About this video

• Video Title: Can the Green Transition Work for Workers?
• Channel: New Economic Thinking
• Speakers: Robert Pollin
• Duration: 00:28:21

Overview

This video discusses the feasibility and implications of the green transition, focusing on its potential impact on workers and economies. It argues that the transition can expand opportunities and defend living standards, rather than being detrimental to workers. The discussion covers the urgency of climate action, the economic viability of renewable energy, the concept of a "Green New Deal" that prioritizes an egalitarian agenda and emission reduction, and the critical need for a "just transition" for workers in the fossil fuel industry. It also explores financing mechanisms for the transition, both domestically and globally, and addresses political opposition.

Key takeaways

• The message about the green transition needs to shift: Currently, the narrative suggests it will harm workers, but it should be framed as a means to expand opportunities and protect living standards.
• Climate action is urgent: Approximately 70% of greenhouse gas emissions come from burning fossil fuels, necessitating a phase-out to achieve climate stabilization.
• Renewable energy is cost-competitive: New solar and wind power installations are often cheaper than fossil fuel projects, making renewables economically viable.
• A "Green New Deal" can address both climate and economic inequality: It aims to build a new renewable energy infrastructure while advancing an egalitarian agenda and meeting emission reduction targets.
• A "just transition" is crucial for fossil fuel workers: This involves guaranteeing new employment, comparable wages, and pensions for workers and communities affected by the phasing out of fossil fuels.
• The cost of the green transition is manageable: While significant investment is required (estimated at 2.5% of global GDP), the cost of ensuring a just transition for workers is relatively small (0.02% of US GDP).
• Financing can be mobilized through public and private investment: This includes government spending, incentives for private investment, carbon taxes, and eliminating fossil fuel subsidies.
• Global cooperation is essential: Developing nations require financial support from high-income countries to achieve emission reduction targets and access clean energy.
• Efficiency is a key strategy: Improving energy efficiency can significantly reduce emissions and consumption, with substantial potential for improvement in countries like the US.
• Political will and effective communication are vital: Overcoming opposition, like that from Donald Trump, requires building broad consensus and highlighting the benefits of the green transition for all.

The key components of a "just transition" for workers and communities currently dependent on the fossil fuel industry are:

• Guaranteed new employment: Ensuring workers have access to new job opportunities.
• Comparable wages: Providing wages that are similar to their previous earnings.
• Defended pensions: Protecting the retirement benefits that workers have earned.
• Maintained living standards: Ensuring that workers can continue to live at their current standard.
• Support services: Including retraining and relocation assistance, although these are seen as supplementary to the core guarantees.

A Green New Deal can address both climate and economic inequality by synthesizing two projects: advancing an egalitarian agenda and meeting emission reduction targets to achieve net zero.

This involves:

• Building a new renewable energy infrastructure: This process is a major source of job creation and is more labor-intensive and cost-effective per dollar of expenditure compared to military spending or maintaining the existing fossil fuel economy.
• Prioritizing workers and communities: Establishing a "just transition" for those currently in the fossil fuel industry by guaranteeing new employment, comparable wages, and pensions, thus defending their living standards.
• Reducing poverty and expanding opportunities: By investing in renewable energy and efficiency, especially in developing regions, it can provide access to affordable electricity, transform livelihoods, and reduce disparities.

Efficiency is a key strategy in the green transition because it offers a significant opportunity to reduce emissions and energy consumption. The speaker notes that the energy-to-GDP ratio, or energy intensity, can realistically be cut in half globally. This can be achieved by raising efficiency standards, as seen in the comparison between states like California and West Virginia, or countries like the U.S. and Germany. Improving efficiency is presented as a primary thrust towards achieving zero emissions and is more labor-intensive, further contributing to job creation.

The cost of ensuring a just transition for workers is low because:

• Job creation in the green economy offsets job losses: The investment in building a green infrastructure is projected to create significantly more jobs than will be displaced by phasing out fossil fuels. For example, in West Virginia, the number of jobs created by green investments is estimated to be 30 times more than the annual job displacements.
• Phasedown of fossil fuels: The transition is a gradual phase-down, not an immediate shutdown, allowing for voluntary retirements and a manageable rate of displacement.
• Relatively small scale of displacement: When considering the entire economy, the number of workers facing displacement each year is a small fraction of the overall workforce, making targeted support feasible.
• Cost is a fraction of GDP: The estimated cost of guaranteeing comparable wages, pensions, and retraining for displaced workers is a very small percentage of GDP, described as "almost trivial" (0.02% of GDP for the U.S. economy).

Therefore, while substantial investment is needed for the overall green transition, the specific costs associated with supporting affected workers are proportionally minimal.

The transcript doesn't provide an exact ratio of jobs lost to jobs gained. However, it strongly emphasizes that investing in the green economy creates significantly more jobs per dollar of expenditure than in the military or maintaining the existing fossil fuel economy.

Specifically, it states:

• You get about three and a half times more jobs per dollar of expenditure by investing in the green economy than in military or maintaining fossil fuels.
• In West Virginia, building out the green economy could create around 30,000 jobs, which is 30 times more than the job displacements that result annually from phasing down fossil fuels.

The speaker is cautiously optimistic about reaching the 2050 net-zero emissions goal, stating that it "remains within reach." Their positivity stems from several factors:

• Economic viability of renewables: They highlight that new renewable energy installations (solar and wind) are now cheaper than most fossil fuel projects, making the transition economically feasible.
• Manageable investment scale: The estimated investment required to build out a 100% renewable energy and high-efficiency infrastructure is about 2.5% of global GDP, which they deem achievable, especially with a mix of public and private funding.
• Potential for efficiency gains: There's a significant opportunity to reduce energy consumption relative to economic activity by improving efficiency standards, which can drastically lower overall energy demand.
• Job creation potential: The transition itself is seen as a major source of job creation, which can help offset job losses in fossil fuel sectors and contribute to economic growth.
• Policy mechanisms exist: Tools like carbon taxes, eliminating fossil fuel subsidies, incentivizing private investment (e.g., through the Inflation Reduction Act), and central bank policies (like buying green bonds) can mobilize the necessary financing.

However, the speaker also acknowledges challenges:

• Missed intermediate targets: They recognize that the 2030 emission reduction targets are unlikely to be met, meaning consequences will be faced for not hitting these milestones.
• Political opposition: Figures like Donald Trump actively oppose climate action, posing a significant political hurdle.
• Global cooperation is needed: Especially for developing nations, significant financial and technological support from high-income countries is required, and current commitments (like the $100 billion per year promise) have not been fully met.