Louisa Cass l Palladium - Apr 16 2021
Climate Change Action Requires a Focus on Job Creation

When U.S. President Joe Biden convenes 40 world leaders for the Leaders' Summit on Climate Change on April 22 – Earth Day – a key focus will be on the economic benefits of and opportunities for good-paying jobs that climate change action offers communities and workers around the world.

Over the last 30 years, even as the science has become increasingly recognised as consensus-based and accepted, a critical barrier to action addressing the climate crisis has been that the consequences for economies, carbon-intensive industries and the people they employ have often been cast as slowing economic growth and threatening jobs.

These fears have been felt by governments across the world, particularly in electorates dependent on fossil fuel or energy-intensive production such as the Bowen Basin in Australia, Aberdeen in the U.K., or Pennsylvania in the U.S. In many of these regions, voters have voiced their concerns that they would be left jobless or in communities made less prosperous and vibrant by the exit of their main source of economic activity.

These concerns have led to compromises and in some instances, stalled government commitments and polarised communities on urban and rural divides.

Under President Donald Trump, the U.S. became the first country to withdraw from the Paris Agreement "because of the unfair economic burden imposed on American workers, businesses, and taxpayers by U.S. pledges made under the Agreement". The 2017 decision took effect in November 2020 and was immediately overturned by President Biden when he took office, with a commitment to harness opportunities for "well-paying union jobs".

In Australia, climate politics have been prominent in recent election cycles. Now, the government is showing signs it will take more ambitious action to reduce carbon emissions that Prime Minister Scott Morrison assures will still preserve "the jobs and livelihoods of communities right across the country, especially in regional Australia."

Creating the Jobs of the Future

These political decisions are part of a growing momentum towards achieving net-zero emissions by governments and the private sector worldwide. They demonstrate the importance of actively engaging with the tensions and opportunities inherent in the transition to a new clean energy economy to ensure all communities and workers benefit both in the short and long-term.

Achieving this will require a concerted, collective effort, stimulating new economic activity with jobs and innovation that directly contributes to decarbonising the global economy. At the same time, there is a need to mitigate the impacts of industries causing climate change by supporting workforces to adapt existing skills or develop new ones demanded by emerging and future industries.

The most pronounced impact will be in the coal mining and energy sectors, as those within the sector move from fossil-fuel dependence to renewable energy. As outlined in Just Transition: Implications for the corporate sector and financial institutions in Australia, prepared by the Institute for Sustainable Futures for the Global Compact Network Australia and National Australia Bank, these processes must be planned.

"If the transition (to net-zero carbon economies) is undertaken poorly without the creation of alternative industries and labour redeployment, there will not only be 'stranded assets' – but also 'stranded workers' and 'stranded communities' with high unemployment," states the report.

For example, in the hydrogen industry in Australia, recent analysis of the job roles, skills, qualifications, and experience required for the emerging field found that many of the skills are transferrable from the gas sector, manufacturing or project management. Other roles are new, such as technicians required to build and maintain fuel cells for hydrogen storage. The essential skills range from entry-level trades to advanced qualifications and experience, particularly in science, technology, engineering and mathematics (including research and development), operations, and management.

Meanwhile, evolving technologies mean that roles and skills will also develop in tandem.

Critically, the right skills will be needed at the right time to attract investment and stimulate development.

But achieving this at scale will require a combination of targeted, demand-driven short courses and on-the-job training for apprentices and tradespeople to meet short-term needs. There will also be a need for longer-term investments in training, vocational and higher education pathways for systemic repositioning of the workforce to meet emergent and future needs. Universities have a doubly important role in providing skills and knowledge and developing new technologies while promoting public dialogue.

Managing the Challenges of Transition

The task is not easy. As with the mining sector, the peak demand for renewable energy jobs often comes during the construction phase, after which fewer roles are required for operating and maintaining infrastructure. Along with these challenges, communities in regions deemed as high potential for renewable energy industries may not have the skills required and, in some instances, are affected by intergenerational unemployment and underemployment.

These projects can stimulate fly-in, fly-out workforces or dependencies on imported supplies, which can reduce the economic benefit for local communities, including pressures on housing markets due to higher incomes of mobile workers. Lessons need to be learned from the mining and energy sectors. Prioritising local workers or those who are prepared to live in local or nearby regional centres is therefore critical, as well as promoting procurement practices that support local businesses and supply chains. Support and incentives must also be provided to workers ready to move to find jobs.

"The right skills will be needed at the right time to attract investment and stimulate development."

Progress will occur to differing extents across all sectors as they decarbonise and build resilience to climate change, including infrastructure, manufacturing, transport, agriculture and food production.

Even promising approaches such as nature-based solutions require fundamental shifts in productive capacity and for many, a shift in their identity. Where once a farming family may have worked their land for cropping or livestock production, a move to sequestering carbon, for example, means they will now focus on protecting it – requiring different roles and ways of life.

Therefore, it is crucial that climate change action is underpinned by equitable, inclusive opportunity and informed by social and cultural considerations as much as by political and economic issues.

Change Requires Longer-Term, Collective Solutions

Such change requires place-based, localised solutions, where businesses, governments, workers, consumers, community groups and members come together to create a shared vision of the future, well in advance of the change taking effect. Planning also needs to take account of the demographics of different workforces.

For example, in Canada, a Task Force on Just Transition for Coal Power Workers and Communities consulted extensively with workers, communities, business and unions in provinces affected by the phase-out of coal-fired electricity generation. The Task Force's advice to the government resulted in public-private initiatives ranging from re-training schemes and worker transition centres to assist coal miners looking for employment to pension schemes for older workers, infrastructure, and community investment.

Critical to these processes' successes were long lead times for closures, advance planning, community engagement to develop a social compact, joint public and private funding for action, and economic diversification. This echoes experience globally of what has worked and, in their absence, what hasn't.

These approaches are already informing initiatives, such as the European Commission's 150 billion Euro Just Transition Fund in public and private finance. The Fund will focus on the economic diversification of regions in the European Union most affected by the climate transition and on reskilling and active inclusion of their workers and jobseekers.

As social scientist Rebecca Huntley writes in her book, How to talk about climate change in a way that makes a difference, policy-makers and businesses must always remember that people are the solution. Only by engaging with the rational and emotional, shifting the dialogue to "three parts hope for every one part fear," will we see widespread individual, community, and country-level change.

Louisa Cass leads Palladium's climate change work in the Asia-Pacific region, which is focused on integrating climate change resilience across sectors such as agriculture, health and infrastructure and on supporting the transition to a low carbon future. For more information, contact info@thepalladiumgroup.com.