For a new… climate economy!

Job creation, green growth, social inclusion: the latest models highlight the advantages of a carbon-neutral economy. The benefits of a successful ecological and energy transition may be greater than expected.

"Change the model, not the climate" could be the slogan calling for us to commit our economy to decarbonization. In this regard, the Paris Agreement sets a target of achieving carbon neutrality within 30 years. However, the pace of transformation is not fast enough. This is highlighted in the latest report from the Global Commission on Energy and Climate. Its experts estimate the benefits of a change of model at $26 trillion and 65 million jobs in the global economy[1]. Among the recommended public policies: the elimination of fossil fuel subsidies or even an effective carbon pricing of between $40 and $80 per ton[2]. The report also advocates an acceleration of investments in sustainable infrastructure, particularly in renewable energies. In Europe, the sector already creates jobs that cannot be relocated and support the economies of territories and regions. It is therefore at this scale that interesting prospective work is being carried out.

Green Growth of the Territories

In France, ADEME[3] is conducting studies to measure the economic effects of the energy transition. At the level of the Hauts-de-France and Occitanie regions, economic models based on different scenarios highlight the sectoral and macroeconomic gains. Thus, in Hauts-de-France, the number of jobs[4]linked to the development of renewable energies would double within 10 years and quadruple within 30 years[5]. The Occitanie region, as part of a "Positive Energy Region" (RéPOS) objective, would also experience positive macroeconomic effects. GDP could increase by 2% within ten years and 3.9% within 30 years, with 90,000 additional jobs, and a 56% reduction in household energy bills[6]. Ultimately, these policies would be largely positive from an ecological, economic, and social perspective.

More virtuous mobility

To illustrate the gains from implementing proactive policies, the European Climate Foundation has just published a report on the socio-economic impact of decarbonizing heavy goods vehicles[7]. Based on scenarios for the introduction of "zero-emission" heavy goods vehicles (hydrogen, biogas, electric), the transition shows "significant reductions in CO2 emissions, cost reductions for hauliers, and net gains in added value and employment for the European economy," the authors of the report state. Thus, more than 120,000 jobs could be created by 2030, while economic growth would be stimulated by 0.24% within 30 years. Of course, this scenario would avoid an increase in our greenhouse gas (GHG) emissions estimated at 14% within twenty years, with the consequences we know for the climate disruption already underway. This is why the European Commission aims to reduce GHG emissions in road transport by 60% within 30 years, with specific standards for heavy goods vehicles. [8].

Supporting the losers

However, implementing a successful ecological and energy transition requires measures for those who will be its "victims." While the impact of a sustained energy transition is generally positive in terms of employment, for example, some sectors of economic activity will see job losses. The consequences of proactive public policies can condemn certain sectors, or even weaken them. The planned closure of coal-fired power plants can be one illustration, the increase in the carbon tax and its impact on sectors heavily dependent on fossil fuels, another. As a result, transformations will occur and the management of "creative destruction" will be necessary. Supporting the regions, businesses, and individuals who will find themselves on the "losers" side of the energy transition means already thinking about the reconversion of the jobs concerned towards developing sectors.

Cyrille Arnoux, web editorial manager

[1] Unlocking the inclusive growth story of the 21st century: accelerating climate action in urgent times, The Global Commission on the Economy and Climate, August 2018.

[2] In April 2018, the price per ton was €13.82 in Europe. Source: Carbon Tracker think tank.

[3] French Environment and Energy Management Agency.

[4] Direct, indirect, and/or induced jobs (those created in the rest of the economy both by spending by employees in green economy sectors and by energy savings brought about by climate-energy policy for households and businesses).

[5] From 7,000 jobs in 2015 to 31,000 jobs in 2050. Source: ADEME&VOUS La lettre stratégie, No. 56, September 2018.

[6] Source ADEME&VOUS La lettre stratégie, N°56, September 2018.

[7] Trucking into a Greener Future, European Climate Foundation, September 2018.

[8] Proposal for a Regulation of the European Parliament and of the Council setting CO2 emission performance standards for new heavy-duty vehicles, European Commission, May 2018