Green growth entails a growth path that addresses ecological, economic, environmental and societal needs of a country. Green growth policies with special focus on employment generation are a challenging target for most developing countries. This is because employment generation is expected to reduce inequality and address the social dimension of sustainability, apart from creating a holistic development path by ensuring the trickle-down impacts of income generation. The need for such an integrated development path was first recognised by Thirteenth Finance Commission of India in 2009.
Skills for a Greener Job Market
Lack of availability of a sufficient number of skilled workers in India makes the issue more challenging. Along with lack of availability, there is also a mismatch between skill requirement and availability. Traditional vocational training schemes have proven to be inadequate in addressing this issue. Over time, the skill shortage has aggravated the existing voluntary, involuntary and frictional unemployment challenges within the Indian economy. The differential nature as well as demand of various skill requirements in organised and un-organised sectors has created a disparity in incomes across and within sectors, leading to rising inequality in the country.
Currently, only about 5 percent of the workforce has formal skills, as compared to more than 50 percent in many developed countries such as USA and Japan. The recent initiative of ‘Skill India’ under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 2018 by the Central government has given rise to a hope that this challenge will be addressed. The enormity of this challenge is going to increase in the backdrop of an expected addition of 12 million people to the workforce every year in India. This establishes the need for creating both jobs and skill within the Indian economy to address future developmental goals. The question is to identify the intervention sectors where skilled and unskilled job creation can happen to address the long term goal through a green growth and development path.
Green building and renewable energy sectors are two important components of green growth intervention. These sectors have a huge potential for skilled job creation, and thus policy makers need to focus on them. Investment and targeted intervention can create multiplier impact on the whole economy.
India needs to transit away from its larger dependence on fossil fuel-based energy supply. Due to financial and technological challenges, 100 percent dependence on renewable energy may not be a feasible solution in the short and medium term. Thus, countries should focus on a diverse portfolio of energy supply from both fossil fuels as well as renewable energy resources. This will also address the country’s long-term energy security. So a green growth and development path will address both the social and environmental domains of sustainability with co-benefits of job creation and inequality reduction.
The Union Ministry of New and Renewable Energy (MNRE) is expected to commission 15.62 GW of new renewable energy capacity in 2018-19, including a target of 11 GW of solar capacity. This investment push in the renewable energy sector is also meant to generate demand for new goods and services, which has the potential social co-benefit of employment generation and the environmental co-benefit of emission reduction in the medium and long term. However, this can happen only in the presence of effective institutional and governance mechanisms. As per a recent article, investment in renewable energy can create direct and indirect, skilled and un-skilled as well as full-time (long term) and part-time (temporary) jobs.
As per a recent estimate by CEEW and NRDC, the solar sector alone can create one million full-time-equivalent jobs by 2022 to achieve 100 GW grid connected solar power. However, if rooftop solar gets priority, job creation can touch 1.3 million. While direct jobs may be created in design/ development, construction/installation, and management/maintenance phase of the project, indirect jobs can be created in manufacturing of equipment, supply chain, banking/financial sectors other than induced job creation to cater to the local demands of employees. Thus, relevant skills related to all the above categories will be required if India wants to focus on renewable energy.
Currently, only about 5% of the workforce has formal skills, as compared to more than 50% in many developed countries such as USA and Japan. The recent initiative of ‘Skill India’ under the Pradhan Mantri Kaushal VikasYojana (PMKVY) 2018 by the Central government has given rise to a hope. The enormity of this challenge is going to increase in the backdrop of an expected addition of 12 million people to the workforce every year in India.
The green building sector is another area of intervention which requires more unskilled than skilled workers in the initial stage. However, with maturity of building projects, the potential for more and more skilled (as well as unskilled) workers usually increases. Hence, an investment in the green building sector also has a spillover effect in terms of enhancing its job creation potential and impact in rural and urban household classes. As per a recent estimate, investment in green building and renewable energy sector can create 6.1 million skilled and 2.4 million un-skilled jobs by 2020.
Urban and rural impact
Currently, the rural-urban migration complemented by a large scale informalisation in the organised sector, along with the tapering of the growth of the organised sector poses a barrier for the trickle-down effect of new skill generation within both urban and rural households. Return on investment in skill development in rural India is higher due to its scarcity, enabled by large-scale migration, organised and unorganised sector divide, a large-scale unorganised segment and even informalisation within the organised sector.
Green growth and development interventions are expected and can create more employment for people from the agriculture sector, raise their skill levels and generate more skilled and unskilled jobs for them in the industry and service sector of the growing economy. This in a way will create larger economic and social sustainability in the long term and will help in moving towards a peaceful society by addressing the SDG 16 of peaceful society with equitable justice.