Green jobs in Europe and its application on labor market Case of Green jobs in Denmark

Green jobs in Europe and its application on labor market Case of Green jobs in Denmark Loay Sherine Dissertation for Master of economy and human resources management Supervised by: Prof. Pilar González July 2015 2 Acknowledgment After completed another important stage of my academic career, it is my duty to thank all those who directly or indirectly supported me in this work that would not have been possible without their help. I am deeply indebted to my supervisor Prof. Pilar González whose stimulating motivation, valuable idea and guidance, her enthusiasm and faith in me throughout have been extremely helpful and let me able me to accomplish this work. And I am also grateful for Prof. Teresa Proença the director of the course for her effort with me in the first year and her help in surpassing language barrier. I would like to thanks my father Dr. Sherine and my mother Ms. Nahwat for making me who I am today, for the love and strength that always they give to me and also my brother Yamen and my sister Darine for their continuous support. Finally, I would like to thanks my friend how supported me during the master period in Portugal specially Nabil and Mohsen 3 Biographical information Loay Mohamed Sherine Zakaria was born in Alexandria, Egypt on May 17, 1991. He graduated in 2013 from faculty of commerce, business administration department, Alexandria University Due to the coordination of Alexandria University with university of Poitiers in France, (IAE Poitiers) that let him able to have a double degree. In the benefit of this coordination, he got his diploma in management form university of Poitiers, after two year he gets the bachelor degree from university of Poitiers in management. In 2013 he was awarded the Erasmus Mundus scholarship to study my research master in economics and human resources management at university of Porto. 4 Abstract Throughout last decades the green economy is developing in an up warding slope, several transformations have occurred on labor market. This dissertation focus on the incidence of the application of green jobs in labor market and how a transition to a greener labor force can occur in a effective way in an European context. The study reviews the green jobs literature and analyzes its different assumptions such as the green jobs development and needed skills. The aim of this study is to understand how green jobs can be applied in a labor market, how the transition of labor force is done and what is the impact of the development of green industries on the labor market. A case study is conducted on Denmark as a successful experience in green jobs development. A review for the progress and the circumstances of applying the green jobs in the country is conducted, after analysing the outcomes it was obvious that the vocational training and technical education play a principal role in a successful transition to a greener labor market, in plus there is a necessity to a collaboration between authorities and labor unions in order to attain a comprehensible transformation without negative influences on labor market. Key-words: Green jobs, green economy, Denmark, skills, labor market. 5 Resumo: Nas últimas décadas a economia verde (green economy) tem tido um importante e significativo desenvolvimento desencadeando várias transformações no mercado de trabalho. A presente dissertação centra-se na incidência dos empregos verdes (green jobs) no mercado de trabalho europeu e nas condições necessárias para que a transição para uma força de trabalho mais verde possa ocorrer de forma eficiente. É feita uma revisão da literatura sobre os empregos verdes e são analisadas diferentes hipóteses aí avançadas nomeadamente no que respeita às competências necessárias ao desenvolvimento deste tipo de empregos. O principal objetivo deste estudo é o de compreender os impactos do desenvolvimento de empregos verdes no mercado de trabalho e, em particular, o de analisar os efeitos potenciais sobre o mercado de trabalho do processo de transição para uma economia mais verde. Faz-se também um estudo de caso sobre a Dinamarca considerada como uma experiência bem-sucedida de desenvolvimento de empregos verdes. É feita uma análise das condições específicas existentes e do modelo concreto implementado neste país. A análise dos resultados mostra que a formação profissional e o ensino técnico desempenharam um papel decisivo para o sucesso da transição do país para um mercado de trabalho mais verde. Ficou ainda claro que uma transformação eficaz (portanto que minimiza os potenciais efeitos negativos existentes) do mercado de trabalho no sentido de o tornar mais verde necessita de formas de colaboração estreita entre as autoridades públicas e locais e os sindicatos. Palavras-chave: empregos verdes, economia verde, Dinamarca, competências, mercado de trabalho. 6 Table of Contents TABLE&OF&CONTENTS&.....................................................................................................................&6! TABLE&OF&FIGURES&..........................................................................................................................&7! 1.!INTRODUCTION:&......................................................................................................................&8! GREEN!ECONOMY!...............................................................................................................................................!8! GREEN!JOBS!......................................................................................................................................................!10! DIFFERENT!DEFINITIONS!OF!GREEN!JOBS:!JUST!A!DIFFERENCE!OF!SCOPE!OR!REALLY!DIFFERENT! CONCEPTS?!........................................................................................................................................................!12! Are$green$jobs$decent$ones?$..................................................................................................................$13! 2.!THE&DEBATES&ON&GREEN&JOBS&IN&THE&ECONOMIC&LITERATURE&........................&17! BENEFITS!OF!ADOPTION!OF!A!GREEN!STRATEGY!FOR!A!BUSINESS!..........................................................!17! Benefits$...........................................................................................................................................................$17! Costs$.................................................................................................................................................................$19! 3.!GREEN&JOBS&IN&EUROPE:&WHERE&AND&HOW&MANY?&................................................&21! THE!VOLUME!OF!GREEN!JOBS!WITHIN!THE!EUROPEAN!UNION!..............................................................!21! Job$potential$in$renewable$energy$by$2020,$2030$and$2050$..................................................$22! STATISTICAL!EVIDENCE!ON!GREEN!JOBS!IN!EU!WITHIN!THE!LITERATURE!...........................................!23! GREEN!JOBS!AND!QUALITY!OF!JOBS:!DO!GREEN!JOBS!HAVE!MORE!QUALITY!THAN!OTHER!JOBS!AND! DO!THEY!EMPLOY!MORE!QUALIFIED!WORKERS?!........................................................................................!25! Skills$and$green$jobs$.................................................................................................................................$25! 4.!GREEN&JOB&APPLICATION:&THE&CASE&OF&DENMARK&.................................................&27! BRIEF!PRESENTATION!OF!THE!DANISH!LABOR!MARKET!..........................................................................!28! GREEN!GROWTH!IN!DENMARK!.....................................................................................................................!28! GREEN!JOBS!IN!DENMARK!..............................................................................................................................!31! SKILLS!IN!DENMARK!.......................................................................................................................................!33! NEW!AND!CHANGING!SKILLS!NEEDS!.............................................................................................................!35! Emerging$green$collar$occupation$.....................................................................................................$36! Skills$needed$to$greening$existing$jobs$.............................................................................................$38! POTENTIAL!OF!GREEN!GROWTH!JOB!CREATION!.........................................................................................!40! 5.&POSSIBILITY&OF&APPLICATION&OF&THE&DANISH&EXPERIENCE&IN&OTHER& EUROPEAN&COUNTRIES&EUROPEAN&COUNTRIES&...............................................................&43! 5.!CONCLUSION&..........................................................................................................................&45! REFERENCES&...................................................................................................................................&47! 6.!ANNEX&......................................................................................................................................&52! FIGURE!1:!ADDED!VALUE!PER!FULLETIME!EMPLOYEE!FROM!GREEN!PRODUCTION!IN!DENMARK.!...!52! TABLE!1:!SKILLS!PROFILE!OF!GREEN/GREENING!OCCUPATIONS:!ILLUSTRATIVE!EXAMPLES!(OECD! COUNTRIES)!......................................................................................................................................................!52! TABLE!2:!DENMARK’S!GREEN!GROWTH!INDICATORS!...............................................................................!53! TABLE!3:!...........................................................................................................................................................!54! DISTRIBUTION!OF!EMPLOYMENT!BY!GREEN!SECTOR!IN!EUROPE!2010!(EUROBSERV,!2011)!........!54! TABLE!4:!...........................................................................................................................................................!55! PREDICTED!CHANGES!IN!EMPLOYMENT!VOLUMES!–!MEDIUME!AND!LOWESKILLED!OCCUPATIONS!IN! EUROPE!.............................................................................................................................................................!55! 7 Table of Figures Figure 1: Green jobs as ILO………………………………………….…....11 Figure 2: The possible combination between green and decent j………....14 Figure 3: Gross employment in renewable energy sector………………....23 Figure 4: water collection, sewerage and recycling only as a percentage of employment………………………………………………………………...24 Figure 5: Employment in the green jobs sector as a percentage of share of total employment in every country 2011……………………………………..….25 Figure 6: skills shortage in different occupation and countries ……….…..26 Figure 7: Green job demand by country as % of total demand………….....27 Figure 8: Danish energy policy milestone up to 2050………………….…..30 Figure 9: the percentage of Green Growth companies in Denmark………..41 8 Introduction: The green jobs are developing in an up warding slope, several transformations and changes have occurred on labor market. This dissertation focus on the application of green jobs in labor market and how a transition to a greener labor force can occur in a effective way in an European context. The aim of this study is to understand how green jobs can be applied in a labor market, how the transition of labor force is done and what is the impact of the development of green industries on the labor market. Green economy Green economy has arisen as a new branch of the economic science developing during the last years. Hence, it is known as the branch in the economic science recognized during the last twenty years according to which the economy is a contingent element of natural environment wherever it exists as a part thereof. The concept of the green economy involves ideas of many other branches of economic science like ecological economy, the environmental economy, theory of international relations and many others. However, the most voluminous, brief and accurate definition is probably the one conducted by the UNEP that claims that green economy aims to improve human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. (Sukhdev, Stone, & Nuttall, 2010). In a green economy, growth in income and employment are driven by public and private investments that diminish carbon emissions and pollution, expand energy and resource efficiency, and avoid the loss of biodiversity and ecosystem services The major objective for a transition to a green economy is to support economic growth and investment while increasing environmental quality and social inclusiveness (UNEP, 2011). Sustainable development is not replaced by the concept green economy, but there is a rising recognition that attaining sustainability rests almost entirely on getting the economy in a right approach. Decades of creating new wealth within a “brown economy” based on fossil fuels have not substantially addressed social marginalisation, environmental distortion and resource diminution. Sustainable development is easily translatable into economic terms: an increase in 9 well-being nowadays should not result in decreasing well-being tomorrow. Future generations should be allowed to at least the same level of economic opportunities and thus at least the equivalent level of economic welfare as is available to current generations. To make the conversion to a green economy, specific empowering conditions will be vital. These empowering conditions consist of national regulations, policies, subsidies and incentives, as well as international market and legal infrastructure, trade and technical assistance (UNEP, 2011).Therefore a need for green labor market is that can assist in greening the economy and interpret with the new changes and variables. Greening the economy is the most important faze in the transition to a green labor market, and that change is mainly driven by the long term trends towards the sacristy of resources and primary materials costs. In order to confronting these challenges governments have endorsed different policies that will be discussed later, in order to shift towards more efficient and available resources, that normally will imply a change in the labor market. This differs throw the additional conclusions reached by Cambridge Econometrics and Warwick Institute for Employment Studies (Cambridge Econometrics, 2011), which conclude that the potential for green jobs lies primarily with high and lowskilled jobs only and argues that the most important skills necessary for green jobs are those that are technological and would favor a focus as preparation for the changing labor market. These would be linked mostly to highly skilled and to an extent, to medium skilled jobs. This will be discussed in the part concerning the skills. As to the productivity perspective a study (Jackson & Victor, 2011) focused on the transition to a sustainable society poses to considerable challenges for conventional economics. Institutional structures, accounting frameworks and macro-economic relationships all require significant reform. According to these authors Central to a new macro-economics for sustainability rely on the relationship between growth, productivity. In particular, a low-growth or slow-growth economy must reconcile labor productivity changes with the maintenance of full employments. This study highlights the ‘productivity trap’ that arises from the systematic pursuit of labor productivity and suggests two solutions of this trap. The first is to reduce working 16 A report issued 2013 by ILO focuses on the links between the environmental and the social dimensions of sustainable development, including their economic implications. It summarizes the growing body of evidence that the shift to a more environmentally sustainable economy is not only indispensable, including from a labour market perspective, but can in fact lead to net gains in employment, significant improvements in job quality and incomes, and advances in equity and social inclusion on a large scale.(International Labour, 2013) These benefits are not recognized automatically, but contingent on the right policies. Similarly, appropriate and coherent policies are needed to mitigate the challenges environmental sustainability poses for the world of work. The ILO concludes that the process of structural change towards more sustainable patterns of production and consumption into a global transition to decent work for all (International Labour, 2013). Diverse reports from the OECD and ILO have shown that there is some green jobs criteria and indicators for defining how green a job could includes references to the industry, the production method, the value-chain position and the awareness of the organization, the occupational profile, quality and greenness of workload (MartinezFernandez, Hinojosa, & Miranda, 2010) Despite, all these diversities in concepts and criteria the common used definition by researcher is the ILO one, by that reason I will rely on this definition along this dissertation, in order to achieve a standardization of concepts and information. 17 2. The debates on green jobs in the economic literature Benefits of adoption of a green strategy for a business The conservative understanding concerning green economic and environmental protection is that it comes at an extra cost imposed on firms, which may influence their global competitiveness. Companies are facing growing pressure to become cleaner and greener, various stakeholders push enterprises to diminish their destructive impact on the environment. This is now seen as firm’s social responsibility, that business people often refer to as “corporate social responsibility”(May, Cheney, & Roper, 2007). Still enterprises can reduce their environmental influences without affecting their economic performance by applying diverse innovation strategies. Such an approach should include strategies that might result in increased benefits or decreased costs, it is important to look at both sides of the balance sheet Benefits Better access to certain markets First, reducing pollution and other healthy environmental influences may improve the whole image or the fame of a company, and therefore increase customer’s loyalty or support sales efforts. Although this argument seems pretty honest, consumers may be aware of a company’s environmental performance through its offer of green products, but they are less likely to be familiar with its environmental performance as measured by its emissions to water or the atmosphere. So companies need to focus on the green products. In the same way the eco products must have a competitive prices. Second, and more specifically, purchasing policies of public and private organizations may stimulate green producers. It is becoming increasingly common for public administrations to include environmental performance as a criteria for selecting suppliers of goods or services. This phenomenon is known as green public purchasing (GPP). As an illustration (Kunzik, 2003) reported that, in general, the central U.K. government, in its Greening of Government Operations Policy, aims to the following: • Encourage manufacturers, suppliers, and contractors through specifications to develop environmentally preferable goods and services at competitive prices. 18 (Positive Links Between Environmental and Economic Performance). • Ensure that any products derived from wildlife, such as timber, plants, and leather goods, are from sustainable sources. • U.K. Department of Environment, Transport, and Regions has a restriction to buy a minimum of 10% of electricity from renewable sources in order to enhance the renewable sources production. In addition, private businesses have also taken steps to greening their supply chains. Apparently, all plants with ISO 1certification are aware of their supplier’s environmental performance as this is one of the criteria to be fulfilled to obtain the certification (Barla, 2007). Knowing that most of public and private administrations are now involved in GPP2, it seems that firms selling to governments or other businesses can have a better access to certain markets by enhancing their environmental performance. Differentiating Products Greener products or services can allow businesses to use a differentiation strategy so as to exploit niches in environmentally aware market segments and ecolabeling can present information about the environmental features of a product or service. The attractiveness of ecolabeling is increasing, especially in Europe. In particular, sales of products with the European ecolabel went from €51 million in 2000 to €644 million in 2004. Customer’s ability to purchase green product in general is important, despite the fact that the real amount committed to such buys may be less impressive. For example, 80% of French adults say they prefer to purchase ecoproducts, while 20% say they actually make such purchases regularly (Guilloux, 2006) 1 International Organization for Standardization 2 Green Public Procurement 19 Costs Cost of Material, Energy, and Services (Porter & Van der Linde, 1995) has stated that pollution is usually associated with a waste of resources, raw materials not being completely used, or waste of energy. “Pollution is a manifestation of economic waste and involves unnecessary or incomplete utilization of resources” Also decreasing pollution is often corresponds to increasing productivity of used resources. From this perceptive Porter suggested that more severe and flexible environmental regulations, such as taxes and tradable permits, would be profitable for the economy, motivating innovations that can offset the cost of complying with these policies. This is known as the Porter hypothesis (PH). Specially, this line of reasoning indicates that reducing pollution can cause a reduction of expenditures on raw material or energy. Cost of Capital Also an improved environmental performance can be related with a lower cost of economic capital. First, it is becoming quite clear that greener companies have an easier access to capital markets by the augmentation of the green mutual funds that is available now in most of the countries. Through these funds, green investors can be ensured that their money will be invested in firms that meet certain criteria. Secondly companies with improved environmental performance can benefits when they borrow from banks. Most banks have now team of specialists to evaluate the environmental performance of possible borrowers, more specifically to determine the size of potential liabilities related to polluted assets. Thirdly, information on the environmental performance of firms in general may influence shareholders and their reactions can be noticeable on the stock market. These fluctuations will affect the cost of capital. (Stefan & Paul, 2008) 20 Cost of Labor A better image of the firm results in a better ambiance in the workplace and enhances higher productivity. Employee who feels proud of the firm for which they work can accomplish better objectives and tasks, but also enhance generosity and lead to a worthy circle of good reputation. This is especially significant in recruiting talented junior scientists, managers, and highly qualified candidates, many of whom basically would not work for a company with a low social and environmental profile. No one chooses to work for a untrustworthy company as compared to an alternative with a good trustworthy profile. Improved environmental performance could then decrease the cost of labor by reducing the cost of illnesses, absenteeism, recruitment, and turnover. Some companies are aiming to an improved environmental performance to improve the satisfaction of their labor unions (Lankoski, 2006). 21 3. Green jobs in Europe: where and how many? The Volume of green jobs within the European Union According to the existing data, there are approximately 7,360,000 jobs in the EU 2013 in different green sectors (renewable energies, energy efficiency, organic agriculture, waste management, etc..). The available data is presented below in table1. In the EU27 more than 1,114,000 people are employed in the renewable energy sector. The ecoindustries offer between 2.9-3.6 million jobs. The European insulation industry only represented 232,050 full time jobs in 2010 in house retrofitting jobs. The employment related with recycling sector and waste management touched 2 million jobs and there are 200,000 producers associated with organic farming.(Gil et al., 2013). From a different perspective the attractive sectors are renewable energies, waste management and recycling and sustainable transportation are the sectors were most of the jobs have been created. Countries with high importance of jobs are Germany, Denmark, France, Spain and Italy. Table 1: Green jobs sector and volume in EU: Source :(Gil, Lopez, & Murillo, 2013) 22 According to (EurObserv’ER, 2012) the overall employment impact of investment of every €1 billion per year in renewable energy sector is 52,700 jobs, the highest percentage among the green sectors. The European Union is the world leadear in clean energy investments, spending nearly $81 billion in 2010. Since 2009, China invested $54.4 billion in clean energy technologies in 2010 comparing to the United States’ $34 billion. Over 85 percent of today’s market for clean energy technologies is principally located in Asia and Europe In a worldwide perspective, Germany’s clean energy investments of $41.2 billion came second in 2010, (after China), exceeding the United States, which actually ranks third Renewable energy sectors employed more than 1,114,000 people in the 27 European Union Member States in 2010. This present a 25% increase on the 2009. And there are expectation that this might rise exponentially, if the target will be reached of 100% renewable energy by 2050. In this case employment in the renewable energy sector would bring 6.1 million people into labor market.(Gil et al., 2013) Job potential in renewable energy by 2020, 2030 and 2050 There are several reports available a on job creation potential of a more ambitious transition towards renewable energy production. A good example is the “A 100% Renewable Energy Vision for the European Union” report, the European Renewable Energy Council proposed a strategy to achieve 100% renewable in the energy sector. Considering that the target of 45% renewable energy in final energy consumption in 2030 is met, this would offer gross employment of about 4.4 million in the renewable energy sector an annual average growth rate of about 6% by 2020 (2.7 million employees) (Zervos et al., 2010). If a target of 100% renewable energy by 2050 was to be followed, employment in the renewable energy sector would then bring 6.1 million people into work. This comprises an average annual increase of gross employment in these activities of 36% and 30% respectively as compared to 2009. 23 Figure 3: Statistical evidence on green jobs in EU within the literature Eco-industries include a diverse set of sectors in the fields of environmental protection (waste management and resource management renewable energy, renewable raw materials and products). About 2.7 million people worked in the EU27 eco-industry in 2008, which represented 1.22% of overall employment (people aged 15 - 64). In 2012, the total number of people employed in eco-industries is projected to be around 3.4 million.(ECORYS, 2012) However, there is lack a systematic gathering of data on the development of ecoindustries in the EU. Eurostat provides a database on the Environmental Goods and Services Sector (EGSS)! In 2011, water collection and treatment, sewerage and recycling only employed around 1.6 million workers in the EU, which made up 0.77% of total employment (15-64). The effect of these sectors on total employment remarkably varies across EU countries. As shown in the figure 4 , it varies from less than 0.5% (in Cyprus, Denmark, Netherlands, Finland and Sweden) to over 1% in Slovenia, Slovakia, Hungary and Bulgaria. Source : (Zervos, Lins, & Muth, 2010) 24 Figure 4: Water collection, treatment, sewerage and recycling only, in 2011 Still the green economy sector represents one of the fastest growing sectors in Europe. Between 2005-2009, it contributed to the creation of more than 300,000 jobs. According to the European Observatory of Renewable Energy, in 2010 about 1.1 million workers are employed in green activities in the EU27 (0.5% of total employment). Solid biomass, photovoltaic, and wind powers had higher numbers of employees across the EU as stated before. However, significant diversities were observable among the member of EU states. Germany, France, Italy, and Spain exhibited the highest number of employees in 2011, even though Finland, Denmark, Sweden recorded the highest shares on total employment (between 1.2 and 2%). Contrariwise, other countries such as the UK, Malta, Poland, Bulgaria, Romania, and Ireland witnessed the lowest employment incidence of this sector (below 0.2%) that can be seen in this figure. Source: EurObserv’ER barometer 2011 25 This figure 5: Employment in the green jobs sector as % of share of total employment in every country 2011 Source : EurObserv’ER barometer 2011 Green jobs and quality of jobs: do green jobs have more quality than other jobs and do they employ more qualified workers? Skills and green jobs Reviewing the skills required for green jobs, it becomes obvious that green jobs have a significant positive relationship between green jobs and new skills. Essentially, skills that controlled for country and season, technical skills, resource management skills and composite problem-solving skills turn out to be highly significant for green jobs (Dierdorff et al., 2009). That verifies previous studies that found that mainly technical skills were needed in order to develop green jobs. Green transformation creates demand for new skills as current producers change activities to new markets and products. The most obvious examples are in the automotive sector and in ship manufacturing, reacting to low carbon demands for hybrid vehicles and offshore investment in wind and hydropower energy. A study by (CEDEFOP, 2012) focus on employers claims of skill shortages for crucial 32 Completing these government initiatives are the climate change strategies and local initiatives being established by the City of Copenhagen. The city is beginning a new climate strategy. The primary focus of this plan is to achieve the determined target of being the first carbon free capital all over the globe by 2025. On its journey of being carbon free capital, Copenhagen predicted that new investments created from this move could generate between 28,500 and 35,000 new jobs (Strietska-Ilina et al., 2011). The Capital Region of Denmark is helping these initiatives by introducing a climate strategy that spreads these benefits to the broader district. It’s strategy to relies on helping different actors like municipalities, businesses and research institutions to collaborate more efficiently in order to meet the challenges of climate change. The strategy and market motivators for green growth in Denmark are administrative, urban, energy, transport, waste and water management, innovation and clean-tech cluster policies. As noted before, these policy systems and approaches have been intensely rooted in Denmark’s knowledge establishments, from the Danish Technology University, to the research and development corporations, which are international leaders in generating energy solutions. These activities have generated an interior green labor market over time. As research by DAMVAD (Nordic Socioeconomic and policy consultancy) demonstrates, such initiatives have shaped a labor market, with a green jobs multiplier effect across the whole Danish economy. The green development externalities have been sustained internally, for example by the general commitment of environment standards such as ISO (International standards). In 2000, Denmark positioned as the second in Europe, for the number of businesses with ISO and environmental related accreditations, representing the benefits of first mover in the green development sector (Ulhøi, 2004). As companies agreed with government regulations jointly such initiatives have pushed Denmark to the top of the clean-tech global rankings. The process is considered as a solid testing ground in which international companies can experiment new green technologies, which moreover acts as a attraction for foreign direct investment. 33 Investment in Denmark is driving green development and green jobs. It is this green investment driven strategies that has led to remarkable outcomes, the formulation of pioneering green economic, innovation, urban development, infrastructure, transport and energy plans and legislative programs, which in the Greater Copenhagen District are being cohesive into a smart city plan but in the same way without formulating detailed green labor market architecture (Martinez-Fernandez et al., 2012). The Danish system also involves a successful labor market structure that offers guidance, and a job or education to everybody who is unemployed. The ministry of employment also has a general responsibility for measures in relation to all clusters of unemployed persons, for example, both unemployed persons on social assistance, in addition to unemployed persons obtaining unemployment benefits. Generally, the ministry’s programs do not target explicit sectors or types of professions, but aim to build a robust and flexible labor force, highlighting the OECD’s 2012 recommendations that labor market policies must focus on generating market driven labor policies that are encouraging to creating the conditions favorable for employment development and not the protection of jobs exposed to organizational adjustment pressures. Skills in Denmark Denmark has a national system for Initial Vocational Education and Training (IVET), and also tertiary vocational education. As discussed above, the main policy emphasis on guaranteeing that training reflects the requirements of economic growth, greening the economy, or related to the ongoing processes of structural modification. However, other EU member countries such as the United Kingdom, and particularly from other countries such as Singapore and the United States influenced Denmark’s education and training systems. Wages and working conditions are typically placed by cooperative agreements negotiated among trade unions and employers’ organisations. That’s lead to labor market system that is frequently referred to as the Danish Model. This uniquely Danish system is characterised by the social partners (employers, trade unions, government and the education sector) determine the rules of the market, and they are 34 in the greatest position to recognize changes in underlying labor market conditions. And normally it is believed that together they are the most successful way to prepare quick and realistic solutions, and adapt to new challenges. These stakeholders are consequently strategically and formally involved in the continuing process of developing the further education system (Strietska-Ilina et al., 2011). The European Centre for the Development of Vocational Training (CEDEFOP) in 2012 analysed the IVET efforts related to green skills. Its report on Denmark concludes that there are no comprehensive skills response strategy has been developed as part of a comprehensible policy response to climate change and environmental deterioration. This seems somewhat disappointing observation. However, the report also concludes that the long-term green focus in Danish policy is already reflected in the educational sector. IVET, and tertiary programs have over time been altered to match the demand for skills and knowledge associated to green technologies and related to the ongoing reformation. This led to the formulation of competency based objectives for specific qualifications in IVET such as energy production, reuse of energy, waste management and construction (CEDEFOP, 2012). Adding to technical skills, individuals are encouraged to reach a number of general abilities relating to management, development, and communication. Colleges are also progressively present courses, which address the climate and energy challenge, from surveying and analyzing climate effects to the improvement of energy efficiency solutions. In Denmark, there is political agreement that actions need to be taken to deal with the problem of climate change spreading across different layers of administration, from the nationwide and regional level to the municipalities level, as showed by several policy papers concerning climate change problems. Additionally there is a general agreement that the climate change challenge in economic terms is a double-edged sword offering both costs and benefits (Jamet, 2012). This has caused that several of Danish businesses experiencing first mover benefits in the green industries of the future and in appealing foreign investment into the country. Therefore, in Denmark there is a self-reinforcing two-sided strategy: one concerns the 35 subjects of climate change, and the second focuses on business development and investment attraction. (Jamet, 2012) In this context, policy is surrounded by a mixture of push and pull incentives. For example, tariffs might be raised on polluting energy sources (push). In turn, this could be shared with alternatives that favor consumers who use more environmentally friendly products or subsidies for novelty in climate solutions (pull). Yet, this policy outline does not focus entirely on development of precise types of green jobs. Rather, it aims to move the whole society in a more climate and environmentally friendly track while at the same time generating demand for new cleantech solutions (as mentioned before). New and changing skills needs Looking to new green jobs and greening of existing jobs, including skill needs for recently emerging green collar professions and with new and changing skills necessities for existing jobs in the background of greening the economy. Different industries are highlighted by government strategies as having of specific importance in driving the transformation of the economy. This might indirectly have a state-push effect on changing skills demands as mentioned in the previous paragraph. Additionally, the development of new green collar professions and the changing requirements for current jobs in Denmark will depend on Danish companies key competencies concerning green tech solutions. The Danish Ministry of Foreign Affairs acknowledged Danish capabilities in energy and cleantech solutions. Cleantech includes known industries such as solar cells, wind power, bio-based plastic, advanced lithium batteries, nano-technologies and nanocoating, and plug-in hybrid cars. Other industries are also influenced by cleantech such as agriculture, manufacturing, waste management, and building construction (CEDEFOP, 2011). 36 Emerging green collar occupation This part of the dissertation focuse on green collar occupations that result of policies to mitigate and familiarize to the impacts of climate change. In most of the sectors in Denmark we could observe greening of existing professions over the past decades often driven by regulations and guidelines based on existing technologies. Recent policies to move more rapidly towards a low carbon economy are introducing further refinements to occupations and the rise of cleantech technologies a much wider concept than a green focus results a technology convergence. In the environmental technologies industries, new green jobs have quickly developed. As example, wind turbine workers are now numerous. New cross-sectorial professions could also emerge, like in cleantech firms as in energy examination and energy efficiency services. Some developing jobs in cleantech are new; could be termed as hybrid for example the agricultural meteorologists, solar installers, bio energy specialists, energy assessors, green accountants and manager in renewable energy. Generally, these progresses imply that a sectorial approach to study the greening of jobs is likely to be inadequate because it will not include jobs generating opportunities from the professional convergence between analytical skills service elements and technological skills elements describing how a business uses essential capabilities and technologies to present new knowledge intensive systematic services in a worldwide market for energy efficiency.(CEDEFOP, 2011) As an application of the suggestions of the Danish Globalisation Council, a division was built to complement the cooperation in handling a dynamic identification of shifting skills and professional demands caused from development of new industries, sector merging and technological development. This unit conducted a study focused specifically on 80 cleantech businesses. It comprises an in-depth analysis of 10 firms characterised by remarkable growth and innovative capabilities and representative of the convergence of professional profiles that have been generated as a result of new 37 market opportunities. By using a job function analysis, the study also analysed new and changing occupational demands at an upper-secondary profile for skilled workers. Main drivers and trends within cleantech over a 3-4 year perspective were inspected with a view to understanding the normal delay from when new needs are first recognised to the time a skilled employee with an upper secondary qualification joins the labor market. The study shaped 12 competency classifications relevant to 15 occupational profiles (CEDEFOP, 2011). The firms strongly recommended that current upper secondary vocational education should be revised as largely as possible rather than generating totally new jobs for two reasons: • Firstly, it takes less time to restore current programs; not least because of the wide-ranging competency based way the educational order of qualification is designated. • Secondly, for recruiting reasons it is better for companies that new qualifications do not alter titles often, as it usually takes times to build enough trust in the creditability of a new program The analysis of job purpose in cleantech businesses determined that the current skills represent a solid basis for providing the competencies for developing cleantech skills. The conducted study concluded that there is no clear justification for the development of entirely new programs concerning cleantech. Instead it suggested that present qualifications be adjusted, by developing specific courses and formation programs in order to match the requirements of the cleantech. Green businesses designated that there is a need for revision of existing vocational training competency targets in the following occupational profiles: auto mechanic, technical insulation, electro technician, supply technician; cooling technician; plastics technician, process technician; wind technician; industry technician; industry electrician and automation technician. However, the study does not take in consideration the variety of short programmes that already have been developed by the IVET 3 3 Initial Vocational Education and Training 38 Skills needed to greening existing jobs This Part concerns the greening of existing jobs as an outcome of policies to dealwith the effects of climate change. A lot of sectors have experienced a continuing greening transformation in the labor market by time, starting already in the 80’s as mentioned previously. For the period from 1997-2002 a total of 500 billion Danish Krone (around EUR 67 billion) was assigned to motivate employment growth of green jobs (CEDEFOP, 2011). The educational system has been changed progressively to support formal qualifications with green requirements of the labor market. Several programmes have been adjusted to match the demand for skills and competences related to green industries. But developments were mostly motivated by regulation, while recent development are significantly broader, with a real market pull, additionally enhanced by R&D and innovation investments in this field for enterprise creation. Energy: Denmark is one of the most efficient countries in energy in comparison with the other EU countries, Since 1980 the Danish economy has grown by 78%, while energy consumption has stayed more or less stable and CO2 emissions have been reduced. The portion of renewable energy in entire energy consumption has boosted significantly from 1994 to 2004, from 6.4 % in 1995 to 27.7 % in 2004 (Carvalho, 2012). The main renewable energy sector is the wind power, second is biomass and bio-waste energy share. The transformation towards greener energy has caused a significant growth in Danish exports of clean energy technologies, driven mostly by wind turbine industry. The overall number of workers employed in energy industry was about 28,000 in 2004, of which the main part consists of persons with an upper secondary vocational qualification. Since 2003, the overall number of worker employed has increased and predictions show that employment will additionally increase by 20,000 people between 2004 and 2016.(Carvalho, 2012) On the other hand, an ageing workforce might influence the demand over 50 % of the present workforce in the energy supply industry as most of its employees are above 39 than 50 years old. Predictable demand mainly concerns skills at an upper secondary vocational level. Also, the greening of related occupations is likely to drive other complementary green jobs. Waste: Denmark was the leading country in Europe to announce a prohibition on landfilling of waste that could be incinerated. The public objective for waste recycling is to be converted into clean energy sources. All municipalities have public incineration plants, and big cities normally have many of them. Worker employed at the landfills were low skilled without training and the work could not be observed as attractive. Increasing demands for energy efficient and environment friendly solutions have changed the occupational profile for those workers at waste treatment facilities. Besides it has increased the attraction of those jobs. To adapt the changing of skills needed at the plants. The Danish Technological Institute implement the development of public labor market vocational training courses. At each plant the waste must be rearranged in different groups to optimize recycling. For example waste from agricultural is turned into weed free soil, and then sold. Other inputs of waste will be used after treating for energy efficient heating or electricity. That is why employees at the workplace must have some of the following essential skills • Identify the difference between chemical substances that let them able to treat waste correctly. • To be capable to handle risky waste properly according to specifications to decrease associated risks to themselves and to others. • To be able to categorize different forms of waste properly. Construction: Over the past decades, the total building stock in Denmark has increased by Approximately 40%. Simultaneously, construction in Denmark has the ability to minimize energy usage with climate-friendly solutions that decrease CO2 emissions. There is a robust demand and attention on energy efficiency in the construction sector, High energy efficiency in buildings has been a political priority for long times and is 40 read as one of the main priority areas among the Danish Government’s efforts to target energy and climate change challenges. The target for the construction sector includes a restoration of the current public building in order to improve overall energy efficiency and transforming them into green buildings. Vocational training already includes a course targeted to persons involved in construction systems that improve and supervise energy efficiency.(CEDEFOP, 2012) Besides the jobs generated in building operations and construction, indirect jobs will most probably be created in industrial, administration, and consulting. The majority of these jobs are expected to be done by persons already working in construction sector. In general, energy efficient measures will lead to a greening of present occupations. Architects and designers must consider the whole life cycle of the building and that green buildings are designed as single, integrated systems, they should understand the various factors elaborated in green building such as efficient heating, cooling, lighting, appliances, passive solar, thermal mass and low effect building materials. Understanding the green building concepts and the national green standards and guidelines requires additional knowledge, training, and certification. Potential of green growth job creation The green development activities and programmes started by the Copenhagen Cleantech Cluster are considered by the Capital District of Denmark as an essential and cohesive part of their efforts to improve environmental outcomes as well as motivate growth and new jobs. The cluster estimations are that about 600 clean-tech companies in the Region Zealand and Copenhagen employ some 78,000 people in 2012. (C.C.C., 2015) However, it must not be ignored that several of these firms operate across different markets at the same time. Hence, not all the employees that work in these firms work solely on clean-tech activities. In this regard the whole number of employee working in businesses undertaking clean-tech activities is around 34,000. An additional report prepared by DAMVAD estimates that the amount of work employed in the Greater Copenhagen area is around 25,000 people.(DAMVAD, 2011) This growth reproduces the new technology tracks that can be seen reflected in Greater Copenhagen, where green growth is forcing innovative business and investment opportunities, in the process, creating demand for new jobs. 41 DAMVAD tried to measure the wider contribution such firms make to green growth. They divided companies into the following green growth categories and groups • The core category of businesses belong to industries where it can be seen that more than one third, or 33%, of the industry activities are connected to green growth; • The intermediate category of businesses belong to industries where between one third (33%) and one tenth (10%) of the industry’s activities are related to green growth; • The peripheral category of companies belongs to industries where it is noted that between one tenth (10%) and one twentieth (5%) of the industry activities are related to green growth; • The annexed category of companies belongs to industries where it was found that less than one twentieth (5%) of the industry activities were related to green growth. Figure 9: the Percentage of Green Growth companies in Denmark Source :(DAMVAD, 2011) This research shows how the demand for green development solutions extends beyond core green activity businesses. 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Towards a green economy: Pathways to sustainable development and poverty eradication: United Nations Environment Programme. 51 Zervos, Arthouros, Lins, Christine, & Muth, Josche. (2010). RE-thinking 2050: a 100% renewable energy vision for the European Union: EREC. 52 6. Annex Figure 1: Added value per full-time employee from green production in Denmark. N.B: A value of 100 corresponds to the average productivity for the industry. The value of 110 means that the enterprises are 10% more productive than the average for the industry. (Agency, 2012) Table 1: Skills profile of green/greening occupations: illustrative examples (OECD countries) 53 N.B: ICT: information and communication technology. Source: (I. OECD, 2011) Table 2: Denmark’s green growth indicators N.B: High (H), Medium (M), Low (L) Source: (Martinez-Fernandez et al., 2012) 54 Table 3: Distribution of employment by green sector in Europe 2010 (EurObserv, 2011) 55 Table 4: Predicted changes in employment volumes – Mediumand low-skilled occupations in Europe NB: Green cells = short-term employment growth predicted; orange cells = employment volume decrease predicted; blue cells = no change in the short term, but possible medium-term growth. (CEDEFOP, 2012)