Economic and social benefits of the energy transition

The idea that sustainability comes at a cost is a prejudice that is hard to shake off. But, in actual fact, the opposite is true: the development of renewable technologies, investments in sustainable projects and the application of circular economy models can offer an extraordinary opportunity for the economy, with the creation of new professional roles and the development of original business models, bringing with them tangible benefits for society as a whole. The benefits of the circular economy In general, economic activity is considered sustainable when it is centered on the reduction of environmental impact, limiting the emission of greenhouse gases, the circularity of processes and reducing the exploitation of resources. This transformation certainly has significant economic and social value: just consider the extent to which the UN’s 2030 Agenda and the Sustainable Development Goals (SDGs) represent a lever for the economic growth of the communities concerned. SDG#12 in particular concerns “Responsible Consumption and Production,” which in recent years has also evolved to include the circular economy paradigm. While the linear economy is based on the “produce-consume-discard” model, the circular paradigm functions more like the cycles of nature: products are designed as modular systems in order to last longer, they can be dismantled easily, redeployed or regenerated; waste is kept to a minimum and waste products are valued and transformed into resources to produce other goods, extending their life cycles ad infinitum. Finally, the exclusive ownership of products is being replaced by their use as services or through sharing. When this paradigm is applied to the energy transition, it prioritizes the use of renewable forms of energy over fossil fuels, accelerates processes such as digitalization and electrification in order to make consumption more efficient and develops innovative services like electric mobility to reduce environmental impact. Generally speaking, wasting less – food, energy and raw materials – means ensuring more resources for those who today do not have enough, reducing imbalances, both at international level and within nation states, and redistributing wealth. In this respect, sustainability can also be a tool for social equity, and a way to rebalance fairness between different parts of the world that are at different stages of their development. But sustainability is also the best approach through which to improve people’s health and wellbeing, for example ensuring energy access to all and improving both the quality of air and life in our cities. Creating jobs – green jobs If, on the one hand, it is relatively straightforward to understand what we mean by the term green jobs, on the other, a formal definition for these types of professions is still lacking. The description that is often referred to is the one provided by the United Nations which, through UNEP (the United Nations Environment Programme), has defined green jobs as ones that contribute in an incisive way to preserving or restoring environmental quality. This broad definition is applicable to various compartments, from manufacturing to services, from research & development (R&D) to agriculture. In short, green jobs already exist in many areas where we wouldn’t suspect to find them. According to the 2020 International Renewable Energy Agency (IRENA) report, around the world there are around 11.5 million green-collar workers, half a million more compared with 2018. These professions are concentrated predominantly in China, the United States and the European Union, with a prevalence in the renewable energy sector: the majority of workers are employed in photovoltaic (33% of the total, or around 3 million people), in particular in Asia, where two-thirds of green-collar workers can be found. According to the Global Renewables Outlook 2020, which was also published by IRENA, the renewable energy sector alone will produce 42 million jobs by 2050, nearly four times as many as today. In general terms, the energy sector is where the creation of new professional roles is most visible. Just think of the data and IT scientists employed in the digitalization of power generation plants, or the experts using machine learning to develop predictive maintenance, or the engineers specialized in energy efficiency. But there are also new green jobs in, for example, the production chain for research into new eco-sustainable materials for the construction industry. Indeed, a green job combines technical skills with a sensitivity towards issues of environmental protection, energy efficiency and circularity. In short, sustainability creates benefits from many points of view, not only for the environment. It is no coincidence that in recent years there has been a growing demand among financial investors for features such as the capacity to create long-term value and reduce risks. New financial sustainability tools are being created that are connected to the UN’s SDGs, thereby confirming, not only that sustainability is not a cost, but that it also makes good business sense. And perhaps, for this reason, it may be able to solve the problem of climate change.

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Sustainability creates value for the economy and society

Sustainability creates value for the economy and society

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