The briefing note is written by the Policy Department Economy and Science of the European Parliament. The note says that an EU energy policy communication from 10 January predicted that the energy target of 20% renewable energy by 2020 was to increase employment by 0.3%, meaning 650,000 jobs. The claim was illustrated by the estimate of 200,000 to 300,000 jobs as a result of the Biomass Action plan and 120,000 jobs in the German wind industry so far.

However, an OECD report from 2004 says that, without change in taxes and global trading, “the estimated employment impact of policies in Europe to limit CO2 emissions is rather uncertain and remains small.” The OECD argues that all energy supply sources create jobs. In other words, changes in energy supply or energy use will, like any other changes, tend to be compensated elsewhere in the economy. It adds that when tax systems are changed, often the end-effect is different from the original intentions.

Switching to renewable energy means fewer jobs in fuel processing and more in manufacturing and construction, a study from the University of California at Berkeley found in 2004. An exception would be the replacement of fossil transport fuels with biofuels, which could create a large number of jobs in low income and rural areas. Insulation jobs are mainly low and medium skilled.

The Briefing Note states that “linkages between employment creation and energy use are complex and indirect, and that policy action in this area is not simple or straightforward.” However, the authors seem to favour the sunny side of the reports and conclude that “a more rapid switch to renewable appears to have an unambiguous benefit in terms of overall employment.”

It is recommended that, given the acknowledged difficulty in making precise predictions, policy responses remain flexible. In other words: employment is going to change, but how? Frankly, we don’t have a clue.

More Information:

Briefing: Employment potential of renewable forms of energy and increased efficiency of energy use, Policy Department Economy and Science, DG Internal Policies, European Parliament, Huberta Heinzel and Loredana Sementini.