Climate change, just transitions and employment policies

Over time the recognition of the relationship between climate change, environmental sustainability and employment has increased, leading to both more employment policies, as well as other national development frameworks, addressing specifically climate issues. This approach has become more central to policymakers’ strategies as part of supporting a green recovery from the COVID-19 pandemic.

How to link climate change and just transitions with employment policies?

The latest ILO guidance on a Green recovery with jobs through employment policies highlights that there are two dimensions that need to addressed:

• A. How to integrate employment aspects into national climate change and just transition policies
• B. How to shape employment policies, including specific components addressing macroeconomic, sectoral and labour market policies, in ways to contribute to achieving climate goals and environmental sustainability.

Figure. Alignment and synergies between climate and environmental action and employment policies

A. Integrating employment objectives in climate policies and strategies

Policies and strategies addressing climate change are being formulated across the world. The United Nations Framework Convention on Climate Change (UNFCCC) sets the framework and provides guidance to national responses to climate change. Countries which have ratified the Paris Climate Agreement of 2015 and subscribed to the global goal of keeping temperature rise below 2° C are expected to report their actions in combating climate change through the Nationally Determined Contributions (NDCs) reports submitted every five years to the UN climate change secretariat.

…uncontrolled climate impacts will cause damage to infrastructure, disrupt business activity, and destroy jobs and livelihoods on an unprecedented scale. On the other hand, the transition to low-carbon, environmentally sustainable economies and societies could become a strong driver of employment creation, skills upgrading, social justice and poverty eradication, allowing climate-resilient economic growth and sustainable development” (ILO).

Policies to address climate change are typically presented under two distinct headings: adaptation and mitigation.

Box 1. Understanding adaptation and mitigation policies Adaptation refers to reducing exposure and vulnerability to climate change. Adaptation in ecological systems includes autonomous adjustments through ecological and evolutionary processes. In human systems adaptation can be anticipatory or reactive, as well as incremental and/or transformational (IPCC report 2022). Examples are adopting climate-smart technologies in agriculture; building more resilient housing; adjusting business models to changing weather patterns and resource scarcity; providing social protection to those losing income or assets. Mitigation refers to efforts to reduce or prevent emission of greenhouse gases. Examples are the adoption of technologies to improve energy efficiency or shifting to renewable energy sources; reducing the carbon footprint of buildings by substituting cement for natural materials; making business practices more resource efficient and less polluting; or changing consumer behaviour – for example towards using mass-transportation or non-motorized mobilityust Transition signals to need to ensure fairness and inclusiveness in climate change and environmental policies and strategies. It builds on the SDG principal to “leave no one behind” and calls for the creation of decent work opportunities and social protection for all.

B. Supporting a green recovery and a just transition through employment policies

Over the past decade, an increasing number of employment policies reflect how climate change and the transition to a low carbon economy will affect labour markets. In 2017, an ILO assessment analysed the mainstreaming of environmental issues in 13 employment policies and implementation plans in developing and emerging economies. Among these policies, the integration of environmental sustainability and concerns for climate change varied considerably in scope and level of ambition.

Integrating climate change and just transitions should happen during the design of employment policies

It is important to integrate climate change challenges and solutions at the design stage of employment policies. In particular, modelling studies should be carried out to anticipate the employment impact of the effects of climate change (e.g., increased floods in low-lying areas or islands, heat stress, persistent droughts affecting agriculture and nutrition, environmental pollution in urban areas, etc.).

The modelling should also be done for different adaptation and mitigation scenarios. The expected direct and indirect employment levels in each sector should, together with other policy priorities, guide which economic policies to adopt and where to prioritize (for example, investing in climate-smart agriculture and training of farmers, subsidizing renewable energy investment and taxing fossil-fuel based transport, stimulating green construction using local raw materials and making buildings more energy-efficient, etc.).

Based on diagnostics and modelling exercises, specific policy measures need to be identified. Drawing from ILO’s guidelines, possible measures that can be considered in an employment policy include:

• Budget support for safeguarding ecosystem services benefitting rural poor.
• Public funding backing green economy investments with jobs (green stimulus).
• Greening the investment climate through environmental impact assessments and green business promotion with jobs.
• Fiscal incentives for greening housing, business practices, waste management fees, etc., with consideration of how green tax policies impact on gender equality and other distributional dimensions.
• Public investments in decentralized renewable energies and better water and sewage management especially in urban areas.

Overall, there a suite of options for advocating for the integration of climate change concerns and a just transition in an employment policy (re-)design and implementation. A growing number of dedicated Green Jobs strategies and plans have been formulated to this effect, articulating the links with other policies.

Some general lessons for a supportive approach are emerging from recent practices of promotion a green transition, including in the COVID-19 recovery context (examples and resources can be found for Argentina, Mexico and the Asia Region):

• Articulating and advocating for making the link between recovery strategies, the green economy and the just transition framework.
• Seizing and political opportunities and identify “change agents” when new governments come on board, nurturing partnerships.
• Undertaking evidence-based analysis of green jobs in key sectors, and making the results reach policy makers in clear, actionable recommendations.
• Upholding a responsive attitude, acting as a soundboard and network broker for broadening the policy agenda and partnerships.
• Mobilizing and addressing the interests of the social partners with hands-on tools and practical advice; and engaging in social dialogue with them.

Sustaining social dialogue, with active representation of workers’ and employers’ organizations, throughout the policy process is of critical importance to enhance ownership and ensure “real economy”, pragmatic policy measures. Countries have also set up inter-ministerial committees and task forces with the inclusion of staff of the ministry of labour or employment. In some cases, support by programmes such as the UN Partnership for Action on Green Economy (PAGE) have facilitated creating the policy space in which stakeholders with varying interests can review and design of inclusive green economy and recovery strategies.