Recommendation # 1: A Community-Based Employment and Development Program
Program Recommendation # 2: A Clean-Tech Funding and Consulting Program for Small and Mid-sized Companies
President Xi’s bold commitment to make China carbon-neutral by 2060 during the UN Climate summit in 2020 raised hopes that the world’s largest carbon emitting country will finally take the necessary steps to drastically reduce their pollution habits. Despite this, China continues to introduce new coal capacity to cover the increasing energy needs that a growing industrial base and consumption demand. In wanting to achieve economic stability and sufficient employment across the country while decreasing emissions, China’s government is facing a challenging balancing act between central and local government needs, spurring economic opportunity versus closing down polluting industries like coal, chemicals, steel, cement, etc.
Even before COVID-19, employment growth in urban areas had dropped from over 4% a year earlier in the decade to only 2.5 % in the past few years. Nearly 17 million jobs in industry and construction have been lost since 2014 and the often-touted hope that service jobs will absorb laid off workers has not materialized. Growth has even been slowing in the service sector, while at the same time a growing skills mismatch becomes clearer; this is evidenced by the fact that just under 40% of the labour force have completed secondary school and slightly less than 20% have received a college education.
In addition, there is a disconnect between central government environment policy and local government’s needs to keep social peace through economic and employment. Many communities and regions have developed and continue to rely on economic activity and employment around the natural resource of coal. While the national government has put a reduction of coal in the energy mix on its agenda, regional and local governments struggle to make that happen without massive layoffs in structurally weak regions. They keep falling back on coal-based activity for lack of alternative resources while roll-out of environmentally cleaner technologies progresses slowly. The lack of immediate obvious alternatives to bolster local growth means regional governments have to make use of the resources available, arguing by using coal environmentally and efficiently, they contribute to China’s green transition.
In recent years the government has realized the need to support regions and provinces in keeping and growing employment opportunities while reforming the overall industry structure. As early as 2016, Premier Li Keqiang said that the government would set up more than 100 billion RMB in funding for the job transfers (such as the chemical industry). In 2020, the State Council’s Note on Stabilizing Employment called for setting up an improved mechanism to stimulate employment by strengthening financial support for enterprises so as to stabilize work places; they seek to provide on-the-job training to reskill the workforce, lower fees for insurances, offer more flexibility with work time, provide compensation for layoffs, and reimburse delayed wages. Recent government policies call for higher quality employment, which goes hand-in-hand with the aim to reform the industry structure and create a pathway for a stronger tertiary industry including data centres for e-commerce or upgraded and cleaner industrial production.
However, it remains questionable whether the tertiary – often urban – sector can absorb a large number of unemployed workers because many will come from closures and restructurings within heavy industry and coal in structurally weak regions. A 40- to 50-year-old chemical operator in China’s Northeastern provinces is unlikely to find employment in the service industry due to lack of alternative jobs and a matching skill set. Often, these workers are also not particularly mobile, thus restricting access to alternative employment even further.
We suggest two programs that hold the potential to support the clean-tech, green job transition in the mid-term: a community-based employment and development program and a clean-tech funding and consulting program for small and mid-sized companies.
Recommendation # 1: A Community- Based Employment and Development Program
Following a strictly national development strategy may be less fruitful to help reduce heavy industry and improve green employment, but complementing it with a local development process that better connects communities with expertise and research for alternative opportunities.
In order to assist regions dependent on coal to transition away from unclean energy and mitigate the long-term impact of de-industrialization, a local co-creation process within which all relevant stakeholders of a community should replace top-down development policy. Together, community leaders, government actors, local business leaders, and the releasing company set out to define the impact of a factory closure on the whole of the community. Representatives of all groups undergo a process of design thinking to turn the identified issues into ideas for solutions. The group defines the tools and help that is needed to transform the community. Studies have shown that the process of designing new business ideas that benefit the community in participation with the locals are more powerful.
The process would consider three major areas of development:
- Existing economic activities and community needs to define business areas;
- Enabling factors such as space needed, financing needed, partnerships needed, regulatory support needed;
- And capacity building through training, partnerships/participation, and business model development.
Such an approach should be driven by the affected community together with the downsizing employing unit and backed by government subsidies or financing programs. The impact should be measured by the number of workers finding new employment and being reskilled
Program Recommendation # 2: A Clean-tech Funding and Consulting Program for Small and Mid-sized Companies
Many small- and medium-sized companies (e.g., in the chemical sector) continue to operate production processes that are polluting and not energy efficient. For some of these companies operating on a very small profit margin, the upfront investment to transition from polluting processes to cleaner processes or to innovative, more sustainable products are too large to make. Others are simply overwhelmed by the plethora of environmental regulations, resulting in a paralysis that keeps them from starting a transition.
One solution could be a peer-to-peer consulting process led by a group of representatives from companies who have successfully embarked on a clean-tech transition and organized by relevant industry associations. This group of experts could help small- and mid-sized heavy industry companies make a transition by defining the steps from easy-to-implement first changes to difficult-to-implement overhauls, designing a concrete plan and timeline for the transition, and spelling out the necessary financing and skills needs that would allow for such progress. The expert group in line with the industry association and relevant regulators would monitor progress and provide needed knowledge and expertise whenever needed. The plan could be used as a document to gain necessary financing from government to invest in the changes. Progress would be measured by the number of companies having embarked on a transition from old to new technology, comprehensiveness of transition plan, and rate of emission abatement.
Ministry of Human Resources and Social Security
Email (for English): email@example.com
Ministry of Ecology and Environment of the People’s Republic of China
Contact (for Chinese): http://22.214.171.124:8090/bzxx/pages/Proscenium/LetterContent.jsp
Email (For English): firstname.lastname@example.org
Premier Keqiang Li, The State Council
Contact (for English): http://topic.media.gov.cn/topicdata/en/2020/index.html
Email (for English): email@example.com
https://www.ft.com/content/cdcd8a02-81b5-48f1-a4a5-60a93a6ffa1e (accessed Jan 21, 2021)
(accessed January 3, 2020).
Author’s own conversations with industry leaders
MIT D-lab co-design summits: https://d-lab.mit.edu/innovation-practice/global-workshops/co-design-summits
Author’s own contributed research in Special Program for Urban and Regional Studies (SPURS) at MIT. “Recommendations for urban integration policy in Buenos Aires Metropolitan Area, Argentina”, October 2019
This Post was submitted by Climate Scorecard Country Manager Annette Wiedenbach
Image: Getty Images