The European Foundation for the Improvement of Living and Working Conditions, Eurofound, foresees that the successful transition towards a low carbon economy, as defined in the Paris Agreement, will result in a GDP growth of 1.1% and employment growth of 0.5% in the EU, from now until 2030. Globally, the forecast indicates that China will also benefit from a transition with low carbon emissions, but the United States will experience a fall of 3.4% in its GDP and a 1.6% decrease in employment.
The forecasts in the Eurofound report are based on the assumption that there will be no significant friction in the labor market after the transition, in particular based on the fact that the labor force will adapt to the structural change in terms of the skills requirements. This premise means that funding would be available for restructuring and that countries would maintain current levels of performance in key economic sectors.
The full implementation of the Paris Agreement would be positive for the EU because of the investment activity required and the impact of lower spending on fossil fuels
The model shows that the full implementation of the Paris Climate Agreement would be positive for the EU as a whole, both in terms of GDP and employment growth. This is mainly due to the investment activity required to achieve such a transition, along with the impact of lower expenditure on fossil fuel imports. The shift towards the production of capital goods, such as equipment, machinery and buildings, will result in a significant increase in the demand for construction and labor for related occupations.
Impact of the Paris Agreement by countries
By countries, the study foresees a greater boost to GDP in Latvia, Malta and Belgium. With about 6%, the estimated growth in Latvia’s GDP is by far the most significant, and is due largely to investment in energy efficiency and to the reduction of fossil fuel imports relative to GDP.
Belgium is among the countries that will experience a marked increase in employment due to the economic restructuring required
Belgium is also among the countries that will experience a marked increase in employment due to the economic restructuring required to fully implement the Paris Agreement, which will result in higher consumer spending in labor-intensive sectors, such as retail, hospitality and catering.
Spain and Germany would experience a similar phenomenon. In the case of Spain, the report points out to the significance of electricity of photovoltaic origin and the lowest prices of energy to generate disposable income for the benefit of labor-intensive sectors. According to the study estimates, the only country that will experience a net decrease in employment is Poland, due to its large coal-mining sector.
Climate change is expected to have highly serious implications for living and working conditions worldwide
Eurofound’s chief researcher, Donald Storrie, explains the data provided by the report in the following terms: “Climate change is expected to have highly serious implications for living and working conditions on a global scale; especially the people who are marginalized socially, economically or, in other words, those who are particularly vulnerable. This report shows the considerable economic and employment dividends for Europe derived from the fight against climate change and the full implementation of the Paris Agreement. ”
The results of this report, as well as other key results of the project, will be discussed at the Future of Manufacturing in Europe event, to be held in Brussels on April 11.