, Sean. I have been hearing this phrase "scaling up" a lot these past several days, especially as we look at climate change. I think the urgency of climate change and also the need to scale up make a very good case for international cooperation. I know there are a lot of obstacles to international cooperation. But those two sort of core pillars—the survival of the species, and the need to make initiatives much bigger than just the national level.
We are going to get some commentary, working from the outside in. We are going to start with Peter Poschen. He is Senior Policy Specialist at the Policy Integration Department at the ILO. I'm sure he's going to integrate a lot of different comments. Then we are going to take it inward and turn it to the audience.
Peter, thank you very much. I look forward to your comments.PETER POSCHEN: Thank you, Devin, on behalf of the International Labour Organization, for having us.
I think it's very fitting that we should have this discussion in an organization that discusses ethics in international policy, because green jobs is really at the crossroads of two big ethical questions. One is social justice and the other is climate change and an intact environment for current and future generations. I think that one cannot be achieved without the other.
I want to make three points in my comments, two which I see as salient points that come out from the report. One is that climate change is a workplace issue. It's not an environmental issue. The second is that equity will be key to redressing both the social justice crisis and climate change. The third one is an outlook from the perspective of those who initiated this work as to where the Green Jobs Initiative thinks this needs to be taken so that we get traction on it.
Climate change has so far been discussed mostly in environmental circles, and the climate change negotiations are still mostly between ministers of the environment. I think what this report and what others have made clear is that climate change is much more than an environmental issue, and if we are to address it, we are looking at a major transformation of economies and of societies that will affect the way everybody works and consumes.
It's something on the scale of the Industrial Revolution, but it needs to happen faster than the first Industrial Revolution happened.
It's a workplace issue and it's also a development issue. If developing countries are going to be denied their rights to development as a consequence of measures that need to be taken to reduce emissions, then it's a nonstarter. I think we should have no illusions about that.
One of the important message from the report is that the world does actually not have to choose between protecting the environment, arresting dangerous climate change, and development. If you do it right, if you orient investments in the right direction, you can address both simultaneously.
But as the report also shows, that is by no means a foregone conclusion. The business-as-usual scenarios will realize only a fraction of the benefits that are possible. Given the timescales on which we need changes, they will fall far short of addressing either the social problem or the environmental crisis.
The second one that I think is important to retain from this report is that equity will be crucial for the political sustainability of any new climate deal. Industry is calling for stable investment frameworks. A new power plant has to live for 40 and 50 years and generate a return. So you need stability in the way that the investment incentives are set and that prices will develop over time.
But there is no way that stability can be generated if there isn't an equitable deal. Take the example of trade, which was sold as a win-win for everybody, until it dawned that that was not so. The support for liberalizing trade is eroding because of that, because people were sold on an illusion about everybody winning in this.
The rescue package for Wall Street failed, at least in its first attempt, arguably because it was not seen as a fair deal.
Similarly, there will be no climate deal if there isn't equity between countries, industrialized ones with their historical load of emissions and the developing ones that in the future will have to take part in this effort.
We see green jobs as a concept that helps to square that circle. It can bring those, at first sight, conflicting objectives together. From our perspective, from the ILO and from the United Nations Environment Program, we see this as our contribution to the climate debate, and as a positive contribution to this debate, something that should help to reach an agreement.
It is, in some ways, a totally new coalition, that you have environmental agencies working with labor agencies together in addressing a common problem. The fact that the International Trade Union Confederation and the International Organization of Employers have joined that initiative and are part of the Green Jobs Initiative I think is hopeful. We need broader and broader coalitions across social and economic groups to make the changes happen in the time that we have.
To get that, we need coherent policies and we need engagement, active engagement, and support from major stakeholders, and we need their know-how. I think it is essential that business and workers and their representatives are part of these negotiations, that they help to inform the policies. They will be more effective and more efficient policies because they are richer, they are better informed about what is happening in sectors and enterprises in different regions and community, and they will be able to use the support of those groups in their implementation and make them steadier.
The report has been a passive effort of collecting information that is out there. It shows that there are enormous knowledge gaps. Something that the Green Jobs Initiative will do in the next step is to drill down and look at individual sectors.
A lot of the dynamics that we are seeing, job dynamics and economic dynamics, will actually be within individual sectors—for example, the transport sector; for example, the power sector. We need more clarity about how this will play out and how we can seize opportunities and get just transitions for those who will be at the receiving end of change.
We need to be more country-specific. We need to be more region-specific. We are planning, together with the United Nations Environment Program, on the second phase that would bring together a green economy and a green jobs program to address the economic viability, the investment needs, and the job implications in one goal, in one package.
DEVIN STEWART: Thank you very much, Peter. Just to highlight two themes, equity, the need for fairness, is a concept that we would like to advance in international relations at the Carnegie Council. It helps overcome the prisoner's dilemma. If you have trading partner or a negotiation partner that shares your starting point of a fairer world, then you can actually achieve a more equitable result and actually a more efficient result, because you are more likely to come to a sustainable and actual agreement.
Norine Kennedy is next up. She is Vice President at the Environmental and Energy Department at the U.S. Council for International Business.
As usual, we have a pluralistic discussion here. We have international organizations, we have NGOs, and we have business associations as well. I don't know if that's how you describe the USCIB. It is advancing business interests. I wouldn't say that business interests are exclusive from the rest of the world, but I would say that this adds a lot of balance and credibility to this panel.
It's great to have you, Norine. Welcome and take it away.NORINE KENNEDY: Thanks very much for that introduction.
I would just like to add my voice in welcoming this report and this initiative. I think we have come a long way. I'm sure all of you remember, those of you who have memories reaching back to the prehistoric times when we talked about environmental protection as something that went contrary to job creation—now we have a report that is talking about environmental protection as a catalyst for job creation. So that's a very good thing.
The organization that I work for is based here in New York. We are the U.S. representative for a larger organization called the International Organization of Employers, which interfaces with the ILO. In our constituency and membership, we represent some 135 employers' federations, in countries both developed and developing, and within our membership we have a very wide range of, obviously, nationalities, but also sectors and sizes of companies.
I guess that's my first point: We don't have a single monolithic business voice. Hopefully, that pluralism and diversity, and sometimes cacophony, will be a resource for this report and speak to many of the different sectors that the authors have spoken to, which I'm sure we will go more deeply into as the initiative continues.
From the perspective of how this report will go forward, I think it has very successfully made the ethics case. It has made the social case. It has made the environmental case. I'm not sure it has yet made the business case. I think that that's imperative if we are going to see these transformative moves both in developed and developing countries.
I think, from an IOE perspective, from a business perspective, we are very glad to see the focus on jobs and workplaces as a place in which progress can come and is coming already. That's very positive—the focus on markets, even when markets are messy and not functioning optimally, the importance of enabling conditions, because I think, more basically, we are not going to see job creation in countries unless we have the right conditions in place. Those are the most basic conditions: human rights, democratic process, enforcement of rules, and so on.
We need to have partnerships. No single sector can do this by themselves. Certainly we don't expect the governments to make this right. It's not going to happen just top-down. We are going to need all the different interest groups, notably business, to come forward. Then again, we are going to need to make a business case.
I think in OECD countries' business communities, I would say we have climbed the learning curve fairly well, and we understand the synergy, that pursuing more environmentally responsible manufacturing processes and products, and behaving in a more responsible way, is going to open new markets to us. It's going to grow our businesses and hopefully bring value to consumers and investors.
I think less clear—and we would like to see it become clear in the course of this initiative—is that business can also make a tremendous contribution to solving sustainability challenges, bringing resources to bear on sustainability challenges.
I think in the UN Framework Convention on Climate Change one analysis showed that some 85 percent of the resources needed for mitigation and adaptation was going to come from the business community. If that's in fact going to happen, I think the business case is going to have to come through much more strongly, and I think particularly in developing countries.
Just as the business community is not monolithic, I don't think we can make oversimplifications about developing countries either. We have developing countries like China and India, with growing middle classes and rapid economic growth, and then we have the most vulnerable developing countries that have very different needs. The meaning of green jobs in those more vulnerable countries is going to be very different.
A quick word about definitions. We very much appreciate that there is a basic acceptance that we are talking about a range of shades of green. But I would take it one step further and say that rather than concentrating on green as an adjective, we also think about green as a verb, and that we think about greening all sectors and all jobs, both those that exist and those that are going to be created.
Definitions do matter. It's part of making the business case, so people understand what we are talking about, who we are talking about, so that we can make a persuasive case. Certainly within the IOE and within different national circumstances, we know that there are different views of what green constitutes.
Is the nuclear industry considered to be green? Is biotechnology considered to be green? Is hydropower considered to be green? Depending on where you sit, I think you will hear very different answers. I'm not necessarily going to try to argue about their validity or lack of validity.
I also think that we have to be a little careful in making the green case to developing countries. Again, not to oversimplify, but to say that, at least for my business colleagues in developing countries, they hear "green" and they think, "Expensive, difficult. What you guys can do in the United States, but we can't possibly do, because we don't have the resources. We're small companies and we have bigger problems to face."
So I think that part of the challenge as the initiative goes forward is how we mainstream this idea, how we make "green" a verb, as well as an adjective, and also how we tailor it and understand that it has to be flexible and it has to be accessible for industry sectors across the spectrum and in developing countries, as well as developed countries.
In terms of markets and regulation, obviously we have seen some tremendous downsides of deregulation and lax regulatory enforcement over the last few days and weeks. But I would also say that poorly designed or mis-implemented policy isn't going to help us either. I think our recent experiences here in the United States with ethanol are a very good case in point. So we have to think very hard about the kinds of policies we put in place and the kinds of markets that we do create.
But certainly open and diversified markets are going to be critical. I think that this is a time when we want to try to keep all tools on the table. The business community has many tools at its disposal, which it needs to use more and deploy more.
By that I mean something as basic as management systems, environmental management systems—the ISO 14000, for example. There are other management systems coming forward under the International Standards Organization that deal with organizational responsibility, that talk about energy management systems. These are things that I think can be deployed.
Likewise, through supply chains and joint ventures and business-to-business partnerships, there are some dynamics there that we are not taking advantage of enough and we need to deploy further.
So in addition to partnering with governments and with other stakeholder groups, just working within our own business community is going to be very important.
Where would we like to see this work go next? As I said, one thing that is going to be very important, I think, is that business case for developing countries and understanding that the business case is going to have to be flexible. How we ramp up technological innovation and deployment, both in the private and public sectors—I agree entirely that the trends have been very negative on R&D. We have to turn that around very radically.
In terms of looking at the different sectors that the report has already covered and we will be looking at as the initiative goes forward, I think it's important to think about sectoral connections.
For example, Michael talked about public transportation. But then in my organization we have seen a lot of push now from the ICT [Information Communication Technology] industry, saying, if you use ICT, through things like videoconferencing and using more Web-based things, you don't even have to get on the train to go someplace. We could all be meeting right now in the comfort of our own homes.
So I think we have to think about how the green goalposts are going to continue to move, and that we are flexible and that we do understand the sectoral connections upstream, and downstream as well.
I guess I'll make a final comment about whether or not this is inevitable.
I know we like to say in my organization that "business as usual" is not a static idea and that if you are not changing and evolving, you are out of business very rapidly. So to some extent, this is inevitable. But I think there are also some challenges, very strong challenges, ahead.
I would say this is not a time to take tools and options off the table. A lot more does have to happen in the various stakeholder groups that are represented here.
We certainly look forward to working within this initiative to understand better, as I said, how we drive greening across all sectors, how we can mainstream this idea, how we can make it more accessible, how we can really build the business case, particularly in the different developing countries, for this, and to try to think of how we can bring business tools forward and demonstrate business benefits and to think about what the enabling conditions are that will optimize this and help spread it.
I'll close there and pass it to Heather.
DEVIN STEWART: Thank you very much, Norine.
Knowing what you are saying and being able to say what you mean and knowing what your partner is saying—I think this is a struggle that human beings have had for thousands of years, as long as language has been around. I think it will always be there as something that we will need to grapple with.
I was reminded last week that the Confucian Analects, I believe, starts out with rectification of the names. In the Western tradition, you have Shakespeare and Plato, who dealt with words and their slipperiness. So I think this is something that we will continue to grapple with. I know our program here will continue to look at the ethics of climate change, and one of those ways will be trying to get a sense of what various partners think is fair and what people mean by what they say.
I'm optimistic about that initiative, based on last week's visit.
We are going to turn it over to our intellectual sibling—I don't know how else to put it. Heather Grady is Director of Policy and Strategy at Realizing Rights: The Ethical Globalization Initiative. We are the Carnegie Council for Ethics in International Affairs, and our program's motto is "For a Fairer Globalization."HEATHER GRADY: Thank you.
I'm very pleased to be here, especially on the last day of September, because my organization, Realizing Rights, has been working with the Campaign of the Elders, a group of 12 eminent leaders led by Nelson Mandela and his example. We have been having a campaign this year called Every Human Has Rights. The month of September is on the theme of decent work. So we have been looking at the issue of green jobs particularly in the context of this question of promoting a decent work agenda.
I know that the ILO, as well, links those up very much.
So I think I'll say today a little bit more about the decent work agenda and how Green Jobs fits into it, and especially look at the question of the informal economy.
As Jill said, the bulk of the world's workers actually work in the informal economy. We are looking at ways to make sure that informal workers become a real partner in the promotion of the green jobs agenda.
When I first heard the term and the concept "green jobs," I thought, what a perfect notion, one of those ideas that sounds like it's a win-win for everyone, and it should be able to gain ground fast. But when I look at the way we have been trying to promote decent work and the constraints that that has had, I think we will have the same on green jobs.
I think, Sean, you were really right to say that we have to turn some trends that are dominant right now.
I just want to start with a couple of words on human rights.
In just two months, we are going to celebrate the 60th anniversary of the Universal Declaration of Human Rights. What did that have to say about work? Article 23, in particular, guaranteed for all human beings just and favorable conditions of work, just and favorable remuneration, the right to social protection, and the right to form and join trade unions for the protection of workers' interests.
These are really the building blocks of a life of dignity for all. I think we have to think about this in terms of meshing the green jobs and the decent work agendas.
From the policy and practice side, when we talk about the concept of decent work, we talk about four dimensions:
- One is crafting macroeconomic policies that put job creation at the center of policies, and not just more jobs, but also better jobs.
- A second is strengthening human-rights standards for workers, whether they are on the farm, in the factory, or in the public sector.
- The third is promoting social protection.
- The fourth is promoting social dialogue between workers, employers, the government. We define it as civil society, very broadly.
But at the same time, we have to look at decent work from the perspective of the household and the individual in it. Most poor people don't have jobs in the traditional sense. For them, employment combines a variety of employment relations. They are not just one employee/one employer. In country-level decent-work programs, the interventions include things like supporting microbusinesses to become more formalized, to build dialogue between microbusinesses and local government, and enabling those who work in microbusinesses to benefit from social services, like a national health program.
I think these are the kinds of ideas we need as we take forward the green-jobs agenda. Ela Bhatt—she's the founder of SEWA, the Indian Self-Employed Women's Association, and a member of the Elders—was here last week for events on decent work that were related to the UN General Assembly. She reminded us of the size and the challenges of the informal economy. She said, "The link between poverty and growth is work." She reminded us further that women are key in everything that has to do with the informal economy.
So part of our challenge in making the green jobs relevant to those working in the informal economy is how to address these issues.
Michael, you defined green jobs, in a short way, as preserving or restoring the environment. I think if we take that as shorthand, poor people are often engaged in exactly this kind of work, because they don't have the luxury of working in sectors that are capital-intensive, skills-intensive, or technology-intensive. Further, the Green Jobs Report notes that green jobs are not automatically decent. They can be dirty, dangerous, and difficult.
While the media now reports on climate change regularly, it hardly mentions that the impact of climate change will depend much more on the development path of economies and societies than it will on the changes in natural ecosystems. Negative impacts can be cushioned or even averted if climate-change adaptation policies integrate these measures to address employment and income, as the report notes.
To do this for the world's working poor, I think we should focus on a few key things:
The poor face barriers to entry in labor markets and product markets that are often based on gender, class, and ethnic differences, and other axes of discrimination. A green jobs initiative, to be truly sustainable and transformative, should take into account these barriers from the beginning.
For poor people to overcome structural constraints that are facing them and increase their share of decent and green jobs, they will need targeted organizational support, access to capital, easier establishment of a legal identity, and training opportunities. Marty Chen of the global WIEGO network for women in the informal economy calls it "voice validity and visibility." I think that's very relevant.
Second, working people themselves must be the agents of change. I would hate for us to wait for either government or the private sector to promote this green-jobs agenda in either rich or poor countries. We have hardly begun to reach out to networks of informal workers, and I think we must do that immediately.
Third, we have to build a good evidence base for quick action that doesn't set up a false dichotomy of tradeoffs between green jobs and decent work and economic growth. This has bedeviled the notion of decent work for years, as though if you promote human rights within work, you are going to slow down economic growth.
To back this up, we are going to need better analytics.
Finally, in terms of a strategy, I think the nascent green jobs movement has to think carefully about how it reaches out, in a number of ways.
DEVIN STEWART: Thank you very much, Heather.
Questions and Answers
QUESTION: Thank you to Kevin for helping to organize this and to all the participants on the panel.
I have a question for Peter. Both Michael and Jill referred to the 10 million, more or less, informal jobs in recycling in China. However, during the Olympic Games, Hu Jintao very specifically stated that the Chinese government now is becoming a recycling economy. I don't if that translates into green jobs. But is there a way for the ILO to measure the impact of the Beijing Olympics and Paralympics on the creation of green jobs?
I will use only the example of Beijing creating in each of the next ten years 50 kilometers of new subway lines. We can't even get the 2nd Avenue subway built in 35 years. It's still under 2nd Avenue and it's waiting to be finished.
PETER POSCHEN: Thank you for the question. The whole area of recycling is one where informality and formality is a huge issue. In many countries—and not only in China—recycling or waste-management jobs have been employment of last resort, and it's the poorest of the poor who do it, under very marginalized conditions.
In a host of countries, we are seeing that governments are trying to address that problem. If you want to move to a circular economy where you can have a closed cycle of material between production and consumption, you basically need a well-performing recycling industry. This scavenging that you have traditionally is simply not doing it. There is a lot of pollution, in fact, in the process. If you Google images on IT waste recycling in China, you see some horrid pictures there—how these jobs are actually quite dirty in the environment where they take place. Recycling is a green idea, but it's a pretty brown and black reality in the communities where much of that still takes place.
I think China is addressing that. They are moving towards much more regulated, much more formalized processes.
In the overview, you see an example quoted from Brazil, where organizing workers in this sector, getting them into cooperatives, associations, whatever organizing framework you want to use, and creating stable and better working conditions for them actually makes the whole thing economically more efficient and it makes it a much more interesting proposition for workers—and for development of the country, by extension.
MICHAEL RENNER: As Peter says, the organizational framework, I think, is really quite critical. On the one hand, as you say, in Brazil, you have some examples of worker cooperatives in the recycling sector that have helped improve the standards and day-to-day realities for the people involved, whereas in much of China, despite the effort so far, I think still the situation is one where much of the recycling happens in very informal, family-run businesses. There is also a very high involvement of migrant workers.
So what you have is a situation where workers come through, work in one of these establishments for a relatively short amount of time, and as soon as they have an opportunity to move on to a better job—a better-paying job or a job that brings with it better working conditions—they will move on. So it is, in essence, very, very hard to change and organize that sector, because it is so transient. You don't deal with a very stable situation and a very stable set of people who are in it. But it's a constantly changing and evolving sector, and that makes it really, really difficult for anybody who is sincere about wanting to improve the situation as well.
JILL KUBIT: I just want to add something quickly. It's also important, when we are talking about waste, the policies about where the waste is coming from and where it's going. For example, in the United States, we are sending a lot of our IT waste across our borders to other places for it to be deconstructed and pulled apart and recycled and reused.
So we are not advocating for ourselves in this example where we have a much stronger waste system, where we have more formal-sector employment, but, instead, we are shipping our goods to other countries that don't have the formal employment. So it becomes the more informal, kind of subsistence workers who are doing this work.
QUESTION: Thank you all.
One of those slippery words that Devin was mentioning came up in several different ways in our conversation today. That's "transitional." In one way we were using it to describe, perhaps, the marginalized workers that might be displaced, and how to handle them. Another is in terms of—for example, installing a solar roof is a one-time event, like a transitional job. As long as there are lots of them to do, that is there, but they are not continuing jobs ad infinitum.
Related to that, apropos of shades of green, it appears that there are also shades of brown, and the old brown is the new green or something. It's getting confusing. For example, the former head of Greenpeace is now touting nuclear energy as a green-jobs creator. If I could have some help in deconstructing that one?
MICHAEL RENNER: I think your points are well taken. One thing we grappled with in the report is to say, how do we deal with this in terms of, for example, efficiency? If you take the transportation sector, is it good enough to increase efficiency of cars as much as the Congress has done in a recent piece of legislation? I forget what the numbers are—I think something like 35 mpg by 2020 or so, from about 27 right now. Clearly it's progress, of a certain kind.
But again, relative to the challenge that we face—we can't just take our time and sort of mosey along, but we have to do this as fast as possible—you could say that achieving that level by 2020 is good, but it's not good enough, particularly if you figure that not only is the number of cars and trucks and buses and so on going to be as it is now, but it's going to continue to grow. It certainly is growing in countries like China and India. It's growing massively.
So there is this need to not just be marginally more efficient, but to really be more efficient to a degree where we can say that it really makes a substantial difference. I think that's where the shades of green come in. Yes, there may be a shade of it, but if it's not enough of a shade, then maybe it's more brown than green, as you say.
QUESTIONER: I guess, in the context of a report on jobs, it's not just progress towards green, but towards jobs.
MICHAEL RENNER: In terms of the decent jobs as well, absolutely. There, too, I don't think we can be content with saying, "Well, there's sort of a marginal improvement." Maybe laborer X gets five cents more a day or there might be a slightly less egregious form of exploitation on the job. Clearly, there, too, there needs to be substantial improvement.
These are not just technical, abstract issues we are talking about. People's lives and human rights and feelings of dignity are tightly bound up with this.
For green jobs and decent jobs to make headway and for people to say, "Yes, I can embrace this; this is meaningful to me," there has to be, I think, very substantive progress. If it's just marginal all the way along, I don't think we will be able to build the kinds of coalitions that at least one or two of the panelists have mentioned.
PETER POSCHEN: We're talking about green jobs making significant progress towards reducing the environmental footprint of economic activity. But you can get around the definitional dilemma of just how green it needs to be by taking the scenarios, for example, of the Intergovernmental Panel on Climate Change. If we have 20 years to reach peak emissions and then we need to decline by 50 percent for the year 2050, that gives you a basis for scenarios. Al Gore uses scenarios in his movie, et cetera. You can look at what needs to happen in individual sectors to get there. You can then see just how much the jobs that you are looking at are contributing to that.
It is, in fact, the way that the European Trade Union movement undertook a study of jobs in a low-carbon Europe. They took scenarios that would make the economies reach the climate protection goals and then looked at what the employment effects of that would be.
You said installing a solar roof is a one-time affair. That is not quite true. You need to compare jobs over the lifecycle, of course, of a product, in the employment intensity. You will compare a situation with much more public transport as opposed to much more individual car-based transportation.
When they did that, they found that there is a net gain in that transition, and it holds up over time, even if the green jobs will be subject to the same improvement and increases in productivity as others have been, as they should be. All things being equal, you would still have a net gain over a lifetime.
Just how green we have to be will ultimately be due to just how ambitious targets need to be that we have to reach.
HEATHER GRADY: I agree with what Peter said. I also think it's difficult to signal, by policy change, what types of employment or farming choices should be made. I'm just thinking of a couple of examples that I have seen in Ghana, where, for example, the government knew that there were more opportunities for biofuels and thought that was also good for the environment and so gave the signal to farmers to plant more palm for palm oil. What was happening then was more clear-cutting of forested areas.
It was very difficult, I think, to take the holistic picture of what direction should be promoted for greening jobs there.
Another example is mining, where some people are promoting artisanal mining; others are against it. People are marshaling different ecological footprint issues for one side or the other.
I think what it really requires at the national level is some kind of inter-ministerial framework that involves a lot of different sources of information. We may know how dire the situation is, but it's very hard to plan which direction to go in.
NORINE KENNEDY: And I guess I would just add again that what seems workable in one national jurisdiction is not going to make a lot of sense, either from an economic or ecosystemic perspective, in another jurisdiction. So it's very hard for us to sit and say, "Well, this is working beautifully in Germany." That's terrific, but is it going to work in China? You have to have a solution that is custom-built for China.
China is a very interesting case. One of my other jobs is to go to the climate change negotiations and sit there for days and weeks and months, listening to the different government delegations presenting what they are doing. It's quite impressive to listen to, not just the developed countries, but also the developing countries—even China, which will inevitably put up something like 85 PowerPoint slides to indicate how they are working on every single front.
But one of the points they always make is that the specific challenge in China is that in many industry sectors they have both the bottom 10 percent performing and they also have the top 10 percent performing. For example, in terms of renewable energy, solar and wind energy, that sector in China is—but then think of all the dirty coal they have there as well.
So I guess we just have to think about what we call in the business, community continual improvement, and look to scale that up, particularly in big economies like China and India.
MICHAEL RENNER: Norine's comment about whether something that works in Germany will work in China made me think—and this is not to oppose your point per se, which I agree with—made me think that there are examples where country A, let's just say—the funny thing is, this actually involves Germany and China—one country moves ahead, has a certain kind of experience with new policies, and others will say, "You know what? This actually works. Maybe we can copy this. Maybe we can take this experience and apply it in our situation as well."
This actually did happen. Germany, in the renewable sector, is a leader, because it has put in place a so-called feed-in law, which basically states that any electricity produced from renewables—from wind, solar, or other sources—has to be fed into the grid by the existing utility companies. It has to be purchased at a guaranteed price that is set by the government. What that has led to, basically, is this incredible stability. If you are an investor in alternative energy, you need the stability of at least several years' worth of saying, not only are we producing the electricity from wind, but we can also sell it. There will be a market. There will be a market with a guaranteed price for a while. So we can actually plan and we can actually get to the point where this industry will mature and truly be able to compete with oil, gas, nuclear, what have you.
That approach has been so successful that China and, actually, many other countries have said, "You know, we should really study this closely, and we should see if we can implement this as well." China has, in fact, gone ahead and implemented a very similar law, in 2005.
JILL KUBIT: Just to add to that, I think that's one of the key points of this report. We tried to find examples of policies that exist in other countries and say, can people actually use this information when they are making their own policy decisions?
Another example that comes to mind that is a great example is also in Germany, and that is the building-retrofit program that Michael talked about. That is where the German government worked together with businesses and with labor to come up with a plan to provide public money that then stimulated private investment to let people retrofit their homes. It wasn't at a cost to people. They got over the cost hump by saying that they were going to put this fund together and people can use that fund.
New York State is trying to do the same thing. They have a plan—I don't know where it is right now, because of the current financial situation—they have a plan to retrofit a million buildings in New York State, out of 7½ million.
So sharing information and getting other cities and other states and other countries to look at what kinds of projects are working I think is one of the values of this project.
DEVIN STEWART: Two quick questions. They may be difficult, but I'll try to keep them short.
In Japan, they went through the experience of going from an economy that relied on imported oil to becoming perhaps the most energy-efficient economy in the world. Japan is probably the most efficient developed economy, rivaling Germany. The way that that happened was, in the 1970s there was the oil shock, and people really felt that oil shock.
A second point is that the bureaucracy came together and came to a consensus that to reduce the vulnerability from imported oil, a national drive to make business more efficient was probably a good strategy, along with diversification of sources of energy.
The third thing is, there was agreement in the private sector that this was a way to become cost-effective, to cut costs.
So there was this, "Okay, we're all together on this. We got it. We're going to go together, becoming one of the most efficient economies in the world." Now it's calculated by input to output.
The first question is, is there the pressure, and is it holistic—I hate that word—is it system-wide to keep the pressure on to make the changes that you are talking about?
Does anybody want to take that question?
The second question is, can you give me a nice story about a city that is leading the way in creating green jobs? I ask this because a friend of mine is starting something he is calling "ecocities," to get cities to speak to one another about great things they are doing. So I would love to hear specific stories you have.
SEAN SWEENEY: I can maybe just take a shot at the sort of political arrangements that are needed. I have noticed in labor circles just in the last year or two there has been a growing movement of clean energy entrepreneurs, labor unions, and public officials around the whole green-jobs agenda. It is expressed in the work of the Apollo Alliance and the Blue Green Alliance. Many, many state legislatures now are working with unions and business around this new agenda.
It is also tied into a nationalistic agenda, the idea of rebuilding America, rebuilding the American middle class, sensing that the United States has fallen behind in terms of developing clean tech and renewables.
So there is a conversation going on, which I think is remarkable, given the fact that in the United States over the last 25 years or so, business and labor have not had a very good relationship at all. So I think there are possibilities for renewal.
My worry is that what we need is a more cooperative multilateral R&D model, based on knowledge being a public good. If someone invents something in one part of the world that's going to help us respond to the climate challenge, then that should be available very quickly in another part of the world. That's called sharing. We are going to need to share and cooperate if we are going to solve this problem.
The problem we have, though, is that people then market it, patent it, and slap intellectual property restrictions on it. I think that's one of the big challenges we have. The technology-transfer issue wasn't dealt with too much in this conversation, but I think it's going to be something we have to deal with in the future.
So in the United States, I do see something coming together with labor, business, and public officials.
PETER POSCHEN: I'll have a shot at both questions.
Concerning the system-wide pressure, I think, yes, it's on. It's perhaps more of a creeping pressure than the oil shock has been. But commodity prices have been rising rapidly and energy prices have been rising rapidly. There are ups and downs. But if the world continues to grow, then those prices will only go one way, which is up.
So there is this systemic pressure on it. If you think of the logic that has applied to Japan, then it applies to almost every country today. To many developing countries, it's a huge problem. In the United States, you have a massive import bill for energy, so it means you are dependent on foreign suppliers for a good. By continuing to buy this product, you are becoming financially dependent. Those who sold you oil yesterday will be your financial supplier tomorrow.
There is a huge shift in the economic balance around the world. That's true for rich countries and it's even more so for developing countries. They are not contributing significant volumes to these transfers, but in their domestic firms it's a huge part of their export revenue. It's a major cost item.
So doing anything you can do to reduce that bill, primarily by looking at energy efficiency and by looking at domestically generated renewables, is a common-sense step forward.
Getting the prices right and getting the pressure even more systemic than it is today is actually what the next climate deal is supposed to be doing. It's supposed to put a price on carbon, a credible price and a price that will move in one direction, which is up.
So I think this pressure will only increase. But, of course, it will depend on a global deal. That will depend on whether we are in the present dilemma or whether we will have a global movement that can accelerate.
On ecocities, I think the report contains a number of places that have made interesting inventions and have contributed in their own ways. You have Curitiba in Brazil that has actually pioneered bus rapid transit. That's a public transport system that is now used around the world. You have Halleburg (phonetic) in Sweden, where they have invented the circular economy within the community. One business will use the waste of another and make it their raw material, and sort of have closed circular local economies. You could take Freiburg in Germany as a city that has invented eco-efficient buildings. They have negative houses, which actually produce energy rather than consume it.
So you have a lot of cities that have contributed, each in its own way, usually with a specialty rather than a bulk menu of these things.
NORINE KENNEDY: There is actually a stakeholder group that is recognized in Agenda 21 and is part of a number of intergovernmental environmental and sustainability processes, including the Climate Change Convention, which is the so-called local authorities. There is an NGO that represents them, called ICLEI. I have used the acronym so long, I no longer know what it stands for. But it represents local governments and has a very engaged constituency on these issues.
In terms of the market forces and market pressures and the price, it can cut both ways, unfortunately. We have seen that here in the United States with the "drill, baby, drill" and certain kinds of energy that were not economically viable at $50 or $60 a barrel, but when you go over $100 or $110 or $120, suddenly we are talking about oil shale and so forth.
So we have to be aware that that cuts both ways. In terms of countries that are very concerned about their energy security—a country like China that has lots and lots and lots of coal or, for that matter, the United States, which has lots and lots of coal—it cuts both ways. So we have to think not just about a global price signal, but we have to think about other arguments and cases that we can make for better choices.
MICHAEL RENNER: I guess the other issue—as Peter says, there is this whole effort now to put a price on carbon. I think that, in its own right, is an enormously complex issue, not just in terms of the mathematics and the mechanics of it, but also, really, the politics of it, on a global level, on a national level, on a local level as well.
The other thing that really strikes me as needing more attention than it probably is getting now is this issue of, do we talk just about making energy more expensive so less of it will be used, as long as we mostly rely on fossil fuels and not so much on renewables? Or are we also thinking about ways to change the economic infrastructure that really locks us into having to use a lot of energy?
Again, look at the transportation sector. Particularly the United States and Canada, as well as Australia, are sort of the worst cases, in a sense. We have now built up a massive system whereby businesses and individuals, families, rely on getting in a car every day or getting in a truck every day. We are transporting people and/or goods over really long distances, for very mundane things.
Changing that system will, I think—maybe I'm being too pessimistic, but I think it will take far more than just pricing carbon. I think we have to really have a far more strategic approach to it. I don't think business alone can be expected to make that kind of change. It is a governmental issue. It is an issue that really concerns everybody.
So I think pricing carbon is important, but it probably doesn't go far enough.
DEVIN STEWART: Thanks, everyone, for a fantastic panel.
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