Net zero was never going to be an easy win for workers

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Politicians have insisted for years that the path to net zero emissions is paved by jobs. “When I think about climate, I think about jobs,” US President Joe Biden likes to say. Mind you, this isn’t just any job, but good jobs that revitalize poor communities. British Labor opposition leader Sir Keir Starmer recently joined the bandwagon, saying a green transition could “bring back hope to communities that were torn apart by deindustrialization in the 1980s”.

I’ve been wary of this glossy narrative for some time, not because I thought it was impossible, but because I thought it would be difficult and involve trade-offs that policymakers are reluctant to talk about. In recent weeks, this reality has become increasingly difficult to ignore.

Why is a “win-win” for workers and the planet so difficult to achieve? At least on paper, the challenge doesn’t look too daunting.according to calculate The International Monetary Fund proposed last year that the green transition should involve “redistributing” only 1% of jobs in developed economies and 2.5% of jobs in emerging markets over the next decade. The IMF notes that this is much smaller than the shift from manufacturing to services since the 1980s, which has occurred at 4% per decade. On top of that, the average salary for a “green” job is nearly 7% higher than the average salary for a “brown” job, which, all else being equal, should encourage people to switch and allow them to switch when they do. life becomes better.

But in the real world, people certainly don’t “reassign” as easily as they swap from one row to the next on an economist’s spreadsheet. First, there’s the issue of geography: OECD research, at least so far, shows that green jobs are disproportionately found in capital regions, while brown jobs are disproportionately found in areas with lower GDP per capita. Then there’s the issue of retraining: the OECD found that only 12% of people in brown jobs participated in lifelong learning or training, compared with 19% of people in “neutral” and green jobs.

Delve deeper into the industries at the forefront of transformation, and the challenges become clearer. From energy to cars to steel, new green production processes are often less labor-intensive, which is good for consumers because it ultimately means lower prices, but less so for workers.

In the UK this month, a decarbonisation deal struck at the country’s largest steelworks in Port Talbot, Wales, shows how easily the green jobs narrative can sour. The British government has agreed to pay Tata Group up to 500 million pounds in subsidies to secure the future of the factory, replacing the blast furnace with an electric arc furnace, which requires less labor and will result in the loss of 3,000 jobs. Unions said they had been excluded from discussions and wanted a different plan involving hydrogen that they said could preserve jobs while expanding production, albeit at higher prices and a slower timetable. The government said this was unrealistic and pointed out that the deal had already secured 5,000 other jobs.

Regardless, the line of attack is obvious and Labor is not afraid to use it. “Only the Conservatives can spend £500m of taxpayers’ money to make thousands of British workers redundant,” quipped shadow business secretary Jonathan Reynolds. The government has pledged to invest £100m in rebuilding and retraining to “ensure the transition is as appropriate as possible”, but communities like Port Talbot have heard promises like this before. Alun Davies, national officer for steel at the Community Alliance, said steel jobs in this community pay around £36,000 to £38,000, while most other jobs don’t pay much more than the minimum wage. “The reported 3,000 job losses will increase to about 11,000 due to the impact on downstream businesses, contractors and local shops. . . . What are they going to do? Build another industrial zone there and fill it with minimum wage jobs?”

In the United States, the Biden administration is thinking more seriously about how to make the transition work for communities, such as by providing Additional rewards Invest in clean energy companies in former coal regions. But even so, there are concerns it won’t be enough. Meanwhile, new electric vehicle plants are clustering in southern states with lower labor standards and union rates, much to the dismay of unions.

In countries such as Germany, more innovative ideas are being discussed. IG Metall, the country’s largest union, plans to bargain over a four-day work week for steelworkers in November to cope with future demands from a reduced workforce. Thorben Albrecht, policy director at IG Metall, said: “Overall, we remain quite optimistic that the green transition is something that is necessary and can be managed if workers’ interests are taken into account.” The key, he said, was not to pretend that there would be no difficulties ahead. decisions, but rather ensuring employees have a seat at the table when decisions are made.

The worst thing you can do is to remove workers from the conversation and then call them climate change skeptics, populists, or, more insultingly, that when they object, they are “goaded” by populists. “A lot of people are turning their backs on the green transition now,” Davies told me after the Port Talbot deal. “Some people say, ‘You know what? I like my job better.'”

sarah.oconnor@ft.com

Sarah O’Connor is taking a book break and will return in April 2024