Making The Labour Market “Fit For 55”: Not Without Skilling

The European Commission unveiled its much anticipated “Fit for 55” landmark legislative package last week. The package sets out how the European Commission intends to make Europe the first climate neutral continent and achieve its ambitious climate policy targets, including a 55% reduction of carbon emissions by 2030 (compared to 1990). “Fit for 55” underscores: the challenges ahead are monumental and the necessary transformations unprecedented. To make these transformations socially just, we urge stakeholders to consider the skills perspective.

With the “Fit for 55” package, stakeholders now have more clarity about the necessary transformation of the European economy and the decarbonisation of such key sectors as transport, housing and energy. The list of actions is long, but some of the key proposals by the Commission include a full phase-out of combustion engine car production by 2035, a new emissions trading system (ETS) for the residential sector and road transport, and the Carbon Border Adjustment Mechanism (CBAM), which would reflect the carbon footprint of imported goods (EC 2021a). To come into effect, the “Fit for 55” package will have to be approved by both the European Parliament and the member states in the coming years. One thing is clear already: the labour market is the centrepiece of the European economy and its adaptability will be decisive in achieving a socially sustainable transition.

Crucially, the “Fit for 55” package also proposes establishing a new Social Climate Fund to mitigate the social impact of the new carbon pricing on households and it stresses the need to complement measures with labour market and skills policies (EC 2021b). But while the proposal underlines that skills policies are key to leveraging the transition for job creation, it distinctly lacks a concrete skilling framework and labour market policies remain a side note. This is a missed opportunity.

Preventing a fallout on the labour market

To strengthen the resilience of the labour market and the economy as a whole, the impact of transformative processes at the individual level cannot be disregarded: as industries adapt and business models change, skillsets too will have to be updated. Due to the twin transformation towards a green and digital economy, the relevance of traditional skills in many industries expires faster than ever before. For the transition to be socially just, re- and upskilling opportunities need to be widely available to workers in all industries.

Simultaneously, we should acknowledge that it takes skilled individuals to realise the ambitious climate targets. Clearly, a skills strategy is both a precondition to achieve the climate targets, and an important mitigation to the effect of the green transition. Still, national climate plans too often lack a skills strategy and more needs to be done to make the Social Climate Fund an effective tool to prevent a fallout on the labour market. Re-skilling workers in industries facing these fundamental transitions will be key to ensure that nobody gets left behind on our common path towards a net zero carbon economy.

Labour market cooperation is key

In our recent publication “Skills for the Green Economy” we present holistic recommendations for all labour market actors to help safeguard a sustainable transition towards a greener, more circular economy. At the Adecco Group, we believe cooperation on the labour market is key to fostering resilience and social justice. We engage social partners and labour market experts to help shape our vision of a New Social Contract that realises the expectations and responsibilities of all stakeholders to ensure we make the future work for everyone.