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Green jobs on the rise - world climate business revenue $2 trillion by 2020

Published 29th September 2009 - 13 comments - 3031 views -

The worldwide New Green Deal is becoming a reality. Global revenues from all climate-related businesses are now worth a stunning $530 billion. It could even exceed $2 trillion by 2020. In Europe 3.4 million jobs are already directly related to the low carbon economy, compared to 2.8 million jobs in polluting industries. Climate change has become a real business driver and more and more companies are interested in becoming green.

The green world economy

The famous 2006 Stern Review on the economics of climate change forecasted climate-related revenues to climb to $500 billion by 2050.

However, HSBC Global research estimates that we have already surpassed that. Global climate-related revenues now already top a stunning $530 billion and are likely to exceed $2 trillion by 2020.

The proliferation of green deals all over the world caused a rise of 75 percent in this market in the last year alone. This contrasts starkly with a slowdown of the world economy in 2009 to less than 1% GDP growth.

The climate sector has not only surpassed Stern predictions. According to the HSBC report it has even surpassed the size of the global aerospace or defense industry.

Countries such as the United States, Japan, France, Germany and Spain profit the most from this new green growth. They account for 76 percent of global climate revenues.

HSBC differentiates between four main categories in the green economy. Of these four, investments in energy efficiency present the largest opportunity, with a 30 percent return on investment. Carbon/climate finance follows closely with investment returns at 24 percent. The two other climate investment categories are low-carbon energy production and the control of water, waste and pollution.

Green jobs

Behind every company there are workers. Behind every profit there is a wage. The green economy is no different and is already boosting employment.

The WWF report “Low carbon jobs for Europe” shows that at least 3.4 million European jobs are directly related to renewable energy, sustainable transport and energy efficient goods and services. This compares with 2.8 million jobs in polluting industries, such as mining, electricity, gas, cement, and iron and steel.

Split up in different sectors this means 400,000 people are employed in renewable energy activities, some 2.1 million in efficient transport, and over 900,000 in energy efficiency goods and services.

These green jobs require a very broad range in skills. Low to medium skilled workers are needed for manufacturing, installing and the maintenance of wind turbines and solar panels. High skilled workers are needed to research and develop the innovative green solutions for tomorrow.

Green business model

In order for businesses to continue green investments, the business model needs to change. Paying attention to the impact of economic activity on the planet needs to become a source of profit.

A recent study suggests this is already the case. Sustainability is now seen as a major business driver with 52 percent of companies (65 percent of large companies) designing and offering sustainable products or services, about 72 percent of American companies (85 percent of large) reducing costs through improved materials efficiency, and 58 percent (60 percent of large) manufacturing or sourcing domestically/locally. In addition, 59 percent of large companies offer energy-efficient products and another 59 percent provide customers with more information about social and environmental impacts of their products and services.

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Governments need to continue their support for the green economy

However, to support these changes in business model and the profits in the green business, governments need to sustain their support for the green economy. Much still needs to be done after the initial money boost through the green deals worldwide.

Buildings are still using too much energy while it is economically viable to renovate them to become more energy efficient. The energy production needs to change to renewables, while a smarter electrical power grid is needed to support this change. Transport is still far too carbon-fuel dependant while investments are required to make carbon-friendly alternatives such as trains and boats more attractive. Support in many other sectors is needed to supply the green economy with the adequate infrastructure and provide incentives to businesses wishing to go green.

Governments have often lagged in implementing climate change policy, sometimes even in spite of an obvious direct positive impact. Belgium for example has been one of the three EU countries who did not oblige car fuel to be mixed with biofuel. As a result 100s of jobs in the Belgian biofuel sector were lost to the gain of the oil sector. Other countries have lagged in renovating their building stock to use less energy, in spite of the fact they would not have to pay one Eurocent for the works.

In my next post I will therefore focus on the recovery packages of governments around the world to combat the economic crisis. Was all the green rhetoric reflected in actual spending of all that public money? And how well did Europe score?  

Category: Climate Politics, | Tags: climate change, europe, economy, green jobs,



Comments

Daniel on 29th September 2009:

Interesting, and great news smile I look forward to the next post.


Just a thought…  which business is not climate related?

Waldo Vanderhaeghen on 29th September 2009:

Good point Daniel. I wanted to access the complete HSBC research paper to find out more about exactly this point. However, access is reserved for paying members of HSBC.

In the Reuters article they talk about ‘climate related revenues’ which is less ambiguous. I rephrased it slightly which was not a good idea, so I will edit it to reflect your comment. Thanks! Hope it’s clearer for other readers now smile

Federico Pistono on 30th September 2009:

Thank you Waldo for these data, very interesting indeed.

Vitezslav Kremlik on 01st October 2009:

Well well.

I had a discussion in Bio Mio with someone, who said something like “the deniers are paid by Big Oil to tell lies - on the other hand there are no such greedy financial interests behind environmentalism”.

And now I hear, that environmentalists are going to earn 2 trillion USD due to subventions, cap-n-trade, green legislation and and green policies???

Dunno, but to me its seems like a financial battle between Green Money and Oil Money. Who conquers the market? Who conquers our wallets?

No financial interests behind IPCC? Just read the article above. And Th!nk about it.

Hemant Anant Jain on 01st October 2009:

Really interesting Waldo. We needed that data.
In fact, the whole economic model needs to change and the sooner we realize that we need a sustainable model of economics, the sooner we will start giving this data the importance it deserves.
Thanks for this post.

Waldo Vanderhaeghen on 01st October 2009:

@Frederico: thanks smile

@Vitezslav - there are indeed a lot of economic interests behind the environmental economy. In my perception the problem is that they are not yet visible and have no big vested interest lobbies speaking on their behalf, yet.

I was asking the question in your article on the misconception of the role of CO2 on climate change, of why. Why did a scientific consensus arise that climate change is man-made? I’m happy to have inspired you to answering that question. However, I think you need to look further than the green economics as they are not institutionalised and thus not powerful.

Green policy (which is at the roots of the success of the green economy) derives from three reasons: energy security (big one!), innovation and employment (bringing oil-dollars back home) & climate change.

Waldo Vanderhaeghen on 01st October 2009:

@Hemant: the change in business models is at the core of making our economy greener. I will make another post on green business models in the buildings, logistics, ICT & other sectors of our economy.

Several businesses already are shifting to internalising green growth profits, but the government needs to provide the regulatory framework and consumers need to push the change.

Paul Montariol on 08th November 2009:

I join you entirely. You can read that I wrote on subject:

http://climatechange.thinkaboutit.eu/think2/post/indirect_competitiveness_source_of_great_richness

Mike on 09th November 2009:

Everyone is cashing in on the green. It’s all about making everyone feel good about themselves without actually doing anything to help the environment. And you suckers keep lapping it up.

Green jobs: A bunch of busy-bodies running around not actually doing anything.

The real cost of “green jobs”

Optimistically treating European Commission partially funded data1, we find
that for every renewable energy job that the State manages to finance, Spain’s
experience cited by President Obama as a model reveals with high confidence,
by two different methods, that the U.S. should expect a loss of at least 2.2 jobs
on average, or about 9 jobs lost for every 4 created, to which we have to add
those jobs that non-subsidized investments with the same resources would
have created.

The study calculates that the programs creating those jobs also resulted in the
destruction of nearly 110,500 jobs elsewhere in the economy, or 2.2 jobs
destroyed for every “green job” created.

Each “green” megawatt installed destroys 5.28 jobs on average elsewhere in the
economy: 8.99 by photovoltaics, 4.27 by wind energy, 5.05 by mini-hydro.

These costs do not appear to be unique to Spain’s approach but instead are
largely inherent in schemes to promote renewable energy sources.

Mike on 09th November 2009:

Each “green job” in Spain has been created at the cost of $800,000 and 2.2 real jobs. Spain has about 20% unemployment.

Paul Montariol on 09th November 2009:

Sweden created green jobs for less expensive; One should not create in the urgency.

Security Jobs in Atlanta Georgia on 13th November 2009:

This is awesome. We must really act now!
To those who are interested on having a Security Jobs in Atlanta Georgia career path, please visit Security Jobs in Atlanta Georgia for the latest job of the day review.

Hmm on 21st January 2010:

2.1 million of those are in transport: this includes 900,000 in urban public transport, and 900,000 in rail. It may be a bit of a stretch to claim that all our trains and buses are thanks to the green economy..

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