Employment and Sustainable Development The Role of Local

Transcription

Employment and Sustainable Development
The Role of Local Environmental Initiatives in
Job Creation
EF/00/13/EN
EUROPEAN FOUNDATION
for the Improvement of Living and Working Conditions
Employment and Sustainable Development
The Role of Local Environmental Initiatives in
Job Creation
Richard Tapper
Romy Shovelton
EUROPEAN FOUNDATION
for the Improvement of Living and Working Conditions
Wyattville Road, Loughlinstown, Co. Dublin, Ireland. Tel. (+353) 1 204 3100 Fax (+353) 1 282 6456 E-mail: [email protected]
The European Foundation for the Improvement of Living and Working Conditions is an autonomous body of the
European Union, created to assist the formulation of future policy on social and work-related matters. Further
information can be found at the Foundation’s website at http://www.eurofound.ie/
This report is based on papers presented at ‘Eco-Renovation - Jobs and the Environment’ - a conference held in
Copenhagen in September 1995, and on research by Romy Shovelton available in the European Foundation for
Living and Working Conditions’ report: Employment and Sustainability - Review and Analysis of Local
Initiatives from Eco-Renovation Workshop, Copenhagen. This report was submitted in November 1997.
Richard Tapper – Director
Environment, Business & Development Group
16, Glenville Road, Kingston upon Thames, KT2 6DD, U.K..
Tel/Fax: +44 181 549 1988. E-mail: [email protected]
Richard Tapper’s work focuses on the analysis, communication and advancement of environment and
development policies and their integration with other policy areas. He is a highly experienced director of
interdisciplinary research partnerships involving partners in North and South.
Former Head of Industry Policy for a major international NGO, Richard sits on Editorial Boards for Business
Strategy and the Environment, and for Local Environment, a new international journal of sustainable
development. He is a specialist in community economic development and role of business in sustainable
development. He has extensive experience in working with government officials, international agencies, NGOs
and leading companies.
Recent work by the Environment, Business and Development Group includes research into community-based
tourism enterprise development, commissioned for the UN Department for Policy Coordination and Sustainable
Development, and direction of a North-South research project on fair trade in tourism involving partners in the
UK, West Africa, India, and The Philippines.
Romy Shovelton - Director, Wikima Consulting
23, Leamington Road Villas, London W11 1HS, U.K.
Tel/Fax: +44 171 229 7320. E-mail: [email protected]
Romy Shovelton has over 20 years international business experience with multinational corporate clients,
governmental and non-governmental organisations in the UK, US, Australia and Latin America. From an initial
focus on strategic planning, marketing and advertising, the past ten years have been directed to action on
corporate responsibility, the environment and active participation for appropriate community and organisational
development.
Romy is a member of a number of UK and international networks active in these concerns. In the UK, she has
been particularly associated with Business in the Community and its sister organisation The Prince of Wales
Business Leaders Forum. A range of national and international organisations consult Romy on issues of
environment and employment (including the European Commission (DGV and DGXI); International Institute for
Sustainable Development; International Labour Organisation; Guildhall University; School of Advanced Urban
Studies; and the European Foundation for Living and Working Conditions), and she has published a number of
major reports on the subject.
Romy has specific experience in working with diverse stakeholder groups, and facilitating whole-systems, largegroup events for organisations and public participation. She also teaches a wide range of participation
techniques.
Contents
1. INTRODUCTION............................................................................................................... 1
1.1 'Framework factors' that encourage or inhibit eco-renovation projects........................... 2
1.1.1 Integration and a 'systems' approach - one agency, multiple objectives.................. 2
1.1.2 Community participation in designing eco-renovation programmes ........................ 3
1.2 Financing and Eco-tax reform (ETR) ............................................................................ 3
1.2.1 Financing Eco-Renovation..................................................................................... 3
1.2.2 Eco-tax reform (ETR)............................................................................................. 4
1.3 Organisational Design.................................................................................................. 5
1.3.1 An action-oriented approach.................................................................................. 6
1.3.2 Appropriate staffing and skills are critical ............................................................... 6
1.3.3 Accountability without sacrificing effectiveness....................................................... 6
1.3.4 Fitting the form to the function - flexibility answers complexity ................................ 7
2. ONTARIO’S GREEN COMMUNITIES INITIATIVE ............................................................. 8
2.1 Introduction.................................................................................................................. 8
2.2 The nature of the Green Communities Initiative............................................................ 9
2.3 Organisational Design.................................................................................................. 9
2.3.1 GCI Structure and management ............................................................................ 9
2.3.2 Community-based promotions & ‘Social Marketing’.............................................. 10
2.3.3 Partners in the GCI.............................................................................................. 11
2.4 Financing Arrangements ............................................................................................ 11
2.4.1 Community groups create their own programmes ................................................ 12
2.5 The Green Communities Initiative - The results .......................................................... 13
2.5.1 Public sector and household savings ................................................................... 14
2.5.2 Boosting green industry ....................................................................................... 15
2.6 Influence of the political, social and economic contexts .............................................. 15
2.6.1 The reality of political bargaining and changes in power....................................... 16
3. ECO-RENOVATION IN BERLIN - AN INTEGRATED APPROACH .................................. 17
3.1 Introduction................................................................................................................ 17
3.1.1 Seeking innovative ways of producing new jobs................................................... 17
3.1.2 The role of government in Berlin’s ÖSP and EIP Programmes ............................. 18
3.2 Financing Arrangements ............................................................................................ 18
3.3 Berlin’s eco-renovation programmes .......................................................................... 20
3.3.1 The Environmental Improvement Programme (EIP) ............................................. 20
3.3.2 Meeting the needs of SMEs - the ‘service company’approach ............................. 22
3.3.3 Bulk commissioning of clean technologies ........................................................... 24
3.4 The Ecological Rehabilitation Programme (ÖSP) ....................................................... 26
4. IMPROVING THE ENVIRONMENT AND PROMOTING EMPLOYMENT IN DENMARK .. 28
4.1 Introduction................................................................................................................ 28
4.2 Promoting the 'greening of industry' & 'green industry' ................................................ 29
4.2.1 Employment projections....................................................................................... 29
4.2.2 Net employment effects ....................................................................................... 30
4.2.3 Some new models of financing ............................................................................ 30
4.2.4 Reduced expenses for unemployment benefits .................................................... 30
4.2.5 Environmental taxes ............................................................................................ 30
5. CONCLUSIONS.............................................................................................................. 32
5.1 Key Lessons .............................................................................................................. 32
5.2 Preparing for a new agenda ....................................................................................... 33
6. REFERENCES................................................................................................................ 34
INTRODUCTION
“Eco-renovation" refers to an integrated approach to community revival. Eco-renovation
projects embrace both the natural and the human dimensions of sustainable development at
the local level, and through this generate improvements in the quality of the physical, social
and economic fabric of communities.
This report examines three key programmes that demonstrate practical initiatives for ecorenovation designed with the twin objectives of creating jobs and improving the environment.
These were presented at a conference on ‘Eco-Renovation - Jobs and the Environment’ held
in Copenhagen in September 1995, and were developed to successfully meet these twin
objectives through a focus primarily on home renovation - involving action on energy, waste
and water - and on industrial greening - providing support for environmental improvements in
small and medium-size enterprises (SMEs).
The three programmes discussed here are:
1) The Ontario Green Communities Movement
2) The Environmental Improvement Programme (EIP), and Ecological Rehabilitation
Programme (ÖSP) in Berlin
3) Strategy recommendations for Eco-renovation in Denmark.
Using lessons from these three programmes, the report assesses how similar action can be
replicated more widely, and those framework factors that can either inhibit or encourage local
eco-renovation initiatives.
The analysis of the Ontario and Berlin initiatives includes a focus on some of the
organisational and contextual aspects of putting effective eco-renovation programmes into
practice. The Danish example deals with a macro-level approach to the establishment of
regulatory, financial and fiscal measures which provide a supportive framework for the
development and spread of eco-renovation initiatives.
All three examples point to the substantial economic benefits that accrue from eco-renovation,
as well as highlighting the ways in which financial packages have been assembled to enable
specific initiatives. They also stress the importance of creating partnerships between various
levels of government, social partners and environmental organisations in order to deliver
successful eco-renovation programmes.
In particular, these examples demonstrate that the social and economic revival of communities
is best supported by:
a) Recognising and understanding the values and perceptions of the various groups of
people within a community, and by including their ways of perceiving and prioritising
issues when planning and implementing eco-renovation programmes;
b) Initiatives that are driven from the bottom up with special efforts to involve the socially
excluded; and by government institutions providing a framework to catalyse and support
change from the bottom up;
c) Actively developing innovative examples of action to achieve the twin objectives of job
creation and environmental improvement; and by evaluating and learning from successful
eco-renovation programmes;
© European Foundation for the Improvement of Living and Working Conditions, 2000
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d) Designing programmes to work flexibly with the real problems of specific regions rather
than transplanting standard “good practice”: since the mix of economic, social and
environmental problems may differ significantly between regions, it is vital that such
differences can be taken into account during implementation;
e) Acknowledging that action does not have to wait for macro-level changes - there is
undoubtedly enormous potential for job-generating eco-renovation projects even within
most existing policy frameworks.
1.1 ‘Framework factors' that encourage or inhibit eco-renovation projects
External framework factors provide the context that can promote or hinder eco-renovation
initiatives. Internal factors relating to initiative design and implementation are equally
important, and can help to mitigate an unsupportive external context. Two internal factors of
particular value concern the conscious integration of multiple objectives, and the nature of the
organisational structure set up to implement eco-renovation initiatives.
Successful initiatives themselves clearly have the potential to influence the development of a
supportive policy environment.
1.1.1 Integration and a 'systems' approach - one agency, multiple objectives
Consciously integrated programmes using a ‘whole systems’ approach, have proved
particularly powerful in achieving multiple environmental, economic and social objectives,
and in maximising the return-on-investment in local development.
As the case studies demonstrate, an effective integrated approach actively seeks out and
builds on synergies between objectives in a way that is not possible using a traditional multiagency approach with separate single objectives for each agency. Integration reduces overlaps
and potential conflicts that often arise between separate agencies, and frequently opens up
new approaches to handling difficult issues. In Ontario, one practical example of an integrated
approach to energy saving and waste reduction is summed up as "let's train our energyretrofitters not to throw out so much waste". There are also naturally efficiency gains from
integration - for example in providing single advice points and support packages for clients.
At the household level, integrated objectives can also help to market eco-renovation
programmes. For example, the Green Communities Initiative in Ontario has found that
dealing with household hazardous waste is a sensitive issue for families, but linking it to
indoor air quality improvement makes it easier to discuss. Likewise, composting as a waste
reduction measure looks dirty and inconvenient, but as lawn and garden soil it is very popular;
rainbarrels to reduce sewer run-off sound costly and questionable, but as a source of clean
water for gardens they get the public seal of approval.
A 'systems' approach is familiar territory in the business world. Some figures in public sector
policy development are now drawing lessons from systems management, and also from the
way that many communities naturally establish and run their own activities and informal
structures. A key characteristic of such approaches is a high degree of communication and
participation.
Peter Haupt, State Secretary of the Berlin Senate's Department for Labour and Women, notes
"The ecological reconstruction of the industrial society presupposes an intensive degree of
communication and cooperation. It calls for regular, integrated actions and procedures with
which ecological, structural, political and ...... also labour market policy aims can be
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achieved." In Berlin and Ontario’s Green Communities, communication and cooperation are
the basis of day-to-day functioning of eco-renovation initiatives.
1.1.2 Community participation in designing eco-renovation programmes
A critical part of achieving success with eco-renovation initiatives, is paying conscious
attention to the human 'process' side of any action or initiative. Technically sophisticated
solutions can come badly unstuck if the right people are not catered for and involved in the
right way. Strong neighbourhoods and communities one of the best ways for making sure that
solutions and technology are developed that meet the actual needs of those people they are
intended to help, rather than the perceptions that programme planners have of those needs.
Participation of the intended beneficiaries in the design of programmes targeted at meeting
their needs is therefore an important part of the process for developing eco-renovation
initiatives. Their perspectives form the fundamental basis from which programmes can then
be built. Initiatives based on cosmetic consultation exercises generally lack sufficient
grounding in local perspectives, and as a result are far less effective and enduring than ecorenovation initiatives founded on participative processes.
1.2 Financing and Eco-tax reform (ETR)
1.2.1 Financing Eco-Renovation
The eco-renovation initiatives analysed in this report have been financed from a wide range of
sources: local, regional/state, and national government, the European Union, the private
sector, and programme beneficiaries themselves. Government funding from some or several
levels of government is generally an important basis for getting projects off the ground. There
can be a variety of justifications for such public funding: for example, by creating jobs ecorenovation programmes may reduce social welfare expenditures; by increasing energy and
resource efficiency and reducing wastage, they can reduce imports; and by boosting the local
economy, they increase overall government revenues as well. In Europe, the European Union
has provided funds for eco-renovation programmes through the European Regional
Development Fund, which supports part of Berlin’s programme, for example.
Local businesses, and particularly energy and water utilities, have also proved useful sources
of funding, or at least of support in-kind. Investment in water and energy conservation can
reduce or eliminate the need for major capital investment by utilities to meet demand that
would otherwise rise. Local businesses including utilities, also gain from the general boost to
the local economy that eco-renovation initiatives provide.
Finally, funding comes from the investment in environmental improvement measures made
by clients - households and businesses - themselves. They benefit from reduced bills for
energy and other resources, and from the rapid pay-backs that their investments in ecorenovation measures achieve.
Given the diverse range of possible funding sources, brokerage and/or advocacy between
projects and funding sources is an important way to strengthen the provision of finance,
especially to smaller projects. It is also critical for those operating eco-renovation
programmes to have a realistic and detailed understanding of the financing needs of different
types of projects.
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Special measures can also be adopted to ensure that sources of finance do not discriminate
against some types of customer. For example, the US Home Mortgage Disclosure Act
requires financial institutions to publicly list the location of their loans: this public
accountability is an important tool in preventing the 'red-lining' of areas with economic
problems.
Financing arrangements for eco-renovation schemes
Appropriate financing arrangements for eco-renovation include:
• community enterprise lending
• credit unions that promote local economic development
• discount cards giving discounts and credit against a list of eligible products/services
• green/ethical funds and pension funds
• incubator development subsidies to support new eco-renovation enterprises and projects
• LETS (Local Exchange Trading Schemes) and cooperatives
• loan funds
• loan guarantees
• micro-enterprise loans
• tax breaks for companies that invest in/mentor SMEs
• trust funds
In addition to identifying potential funding sources, there is a job to do in helping the funds
to reach the right people.
1.2.2 Eco-tax reform (ETR)
ETR has a natural role to play in the link between environmental and employment
improvements. This report does not offer a detailed analysis of the value of ETR - a subject
about which much has been written elsewhere. However, it is important to note that
introduction of ETR is a question of both political will and of designing environmental taxes
that are fully integrated with other socio-economic objectives. Other success factors have
been identified as:
• designing ETR to be 'revenue neutral' rather than using it as a means of increasing
government revenues;
• introducing ETR changes gradually in order to minimise disruption to businesses and the
economy as a whole - for example, by being phased-in over 10 or 15 years;
• paying special attention to ensuring that environmental taxes do not penalise vulnerable
individuals or businesses: for example, low income families or SMEs.
Eco-Tax Reform: Rationale
ETR is often described as moving the tax burden from taxes on social ‘goods’ to taxes on
environmental ‘bads’. Economists estimate that at least 5% of GDP in industrialised
countries is spent on cleaning up some of the damage caused by pollution and the adverse
environmental effects of economic activity. Pollution and other environmental ‘bads’ cost
money, paid for example, through increased health care costs and time lost at work through
pollution-related illnesses; through expenditure to restore damage to buildings; or through
losses from the reduction in productivity of natural and managed ecosystems.
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In the past 30 years to 1990 the percentage of taxes on people (social ‘goods’) rose from
28% to 50% while taxes on environmental ‘bads’ stayed at 7% to 9%. Taking account of the
real costs of environmental damage through full-cost accounting and internalisation of
'externalities', has been on the environmental agenda for decades, with a limited impact on
macro economic policy to date. With an ETR programme, taxation is reduced on
employment and social ‘goods’, and taxes placed on environmental ‘bads’, including
environmental pollution. The overall tax take could be kept neutral with ETR, encouraging
employers to create jobs, while discouraging pollution and other environmental harm. This
in turn boosts jobs in the environmental technology sector, as firms invest in cleaner
production technologies.
Eco-Tax Reform and Small- & Medium- sized Enterprises (SMEs)
The way ETR programmes are structured has a major influence on their effectiveness in
terms of job creation - for instance in the small business sector. In a conference on “Ecorenovation: Jobs and the Environment” held in Copenhagen in September 1995, Hanne
Moltke of UEAPME (European Association of Craft, Small and Medium-sized Enterprises)
outlined problems experienced by SMEs in the way that the Danish CO2 tax was introduced:
she warned that eco-taxes do not necessarily produce job growth where the tax burden on
SMEs increases.
The Danish CO2 tax was introduced in 1992, primarily with fiscal rather than environmental
objectives, and was combined with a package of subsidies for energy-intensive industries for
improvements in energy efficiency. The net result is that many SMEs can pay at least as
much as a large steel plant in CO2 taxes. Under the new Green Tax package introduced in
1995 to cover CO2, SO2, and water use, a quarter of the tax raised is used to provide
investment incentives and three-quarters to ease taxes on employees. State subsidised
"energy trade analyses" have been introduced to help SMEs: for example, a bakery can
check its electricity bill against the sector average. There is a 50% subsidy for
commissioning consultants to conduct energy trade analyses, and the purchase of 'standard
solutions' receives a 30% subsidy.
However SMEs still lose out under this package, while energy-intensive industries continue
to receive large investment incentives for energy efficiency improvements. Although the
Green Tax package was approved by the EU, SMEs have expressed concerns that the way
this package is structured constitutes a subsidy to energy-intensive firms in breach of EU
rules. Danish SMEs are now understandably suspicious about ETR proposals. One poll of
SMEs concerning higher environmental taxes, revealed that 80% of the respondents
favoured fiscal neutrality of ETR, but that 89% did not trust the government to keep its
promises on implementation.
1.3 Organisational Design
Effective action will be prompted by understanding the thinking and situation of the 'client'
group, then designing the organisational form to fit. The programmes analysed in this report
demonstrate a number of ways in which the organisational format has been designed to
motivate and match the needs of client groups. Integration is also a crucial starting point for
creating organisational forms that will foster successful eco-renovation programmes.
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For example, the structures created for the Ontario’s Green Communities Initiative enabled
diverse initiatives that had grown up independently over the past twenty years to be knitted
together effectively. This enabled the rapid spread of many formerly 'stand-alone' green
initiatives, while maintaining their diversity at ground level.
In Berlin having job creation and environmental improvements jointly in mind from the outset
of development of the Environmental Improvement Programme (EIP), led to the creation of
entirely new organisational mechanisms, relevant to both environmental improvement and
jobs: the ‘service company’ concept and the use of the ‘secondary labour market’.
The organisational form can also be designed to protect programme participants from the
complexities of multiple programmes and objectives. In Berlin, the B&SU (Beratungs-und
Service-Gesellschaft Umwelt GmbH - Environmental Consulting and Service Company) - set
up at arms-length from the local government - acts as an intermediary to explain, market and
run the programmes in a way that clients can easily understand, and which will encourage
them to invest their own resources in environmental improvement and job creation measures.
1.3.1 An action-oriented approach
A traditional government-led approach tends to be highly structured, with the programme,
rules, criteria of eligibility, reporting requirements etc. mapped out before any practical
community or SME action has begun. This contrasts with approaches, such as adopted for the
GCI in Ontario, that build in the flexibility for guidelines to be developed as the programme
progresses - by those closest in attitudes and practice, to 'the sharp end'. In establishing and
running the GCI, most of the time the main organisers are in the field and not in an office.
They were also specifically selected as a group of activists who had experience close to their
communities. Traditional bureaucracy can find this type of operation difficult to come to
terms with.
1.3.2 Appropriate staffing and skills are critical
The right attitudes and skills of programme staff have been absolutely critical to the success
of the initiatives analysed in this report. Ontario's small Green Communities team, staffed by
activists with an understanding of community dynamics, were able to generate immediate
action and a vital 'ripple effect' of spin-off action, on a scale beyond that suggested by the size
of the team. Previous, large-scale, centrally run conservation programmes, with over 500
employees, were considered by many to have been expensive failures.
In Berlin, the programmes are run by the B&SU which was established as an organisation at
‘arm’s length’ from the government, and with staff selected to bring a range of marketing and
business skills, as well as skills at working with people. The staff of the B&SU includes
engineers, economists, technical people and managers - a mixture of skills not generally found
together in one department of the local administration.
Appropriate skills and professionalism among those who carry out environmental
refurbishment work paid for through the initiatives, is also critical: in Ontario, this is handled
via the 'approved contractor' lists generated by the Green Communities Initiative.
1.3.3 Accountability without sacrificing effectiveness
A system of checks and balances is vital to control programmes and ensure the quality of their
activities. At the same time, it is important to ensure that such a system is designed to
enhance, and to avoid hindering, the effective implementation of each programme.
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There is sometimes a concern that a degree of 'overaccounting' leads to unnecessary delay,
and that the bureaucratic burden on a system may lead to a higher than desirable proportion of
time being spent on 'internal' administration rather than on work with clients. For the
coordinator of the whole EIP programme in Berlin, approximately 50% of his time is spent on
conducting the paperwork checks required by the Berlin Senate and government funders. For
the technical and financial project coordinators, around 10/20% of their time is spent on
preparing information for the Senate.
Administrative and financing complexities can make some projects, especially smaller ones,
impractical, since a project costing a small amount can require the same paperwork as a major
project. For example, under Berlin’s Ecological Rehabilitation Programme (ÖSP) it is
virtually impossible to fund projects of less than 30,000 DM, and this rules out many
beneficial projects. Simple administrative and financial procedures are important if smallscale projects are to be supported The upfront lead times may still be substantial, in order to
ensure effective project preparation. Well-prepared projects enable smooth implementation,
and the preparation phase itself can be a vital part of establishing the social and economic
networks in a community to put project concepts into practical action.
1.3.4 Fitting the form to the function - flexibility answers complexity
A detailed understanding of client needs, has underpinned program design in both Ontario and
Berlin. A focus on the individual circumstances of clients, has, for example, been critical in
eliciting immediate and on-going responses from Ontario households.
Berlin's EIP programme is likewise highly targeted to the practical and complex needs of
SMEs. Its effectiveness can substantially be attributed to undertaking detailed research to
identify those SMEs which most need help and would otherwise be slow in applying
environmental principles, and then developing a strategic response to their needs. By being
flexible to the specific needs of individual SME clients, the programme is able to maximise
the opportunities for job creation. The need for an effective mechanism to implement this
approach led the Berlin EIP and ÖSP programmes to create and implement the innovative
'service company' concept: an intermediary company, set up at arms-length from the local
government, takes on the role of explaining, marketing and running programmes in a way that
clients can easily understand, and which will encourage them to invest their own resources in
environmental improvement and job creation measures.
Key aspects of organisation design - questions checklist
A critical design criterion for successful eco-renovation programmes is that they be
structured to maximise community linkages and ownership. While the exact structure will
tend to be community-specific, the following questions can be considered in all ecorenovation programmes. Asking “how does this answer maximise community linkages and
ownership?” after each of these questions will undoubtedly help build a workable and
effective programme and structure for eco-renovation.
These questions are:
• in what ways is the programme action-oriented and flexible, geared to the many
different circumstances that exist in a country or city ?
• how is accountability built into the programme, without getting tangled up with over© European Foundation for the Improvement of Living and Working Conditions, 2000
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elaborate codes, rules, reporting procedures, etc.?
who is running the programme ?
what is their relationship to the main bureaucracy ?
what kind of skills are necessary to do developmental work of this kind?
what is their relationship to those in civil society who have got to do the work or pay
money - householders or firms ?
does the programme encourage a sense of ownership?
in which ways can the intended beneficiaries of programmes (eg. communities and
SMEs) be drawn into shaping the programmes they are going to be carrying through ?
how can a relevant tender process be organised - to enable the maximum number of
SMEs and communities to participate ?
how can the integration of objectives (such as environment and employment) be
achieved without the potential negative effects of complexity?
2. ONTARIO’S GREEN COMMUNITIES INITIATIVE
2.1 Introduction
The years 1989-1995 in Ontario were an extraordinary time, as the Canada/US Free Trade
Agreement plus a new National Sales Tax turned a recession into a near-depression. There
were 1.3 million people on welfare in Toronto; real interest rates of over 10% produced a
housing market collapse; and provincial government deficits peaked at $12 billion annually.
At the same time, Ontario Hydro, a key partner for the newly planned Green Communities
Initiative, was described as "in near fiscal meltdown", precipitated by building a new $14
billion nuclear station.
The recession was biting hard, jobs were needed, and green industry and the greening of
industries offered an opportunity. The municipalities were faced with huge capital bills for
water and sewerage infrastructure and had no effective conservation programmes to help: they
were persuaded that "conservation capital" offered a cheaper, faster solution to the
infrastructure problem and offered more jobs than other options.
In response to these problems, a massive new jobsOntarioCAPITAL programme, with a
central capital investment fund, was unveiled to fund infrastructure programmes. It was
generally hoped that this would create immediate construction jobs, as well as establishing a
foundation for future economic growth. Green Communities staff successfully made the
argument that "conservation capital" was more cost-effective, more knowledge-intensive,
faster and more labour-intensive than traditional "bricks and mortar" infrastructure
development. "Conservation capital" meant not just the 6-liter toilets and high-efficiency
furnaces households retrofitted - but, more importantly, the information systems, trained
assessors, marketing campaigns, and the human, organisational, social infrastructure required
to "wire" together such results. This has been termed 'smart' investment, in contrast to
traditional investment in capital infrastructure. The Treasury accepted the conservation capital
arguments, which were increasingly common at utility regulatory hearings, and the full-scale
programme was launched.
The Green Communities Initiative (GCI) and the Green Industrial Analysis and Retrofit
initiative (GIAR) were initially born out of an inter-Ministerial "Green Jobs" programme, as
initiatives of the Ministry of Environment and Energy and jobsOntarioCAPITAL. With an
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investment of $41.8 million over three years, "Green Jobs" was intended to preserve existing
jobs and generate new ones.
Keith Collins, Founder and Team Leader of the GCI, notes: "That the Green Communities
Movement could not only be born in such a time, but could thrive, gaining political and public
support from across the spectrum raises powerful questions about innovation in times of
constraint and collapse. When everyone else is paralysed, you can often move swiftly around
and ahead of them. In a nutshell in Ontario, all the previous 'green' talking had lead to
precious little 'green' action.”
2.2 The nature of the Green Communities Initiative
The Green Communities Initiative (GCI) began life with one central programme - to carry out
eco-renovations in homes. Known as housing 'retrofits' in Canada, the "Home Green-Ups" are
operated through local community partnerships. Through focusing on the community itself as
the lead partner, the GCI has generated vast amounts of spin-off activity with exceptional
economic and environmental benefits. The Home Green-Ups programme was expected to
create more than 10,000 direct/indirect jobs, and 15,000 spin-off jobs.
The GCI has also supported small firms in improving their environmental performance. The
Green Industrial Analysis and Retrofit initiative (GIAR) has undertaken a similar role in large
firms, and while not community-based, has prompted many firms to become strong
environmental advocates in the Green Communities.
The two initiatives now form the Green Communities Movement (GCM) and have expanded
from the pilot communities and companies to more than a dozen programmes throughout
Ontario.
The Ontario Green Communities Initiative (GCI), and its sister programme the Green
Industrial Analysis and Retrofit initiative (GIAR) were expressly designed to achieve a
combination of environmental, social and economic objectives. Integration of these objectives
is one of the key messages for a sustainable development perspective. The economic
imperatives of responding to a prolonged recession, led the Province to place a particularly
strong emphasis on a range of economic objectives, and the initiatives formed an integral part
of the Province's Green Industry Strategy to build green markets for Ontario companies.
The multiple aims of the GCI are:
• To improve the environment through resource efficiency and pollution prevention;
• To renew the economy through local job creation, stimulating new green industry, and
achieving infrastructure savings; and
• To empower communities through enhancing local networks/information exchange, and
fostering local leadership.
2.3 Organisational Design
2.3.1 GCI Structure and management
The Ontario GCI model integrates a whole range of previously fragmented initiatives, and
brings together an extremely broad range of partners. This is achieved by forming each Green
Community (GC), into a new non-profit corporation, with a Board composed of individuals
from the partner organisations, plus volunteers. The Board hires and fires staff, has
9
responsibility for budgets and accounting, and for the detailed design and delivery of
programs.
Integration of a number of activities into a unified programme allows more overall action to
be generated, while integration of different organisations allows partner skills to be balanced.
The result is greater cost-effectiveness. Seeing such results, even the three Ministries which
jointly funded the first year of the Ontario GCI, began to follow the integration trend - energy
and environment were merged into the Ministry of Environment and Energy (MOEE). A
group of seven key staff was set up within the MOEE (the "Green Team") to work with other
Ministries, partner organizations and the GCs directly. This group provided support within the
government structure to develop, fund, and deliver most of the GC initiative.
At the Provincial level, there was originally a coordinating committee consisting of three
Ministries: this was ultimately absorbed within the Ministry of Environment and Energy's
Community Conservation Branch.
The integrated delivery approach of Ontario's GCI is the closest thing yet to putting the
concept of creating a Community Conservation Utility into practice - a concept much
discussed in the Ontario Green Communities Movement. This new type of organisation is
intended to be able to deliver dozens of different environment initiatives, pooling expertise
and resources, and being flexible and fast-moving - providing a highly cost-effective one-stop
center that is the green nerve center for all citizens.
2.3.2 Community-based promotions & ‘Social Marketing’
"Social marketing" is the overall term used in Ontario to cover an action-promoting approach
which begins by gaining an understanding of where people actually are, in terms of their
attitudes, circumstances and priorities, rather than where programme organisers might hope
they would be.0
The social marketing approach has meant, for example, that the GCI has focused on
community- and household-level promotions and communications designed to reach people
on their terms, and recognising that they may well have real problems of high bills, bad
indoor air quality (eg. from moulds, dust, toxins etc), concerns and desires about their local
environment, and so on, as well as a sense community spirit or identity.
Assessors undertaking GHVs have received training in these aspects of community and
household relations, as well as technical training. This has included giving assessors skills in
how to deal with illiteracy, understanding household and community economics, in the
motivation of longer-term change in addition to immediate action.
Whereas most Canadian utility-based conservation programs came with massive promotional
budgets, and major cash incentives for households (up to $15,000 each) the GCs had minute
promotional budgets by comparison. Nonetheless, by use of the social marketing approach,
the GCs achieved an average investment of $1,500 made by each household to install the
measures recommended in a Home Green-Up, over the following year.
The GCI now combines traditional tools such as newspaper ads, utility bill inserts, mailing
lists, retail outlets, newsletters, staff paycheques/email and displays, with more personal faceto-face approaches such as member meetings and the more public "green tent events" in local
parks, community fairs, neighbourhood "blitzes" and school-based activities.
10
2.3.3 Partners in the GCI
The range of partners involved in the Ontario initiatives is particular broad: provincial
government; a range of municipal/city departments; Ontario Hydro; service clubs; labour; gas
utility; local business; schools; community groups; financial institutions; environmental
groups. These partners constitute a community "team" which together addresses the needs of
the target group - households, small businesses, parks, schools etc. Within these teams, the
primary partners can be considered the provincial government, the green/community activists
and the utilities.
The GCI insisted from the start on a "can-do," positive, "common ground" approach as a core
principle. It was essential to have all participants recognise that this forum was not the right
one for confrontation or fighting pitched battles. Individuals and organisations with this
priority were simply asked to leave.
At the community level, over 75% of the initial GC mobilisation came from ‘green activists’.
They led the strategic planning, identified key supportive personnel within other organisations
(local utilities, local governments, labour organisations, business, etc.), drove the conceptual
development, and then were critical to its delivery - signing up thousands of households,
enabling new technologies to be tested, garnering funding, and offering the programme a
mantle of credibility even when otherwise non-green partners were involved. Green activists
organised as consulting firms were the critical delivery agents for assessor training, product
evaluation, marketing campaigns, etc.
Other partners based in the non-governmental community include:
• The Roundtables in communities such as Guelph;
• The Canadian Auto Workers - in Windsor;
• The Carpenters Union in Ontario - provides excellent programmes to prepare people for
quality retrofit work; and
• "The Web" - a non-profit home of electronic communications in Ontario, which has
worked to wire together activists inside the bureaucracy, in the GCs, and abroad.
The Canada Trust Bank also played an important role in supporting the GCI by creating the
EnviroLoan. This was backed up by a brochure that drew businesses into the GCI process, as
well as offering households the means to participate in the GCI programme and make
investments recommended through Home Green Ups. The bank also found that GCs offered a
great way for them to contact new clients, and for their managers, and especially women
managers, to network with established and emerging community groups and businesses.
2.4 Financing Arrangements
The GCI is financed from a range of sources, with funding from the Provincial Government
matched by cash or in-kind contributions from the Green Communities partners.
The main sources of finance for the GCI are:
a) Provincial Funding (regional government):
In the first year, the GCI received pooled programme funding came from the three Provincial
ministries of Energy (energy efficiency office), Environment (waste reduction office), and
Natural Resources (water efficiency office). In later years, infrastructure funding from the
jobsOntarioCAPITAL, a capital investment fund set up by the Provincial Government,
underpinned the GCI.
11
For the Ontario Home Green Ups, the Ministry of Environment and Energy provides financial
assistance covering up to 50% of eligible costs. The maximum annual contribution to any one
Green Community will depend on the level of activity proposed, but will not exceed
$750,000. The GCs must therefore secure at least 50% of the total project cost in cash and/or
in kind.
b) Funding from local government and utilities:
Individual Green Communities have also received support and funding from strong local
partners, such as a local electrical utility, provincial gas utility, or municipal government.
c) Community Funding:
The GCI has been particularly effective at generating investment by householders themselves.
Much of this is die to ‘social marketing’
2.4.1 Community groups create their own programmes
The GCI’s funding procedures have been designed to help community groups to create their
own GC programmes, and tailor them to their own local circumstances. The procedures are
based on a two-tier bidding and tendering process. At the first stage, GC groups may bid for
seed funds to prepare their main bid. If they are successful in the first round, the GCI office in
Toronto has extension workers trained to advise GC groups and resolve conflicts between
community groups as they work up the full tender bid. In practice, most of those who bid for
seed funds, succeed in obtaining full funding for proposals developed to the second stage.
The structure of the bidding and tendering process specifically encourages communities to
develop bespoke programmes. In establishing these programmes, the community groups must
secure broad-based community support and put in place a structure for accountability. A plan
and budget must follow from a planning exercise which identifies priority issues and key
opportunities; targets for environmental improvement (energy, water and waste); and
economic, environmental and social/community benefits.
Green Home Visits and Job Creation
Ontario’s Green Communities found that the most successful use of available finance is on
'soft' services such as visiting householders. While approximately $28 million in cash came
into the Green Communities from all sources, only about 50% of this was actually spent
directly on Green Home Visits (GHVs), even though they were the primary driver of job
creation.
From the core $14 million input into the GHVs, around 3000 person-years (PY) of
direct/indirect employment, and a further 5000 PY from the multiplier effect, were created in
its initial phase. Another 8,000 PY of employment are predicted to come from the continuing
re-spending effect over the next 15 years, giving a grand total of 16,000 PY of employment.
The re-spending effect comes from savings on utility bills that have amounted to $150
annually per participating household: this translates into 210 direct jobs plus another 315
jobs through the multiplier effect annually - generating 7875 PY over 15 years, in the
absence of any further GC support. The GHVs therefore represent a highly cost-effective
mechanism for job creation.
12
Costs per job created are:
$1750 per PY created in the initial phase
($14m/8,000 PY)
$ 875 per PY created in the initial phase and through re-spending ($14m/16,000 PY)
As almost all the funding was also redirected from previously existing government programs
(both operating and capital), this makes the GHVs an extremely economic and potent form
of expenditure.
Over 90% of all programme jobs go to people in the local community. As unemployment
rates are exceptionally high among tradespeople and contractors, the jobs in home
renovations have been particularly welcome. The Green Home Visits (GHVs) themselves are
a considerable source of good quality direct employment. These jobs are permanent and fulltime, other than in those cases where special working hours/weeks are chosen. Around 50%
of direct jobs have gone to women, and over 50% of the most senior GC positions are held
by women.
2.5 The Green Communities Initiative - The results
Employment, Economic, Community and Environmental Results delivered by
Ontario's GCI and GIAR (1993-1995)
Employment results:
• Generated around 3000 person-years (PY) of direct/indirect employment in its initial
phase, plus 5000 PY from the multiplier effect, and another 8,000 PY expected over the
following 15 years - giving a grand total of 16,000 PY.
Economic results:
• Saved households million of dollars in utility bills ("as good as a tax cut"), in the
communities which performed the first 70,000 Home Green-Ups;
• Triggered an average household investment (on local products and services) of $1500
(each spending between $100 and $3,500);
• Created more tax revenues for government than are given in funding: an estimated $160
million in revenue to the various levels of government, versus a cash injection from all
partners of only $28 million - a return of around 6:1.
• Reduced capital infrastructure and social assistance spending significantly: social
assistance savings of $40 million are expected from the 8,000 direct, indirect and
multiplier jobs, while the impact of infrastructure savings is estimated at $100 million one community saved over $8 million in avoided sewer/water investment in their first
year;
• Boosted markets for domestic green industry suppliers and cut energy imports: gas and
electricity imports into Ontario will be cut by $7.5 million annually from action so far.
Community Results:
• Available to over 6 million people in less than 3 years in 19 cities and regions, from
towns of 3,000 to the largest cities;
• The GCI and GIAR have received heavy, almost unanimously glowing local press
treatment.
13
Environmental Results:
• Green Home Visits are achieving a 65% take-up of recommended energy, water and
waste reducing measures, resulting in measured resource savings of between 10% and
25%;
• Green Communities have also initiated Canada's largest-ever solar domestic hot water,
water conservation and treeplanting projects, and hundreds of innovative environmental
actions
2.5.1 Public sector and household savings
When launched, the Ontario GCI programme, costing $41.8 million, was expected to pay for
itself ten fold, purely from increased tax revenues (on spending and employment) and savings
on infrastructure and social assistance. By the third year, the GCs were achieving this 10:1
target.
A number of factors have enabled the GCI to deliver this remarkable achievement:
(a) The GCs success in convincing households to use their savings or draw on loans to make
new home investments;
(b) The GCI being a very cost-effective way to deliver previous programme components, and
to integrate them into a new customer-focused vehicle;
(c) The GCI's achievements in import substitution through driving out imported fuels;
(d) The heavy emphasis on direct connections with Ontario-based suppliers of the necessary
renovation goods and services;
(e) The job-creation opportunities that derive from managing to keep local taxes and rates
low, thanks to the additional tax income generated by the initiative itself.
The major boost to Ontario’s economy that the GCI provides is made up of four main
components:
• Infrastructure savings
Estimated savings of around $100 million have been made on infrastructure capital costs, for
example, by lowering the pressure on water and sewerage treatment and on energy
transmission, the need to upgrade local infrastructure has been reduced. Operating costs are
also down, and plant efficiency up. The Barrie GC alone has saved that City over $13 million
in its first year by deferring sewer/water expansions.
• Import savings
The majority of homes in Ontario are heated by imported natural gas, and 85% of natural gas
revenues leave the Province. Installing energy efficiency measures as part of home
renovations reduces energy use and reduces spending on imported gas. At the community
level, this means that overall $10.5 million is now retained within the local economy as a
result of reduced energy expenditures on gas and electricity.
14
• Reduced social expenditure and increased tax income
The public purse also stands to benefit directly from reduced unemployment/welfare
expenditure, as well as from reduced health costs (eg. on asthma as household warmth and air
quality are improved), and from reduced environmental degradation (less smog, beach
pollution, acid rain etc). On the revenue side, sales, corporate and personal taxes increase as
do municipal property taxes, which rise to take into account home improvements.
From the actions instituted in the first 3 years of the GCI, social assistance was reduced by
$40 million, while tax revenues increased by around $160 million on the renovations,
employment and the spending of retained savings locally. Furthermore, each person employed
in carrying out the upgrades can be expected to contribute 40% of their salaries back into
government 'coffers' through the tax system.
• Household savings
Individual households undertaking retrofits benefit from savings in utility bills as a result of
improved environmental performance. These savings are the equivalent of a tax cut of $100$500 per year, depending on the household and level of investment in retrofits. These savings
are respent predominantly in the local economy, and create a further long-term boost to
creating and maintaining jobs locally.
2.5.2 Boosting green industry
In Ontario, companies producing goods and services relevant to upgraded environmental
performance stand to gain from the GCI, as do SMEs which 'green' themselves.
The average investment per household following a GHV was $1500 for an 18-month period
in 1993-95, during which 70,000 GHVs were completed. This translates into a $105 million
boost to local green industry. The GCI also aims to strengthen domestic green industry
suppliers as well as their ability to 'export' beyond the local market.
2.6 Influence of the political, social and economic contexts
Obstacles to success identified in the Green Communities Initiative
According to Keith Collins, Founder and Team Leader of the GCI, "Without question the
single most significant set of obstacles to the success of the GCI were those within the
Provincial bureaucracy itself. They did not like the facts that:
- it allowed such "lee-way" in their system;
- it placed trust in local communities to resolve problems and take initiative;
- it required co-operation across ministerial boundaries;
- it clashed with the extensive ties to private engineering and resource supply firms who
stood to benefit from continued, expensive supply-side expansions;
- it required redefinition of "capital" beyond bricks and mortar;
- it proposed that "greening" might make economic sense;
- it got funded, was popular, and showed results.
15
They attempted to delay it at every turn; they deliberately scuttled presentations when they
were forced to "own" the program; they refused to submit proposals for additional funding
even with guarantees from the politicians that they would be approved; they stuck
undesirable staff on the program to sabotage it; and eventually they set it up for cuts by the
new Conservative government."
“Other opposition was less severe, and more easily overcome. It included:
• A small number of anti-environmental municipal officials and councillors in GCI cities.
• Some individuals whose work was tightly linked to supply-side expansions, including
sewer/water engineers and associated works department officials; some employees of a
gas utility and of Ontario Hydro.
• Some green activists who could not see that the GCI was not to become a centre for
confrontation. They harangued corporate officials and government representatives, and
eventually had to be restrained and removed by other members of the environmental
community.”
2.6.1 The reality of political bargaining and changes in power
The strong leadership of one young Deputy Minister in the new progressive provincial
government (the New Democratic Party), was absolutely critical to the Green Communities
Initiative being set up, in the face of severe opposition from traditionalists in the bureaucracy.
The Provincial Government played the lead role in the establishment of the GCI, and provided
the programme impetus, concept development, 50% funding, field staff, training,
organisational support, software, negotiated partnerships, and more.
In June 1995, the Government changed from New Democrat to Conservative, and in
December 1995, eliminated all funding support for the GCI, despite the protests of the
Environment Minister (a former GC Board member), who herself was ultimately dropped
from Cabinet. But today, in Ontario, despite the severe financial cuts imposed on the
programme, the Green Communities Movement continues to be endorsed by two of Ontario's
three major political parties, and has spread its influence to British Columbia and Alberta, as
well as the US West Coast and Midwest. All but 3 or 4 of the GCs have survived the complete
loss of Provincial funding.
One of the responses of the GCM to politically-motivated government cutbacks has been to
convert the GCNetwork, which was formed in 1995, into GCInc. GCNetwork had been a
voluntary association of the various Green Communities, formed to try and increase
communication and cultivate new partnerships. The network had produced a 1-page weekly
newsletter; organised conferences, workshops, and meetings; mobilised lobbying efforts; and
directed an on-line conference and e-mail system on the "Web" electronic network.
However the organisational form of the GCNetwork was later found to be too weak, and a
stronger and more-businesslike GCInc. was established in January 1996, with a mandate to
negotiate new partnership and supplier deals, to create promotional packages, to perform joint
buys, and to develop further initiatives of benefit to GCs.
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3. ECO-RENOVATION IN BERLIN - AN INTEGRATED APPROACH
3.1 Introduction
"When the Wall came down, everyone looked to West Berlin. Big plants shut down. 160,000
industrial jobs were lost in 15 months. The Academy for Science in East Berlin had 32,000
employees: 18,000 stayed in Berlin, and 70% of them were academics. What work was there
for them all ? Berlin had everything in duplicate. The western system was internationally
interwoven, with the international exchange of information and labour, but the GDR was a
think-tank system, with hardly any information exchange and almost no division of labour.”
So Dr. Ditha Brickwell, Head of Senate Department of Urban Development & Environmental
Protection describes the circumstances leading to the establishment of Berlin’s eco-renovation
programme.
In response to the economic and social crisis, the Berlin Senate considered that there were two
options. The first was to leave the people to cope on their own, and for them to somehow
search for jobs elsewhere. This was considered unacceptable. The second option was to
change people's qualifications to fit the current labour market.
Berlin now has two key programmes which are consciously directed at integrating job
creation and economic development with environmental improvement - one programme
primarily aimed at improving the environmental performance and competitiveness of SMEs
(with accompanying positive impacts on the economy and jobs), and the other focused on job
creation through environmental initiatives involving an intermediary or 'secondary' labour
market.
3.1.1 Seeking innovative ways of producing new jobs
The Berlin initiatives have consciously sought new ways to generate additional jobs. The
Ecological Rehabilitation Programme (ÖSP) is one approach adopted by the Berlin Senate. It
combines the need to solve many urgent ecological problems in eastern Berlin, with the need
for employment. The aim of the ÖSP is to employ large numbers of people in the 'secondary
labour market', where jobs are supported by some form of 'subsidy', and to carry out
community-based environmental improvements. With a link between employment (80%) and
training (20%) in the make up of each job in the ÖSP, the programme could make it easier for
participants to move into the unsubsidised 'first labour market', even though there were high
levels of unemployment in Berlin.
The 'secondary labour market' is primarily a Federal instrument, providing jobs for
unemployed people through subsidies from the Federal Labour Agency. The regional Labour
Market Programme adds funding for personnel and training costs, and programmes such as
the ÖSP itself, provide funds for investments within job creation schemes.
The ÖSP was designed to deal with the combination of ecological and economic problems in
a sociological sense - responding to the actual needs of the population requiring help. Rather
than getting 2000 DM per month in unemployment benefit, programme participants receive
2400 DM and take an "80% job" for 3 years, working for 80% of the time and training on the
job for 20%.
A parallel Environmental Improvement Programme (EIP) has focused on raising the
environmental performance and competitiveness of Berlin’s SMEs. This has also been highly
successful in improving overall access to and use of new technologies. A key element of the
17
EIP is the identification of the particular needs of groups of SMEs, which are then targeted
through the establishment of 'service companies'. The service companies provide a base of
specialist support to SMEs, from access to information to provision of new, and centrallymanaged services, such as centralised energy purchasing, introduction of CHP systems, and
solvent collection. They also provide assistance with planning and R&D, and are in a position
to demonstrate how environmental technology and other environmental upgrades have the
potential to improve business performance.
The EIP results in job creation in two ways. When businesses replace old production systems
with more efficient up-to-date ones, they also lower wastage of resources and reduce
operating costs. This frees up capital for businesses to grow and produce more jobs. Secondly,
the EIP actively encourages innovation in environmental and related technologies, and
through this is building up a strong green industry sector for the long term.
3.1.2 The role of government in Berlin’s ÖSP and EIP Programmes
The role of Government in Berlin has been crucial from the outset of the ÖSP and EIP
programmes. A range of government institutions are involved in these programmes, and each
brings its own expertise and funding lines. The main government institutions involved are:
i) The Berlin Senate Department of Urban Development and Environmental Protection, and
within that, the Special Unit for Environment Support and Information (Sonderreferat für
Umwelt - SRU). The Department and its Special Unit are the chief architects of the ÖSP and
EIP programmes;
ii) The Senate Department for Labour and Women, which funds the salaries of some of the
people employed on ÖSP projects;
iii) The Senate Department for Economics and Technology (reporting at the Federal level to
the Ministry for Economics). This department is responsible for funding for the EIP that is
provided through the EU’s European Regional Development Fund (ERDF), and has also
originated the newer ZÖW (Zukunftsinitiative Öklogisches Wirtschaften) programme for
SMEs;
iv) The Federally-funded Labour Office (or employment agency) in Berlin, which is the point
of contact for those who are unemployed, and which knows each individual's skill levels. The
Labour Office also provides the bulk of project costs by funding the salaries of participants in
the ÖSP programme, who would otherwise be unemployed.
At the EU level, a key partner has been the European Commission Directorate XVI, which
provides ERDF funding of the EIP Programme. Some individual projects have been cofinanced through other Commission programmes such as THERMIE and those operated by
DG XVII.
3.2 Financing Arrangements
The involvement of all these Local, Regional and Federal government institutions, and other
sources of funding, results in highly integrated programmes at local level and also at a policy
level. However, this leads to complex funding arrangements, and means that potential clients
often need considerable help in building their financing packages.
18
A 'project leader' applying for Ecological Rehabilitation Programme (ÖSP) funding may, for
example, receive support from:
i) Federal institutions (eg. the Bundesanstalt Fur Arbeit - the Federal Labour Office, which
gives money for job creation among the unemployed;
ii) The Berlin Senate of Labour and Women - for salaries of the people employed on the
project;
iii) The ÖSP itself - to cover investments;
iv) Foundations such as the Deutsche Bundesstifftung Umwelt - providing money for projects
The ÖSP money in turn comes from The Senate Department of Urban Development &
Environmental Protection, which wishes to support innovative environmental projects that
also embrace economic objectives.
Funding for the EIP is simpler, and comes primarily from Berlin’s Local Government, the
EU’s ERDF, and from the SMEs participating in the EIP, via their normal sources for
obtaining capital funding.
The B&SU service company (see below) already plays a role in co-ordinating programmes
from several different Senate departments so that there is a coherent presentation to the
outside world. The B&SU also actively encourages input from different departments to the
projects of other departments.
Income summary: Berlin Environmental Improvement Programme (EIP)
Key sources
Amount ECU Job creation
33
m
178 total direct:
EIP 1 (1989-93) W. Berlin
13 m
132 permanent
• ERDF
20 m
8 temporary
• Berlin
38 in job creation schemes
+17
m
(117 of these are jobs in 'service
SME capital
companies')
+ 670 PY in production of investment
goods (mostly outside Berlin)
EIP II (1992-95) W. Berlin
• ERDF
• Berlin
19 m
8m
11 m
SME capital
+ 13 m
EIP III ('94-2001) E Berlin
(Objective 1 area)
• ERDF
• Berlin
59 m
81 direct:
(a full evaluation is not yet available)
44 m
15 m
EIP IV ('94 - 98) parts of W. 40 m
Berlin (Objective 2 area)
15 m
• ERDF
25 m
• Berlin
19
Income summary: Berlin Environmental Rehabilitation Programme (ÖSP)
Every 1 DM of Federal District money (Berlin Lande) generates 4 DM invested into the environment
Key sources
Amount ECU
(approximate
figures)
Job creation
ÖSP 1 (1991-95):
214 projects
(per project:
50,000 to
500,000 (over a
number of years)
4,180 total:
(3,880 jobs in the secondary
labour market, and 300 jobs in the
first labour market)
Total of project funding:
222 m
local/regional government
ÖSP (Berlin Environment Senate)
Other Berlin Senates:
- Labour & Women (some salaries)
- Building & Administration (school
refurbishment)
ARP
Project leaders themselves
national government:
DBU: Federal Environmental
Foundation
BMU (Federal Ministry of
Environment - large projects at start of
ÖSP)
ABM (Federal Office for Labour salaries for people in 2nd labour
market)
EU (mostly through European Social
Fund for training)
23 m
31m
13 m
5m
1m
32 m
103 m
3m
3.3 Berlin’s eco-renovation programmes
3.3.1 The Environmental Improvement Programme (EIP)
The Environmental Improvement Programme (EIP) was launched in 1989 to tackle
environmental problems and to give Berlin's SMEs a competitive edge, to safe-guard their
long-term survival and success, by promoting uptake of the latest environmental technologies.
The programme was funded primarily by the ERDF (European Regional Development Fund one of the European Union Structural Funds), and represented the first proactive regional
environmental improvement programme to be taken in the context of the ERDF. Following
the success of EIP I in West Berlin, a 400,000 ECU series of such programmes is due to
continue until 2001: Programmes II and IV in the western part of the city and III in the eastern
half.
20
The 178 jobs created in Berlin's EIP 1 programme for SMEs, ranged from unskilled and
skilled, through administrative assistance to professional trained engineer. 132 of the jobs
were permanent, 8 temporary and 38 provided by job creation schemes: 117 of them were
created in the 'service companies' set up to provide central services for SMEs. In addition, 670
person/years of 'indirect employment' were created in the production of the environmental
technology investments for Berlin's SMEs in EIP 1.
Larger follow-up EIP programmes are building on these results and can be expected to
produce proportionately greater job numbers: EIP II (1993-95) is due to be evaluated soon,
while EIP III (1992-2000) and EIP IV (1994-98) are still running.
The EIP has adopted an integrated approach to environmental health, safety and quality
improvements within SMEs in manufacturing industry. The programme includes 50%
investment subsidies; the creation of environmental 'service companies'; bulk buying
initiatives; and infrastructure provision for energy systems, fume extraction etc.
The impetus for the Environmental Improvement Programme (EIP) came from a recognition
of the important role of SMEs in Berlin’s economy. In the 1980s West Berlin was still
dominated by major companies with over 500 employees, particularly in the electrical
engineering industry. However, in practice, 75% of industrial jobs were in SMEs which had
been effectively cut off from expansion beyond the outskirts of the city and were largely
uncompetitive.
On top of this, Berlin's employees in both large and small companies were generally less
qualified than their counterparts in the rest of Germany. The combination of all these factors
was contributing to a fast rising level of unemployment. Building a healthy SME economy
was going to be increasingly essential.
At the same time, environmental pollution was being recognised as a critical problem.
Investigations showed that SMEs were significant contributors to local pollution - especially
in industries such as foodstuffs, dry cleaning, metalworking, metal-finishing, and
woodworking. The high concentration of companies within the city itself magnified the
problems - especially for adjacent residential areas. Faced by the demands of environmental
protection many SMEs, and particularly the older ones, were also in severe financial
difficulties. This has been exacerbated by sharp rent rises since 1990.
The enormous potential of programmes targeted at SMEs was demonstrated in a pilot study
for a small, local investigation of pollution in Neukölln, Berlin. This received EU funding of
ECU 100,000. The results showed that at the local level, relatively little could be achieved in
combating some significant environmental problems such as traffic pollution, but that vast
room for improvement existed in the realms of household and SME consumption. The latter
also presented a significant opportunity for job creation.
Public funding for the Berlin EIP Programme is provided on the basis of an investment
contribution from the clients themselves: grants may cover up to half the total costs, with the
average being 40% programme support, 'matched' with 60% company capital. Higher levels
of programme support, up to 80%, are available to set up central infrastructures and to found
'service companies'.
21
The most direct form of assistance within the EIP is a 50% subsidy for investment in clean
technologies. With the subsidy, the banks can usually be persuaded to finance the remainder
required for renovations which are both economically and ecologically motivated.
3.3.2 Meeting the needs of SMEs - the ‘service company’ approach
For the right advice to reach the SMEs, a co-operative effort between SMEs and
environmental engineers was essential. A sector by sector approach was developed, which
linked appropriate environmental and SME expertise to develop practical solutions to
common problems faced by groups of SMEs. A programme-managing ‘service company’,
called B&SU, was created to facilitate this process, and to provide both advice and a conduit
for effective forms of financing.
The 'service company' concept is a unique feature of the EIP approach. 'Service companies'
and central infrastructures are designed to enable SMEs to benefit from the same level of
efficiency in service provision which larger firms are able to provide in-house, but which
SMEs could not afford as individual businesses. Based on assessment of the pattern of service
provision that SMEs require, but are unable to obtain as efficiently as larger enterprises,
‘service companies’ are set up to fill the gap.
For example, where larger businesses might have their own R&D departments, the EIP
commissions and pays for research; or where an acquisition department in a large company
would establish the best source of new technology, the EIP will seek out the most appropriate
solution for an SME or group of SMEs.
The EIP therefore helps to establish 'service companies' that provide access to facilities and
services that individual SMEs would not wish to invest in directly. These ‘service companies’
have so far included companies providing combined heat and power (CHP) schemes,
environmental consulting, and vocational training.
The ‘service company’ set up to provide CHP schemes illustrates the overall approach.
Through the extensive research programme which preceded the establishment of the EIP, it
was known that groups of businesses such as bakeries, car repair shops, or machine tool
manufacturers, had highly complex energy needs for cooling, heating, vapour extraction and
many other types as well.
The CHP service company was established by the EIP to help SMEs meet these needs, and
became one of the most important elements in improving environmental performance. The
CHP service company does all the fitting, selling, buying and administrative functions: it
deals with all the extra intelligence needed, for example engineering. Small CHP units are
placed in the back yards of individual SMEs or groups of SMEs and leased to them on a
contract of at least 10 years, to allow for a reasonable payback period for the service
company.
At the start of such a 'service company' programme, substantial subsidies (up to 90% of startup costs) are required to open the new market and support its development until confidence
and a firm customer base have been created. Once a critical mass has been reached, the
service company moves to a position where it can operate without further subsidy.
Within the EIP, eight service companies have so far been created. Most of these companies
need 3/5 years to become economically stable, and there is no set limited to the number of
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years they can be supported. After interim financial assessments, they may receive help from
more than one programme in the EIP series.
Projects supported through Berlin's EIP programme: Examples
The 94 projects supported in the EIP I programme include:
Individual businesses - 64 projects covering metalworking, woodworking, automobiles,
photographic & printing, electrical engineering/ electronics, foodstuffs, textiles, plastics
processing, hairdressing/ cosmetics, laboratories:
Examples:
• three new low-dust wood-processing machines and a central extractor unit were
installed in a joinery company, allowing shavings and extracted dust extracted to
be reprocessed into wood briquettes which were then used to heat the workshop
and wood drying chamber. Heating and waste disposal costs were eliminated,
productivity was raised, and dust concentrations were cut to one-fifth of earlier
levels.
• a new ventilation and extraction system was installed in a print shop to remove
solvent vapours that were troubling staff and residents, and air quality was
improved by replacing the alcohol cleaning agent isopropanol (IPA) with a
vegetable oil-based cleaner. Installation of a new energy-efficient printing plate
machine reduced water consumption by a 99%, and printing plate developer
consumption by 40%. These cuts in emissions, and costs savings have contributed
to the long-term security of the business and its staff.
Central infrastructures - 2 projects:
• recycling of building materials: the BEL (BauElement Lager - "building
component warehouse") was founded to dismantle, store, prepare for sale and
catalogue building components arising from the modernisation of old buildings,
and so to save landfill pressure and disposal costs,. In 1993 alone, BEL recycled
10,000 metric tons of building waste (stone, wood, plastics, insulating materials
and metals) which was sold in Berlin, creating 54 jobs with training (18 full time
jobs and 36 temporary jobs for people in the 'secondary labour market').
• a central paint shop: the number of paint jobs carried out by individual SMEs is
often too small to justify upgrading to more environmentally desirable technology.
A central paint shop, used jointly by seven companies, was set up with the latest
technology, to provide efficient paint application and exhaust air treatment, using
water-based products. Solvent emissions were cut by 70%, paint consumption and
operating costs reduced, and new employment was provided for people who are
difficult to place on the job market, including young offenders, drug addicts and
disenfranchised members of ethnic groups.
Service companies - 6 projects providing service companies for the automobile trade, for
the operation of block-type thermal power plants (CHP) and the use of renewable energy
sources, for recycling of solvents from laboratories, and from car repair shops, for
vocational training in environmental technology, and an environmental agency for the
woodworking trade.
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Pilot demonstration consultancy & auxiliary projects - 15 projects supporting
environmental management concepts developed for different industry sectors.
Courtyard business centres/sites - 7 projects for the ecological modernisation of businesses
in some of Berlin's courtyard business centres or Gewerbehofe, which house collections
of workshops or offices within a mixed industrial/residential tenement block, and so
produce a variety of pollution problems in a confined space. In one Gewerbehofe this has
been relieved through the provision of central services, such as a natural gas-fired block
type thermal power plant (CHP) for heating, warm water and electricity. Other
improvements include waste reduction, materials recycling, noise abatement, extractor
units, water-based inks and paints. As a result, productivity has improved, energy and
waste costs reduced and the environmental and technical knowledge of staff much
increased (with consequent longer-term benefits in employment and environmental
terms).
Successful projects within EIP II (1993- 1995) include:
• Individual businesses: digital data transfer by networks between print and advertising
agencies; innovative technologies for inner-city laundries;
• Central infrastructures: for sustainable bakery production; food processing factories;
timber businesses; metal craft firms.
• Service companies: a recycling centre for dangerous waste from industries;
environmental public relations for the application of environmental technologies; further
companies in energy supply and waste management.
Other innovative projects from EIP I, II, and III include:
Environmental measures in hairdressing; environmental protection measures at printing
companies; environmentally friendly automobile workshop (securing 35 jobs);
environmentally friendly production of compact discs; environmental improvement in a fish
smokehouse; environmental measures in the disposal of animal carcasses (safeguarding 20
jobs) and at a butchers (securing 10 jobs + apprenticeships); mobile wastewater-free motor
washing station for automobile businesses; environmental measures in a dry cleaning
company (creating 7 jobs); and a mobile environmental technology centre (creating 4 jobs).
In the EIP II, six pilot EMAS eco-audits have been conducted in SMEs from different
sectors, with 60% of the costs paid for by the programme and 40% by the businesses. The
newer ZÖW (Zukunftsinitiative Öklogisches Wirtschaften - Ecological Management
Initiative for the Future) programme also has a budget line specifically for eco-audits, and is
also co-funded by the ERDF.
3.3.3 Bulk commissioning of clean technologies
One strategy of the EIP is to provide manufacturing SMEs with affordable access to
environmentally sound technologies, and thus improve their environmental performance
beyond minimum legal standards and increase efficiencies - thereby giving them a greater
chance of survival and success in the long term.
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The EIP has been able to provide major support to SMEs in the bulk purchasing of clean
technologies. The purchase of clean technologies is often extremely expensive if each
company's order is treated as a one-off. The EIP programme therefore approached suppliers of
machines, processes and infrastructures to produce technologies that could be sold many
times over. One such specification concerned the development of a new type of bakery oven,
which is low in energy use and excellent for handling food. This technology has already been
sold 28 times to SME bakeries. The effect of these "bulk ordering" schemes has been to
provide individual SMEs with a subsidy on purchasing new technologies, and reduced
production costs thereafter, and at the same time to create new clean technology markets.
Jobs for the disadvantaged
The EIP and ÖSP programmes make specific efforts to integrate people who have "dropped
out" of mainstream society, including handicapped people, young offenders, drug addicts
and disenfranchised members of ethnic groups. Green SMEs are also being supported in
providing jobs for those with a personal or economic disadvantage. Examples of jobs for the
disadvantaged, linked to the EIP and ÖSP programmes include:
Environmentally-friendly printed circuits : Elkotec assembles printed circuit boards for the
electronics industry, using a production technique which reduces hazardous emissions (work
safety) by 99%, and special wastes (flux, solder, thinner) by 40/50%. Funding from the EIP
and the EU HORIZON initiative (for the vocational re-integration of handicapped and
disadvantaged persons) covers 90% of the costs of providing training to 8 full-time
employees with severe physical handicaps, and 20 temporary posts per year for people with
chronic mental handicaps. The remaining 10% of the costs are covered by the company
itself, which is part of an international project partnership with Greece and Northern Ireland.
'Clean' environmental analysis : the BIFAU laboratory undertakes pollution detection
analysis using a process which itself produces significantly less pollution than traditional
laboratory procedures: water consumption is reduced by 95%, indoor air pollution by 50%,
and special wastes and solvents by 70%. At the same time, training is being provided to
unemployed university graduates (20 at any one moment - 80 in total over three years), 50%
of whom subsequently succeed in getting a job on the open market. 65% of the costs are
provided by the EIP (including ERDF) funding, with the remaining 35% coming from the
company itself. Additional financial input from the ESF (European Social Fund) covers
training.
Job promotion companies: within the Berlin ARP (Labour Market Framework Programme)
which part funds the ÖSP, there is another variant on the theme of job creation initiatives.
Called 'job promotion companies', they have been set up, to employ primarily the
unemployed from problem groups, to carry out socially necessary work such as
environmental improvements (monitoring, data collection, consultation etc). Employees earn
an income as in any other company and are performance-oriented. The tasks are performed
mainly for Senate departments and districts, and involve valuable projects that might
otherwise remain undone.
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Berlin Environmental Improvement Programme (EIP): Employment and
Environmental Results
In the first four-year EIP programme (1989 - 93), 2-5% of all SMEs in the western part of
Berlin benefited from an investment total of DM 100 million. Around 25% of this came from
the European Regional Development Fund, 40% from the Berlin City government, and 35%
through investment by SMEs from their own capital, prompted by the EIP. The EIP
programme is now being extended across Berlin with ERDF and Berlin City government
funding.
Employment results:
• 259 new jobs created - primarily in service companies and central infrastructures.
178 jobs were directly created under EIP I (132 of them permanent), with a further
81jobs being directly created under EIP II.
• an estimated further 1000 person years of employment (670 in EIP I) created at
companies manufacturing the technical installations - many of the 670 PY created
in EIP I were outside Berlin.
Environmental results:
for the whole programme:
• less primary energy used (140,000 MWh/annum)
• CO2 emissions reduced (44,000 tonnes/annum)
• less drinking waster used (62,000 cu m /annum)
• less waste (11,100 tonnes/annum)
• NOx emissions reduced (23 tonnes/annum)
for specific projects:
• less wood-dust in woodworking companies (80% reduction in 1 company)
• less solvent emissions in printing companies (80% reduction)
3.4 The Ecological Rehabilitation Programme (ÖSP)
Known locally as ÖSP, the Ecological Rehabilitation Programme is directed toward the twin
objectives of economic and ecological regeneration, and is designed specifically for the needs
of the eastern part of Berlin. The programme combines job promotion measures with grants
for investments and training/qualifications. As with its sister programme, the EIP, the ÖSP
has succeeded in achieving its multiple economic and environmental objectives.
The ÖSP is currently due to run to 1997. It was set up in 1990-91 as part of the job
creation/Labour Market Framework Programme for Berlin, known as ARP
(Arbeitsmarktpolitisches Rahmenprogramm). The ARP defines the principles and the regional
financial instruments for regional labour market policy. It was established in 1991 and
continued in 1992 and 1994.Within the ARP it was decided to allocate funds to the ÖSP
programme , and the ÖSP became the first financial instrument to be directed to a job creation
schemes in a specific sector - the environment: prior to that funding had always been targeted
to particular groups of people.
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The ÖSP Programme (1991-95) has resulted in 3880 secondary labour market and 300 first
labour market jobs.
The ÖSP is community-oriented and encompasses not only environment and economy, but
also human resources. While the shape of the programme is essentially determined by the
organisers, the spread of activities which can be funded through the programme is extremely
wide, and allows room for many project ideas to emanate from the communities themselves.
There are no seed funds for the preparation of applications for finance from the ÖSP.
However, the staff at B&SU, which is also a ‘service company’ set up under the EIP, provide
professional and supportive advice to ÖSP programme applicants as they put together their
proposals.
Funding under the ÖSP is based on co-finance. Each project supported by the ÖSP must first
find its own share of non-ÖSP funding, after which the ÖSP can agree co-finance. This means
that a complete 'financing concept' has to be built for each project, and so projects funded
under the ÖSP require a longer up-front preparation time than those in the EIP programme.
The ÖSP client base tends to be NGOs and community organisations, as all applicants have to
be non-profit and set up to carry out job creation. If an organisation receiving ÖSP funding
makes a profit on any operation (for example, from the installation of new technology), this
profit must be ploughed back into new jobs or job creation measures.
Utilising the secondary labour market as a primary resource, a huge variety of social and
environmental projects have been accomplished, that might otherwise never seen the light of
day: for example, schools and schoolyards have been ecologically renovated and innovative
recycling schemes are dealing with toxic solvents, chemicals and refrigerator returns.
The bulk of ÖSP projects have tended to involve 20 to 40 people each, often on reasonably
unsophisticated activities such as greening the streets, eliminating waste, soil improvement,
landfill and watercourse rehabilitation , and improving 'green-belt' areas. Now there are an
increasing number of smaller higher technology projects involving 5 or 6 people - for
example, technology developments in the commercial waste industry and a solar station for
rentable solar-powered boats.
The ÖSP programme has been expressly used to develop highly innovative solutions to
social/ecological problems, and to try out new market niches: there is a conscious focus on
projects that represent the beginning of a creative idea for services or products, designed to
protect the environment. Substantial qualitative improvements have been established in terms
of resource savings, soil decontamination, 'greening' of urban spaces, especially around
schools.
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The Ecological Rehabilitation Programme (ÖSP) - project examples
Household-based waste projects:
The Waste Unit of the Senate Urban Planning and Environmental department has
developed two household-based waste projects:
• composting scheme
• "yellow sack" scheme for separating and collecting packaging from households
School refurbishment:
• greening the playground: this project landscapes kindergarten playgrounds, and
removes hard surfaces.
• solar heating : a 1.7 m DM project created 10 permanent jobs and produced energy
and savings of 50% and 60% by installing solar water heating systems, and
equipment to use rain water in the toilets and for watering the plants in their newly
green surroundings. This has provided a model for all schools built on the same
‘panel’ design, and which general have high energy and water use.
Urban renewal & open spaces:
• Landscaftspark in Barnimpark : a massive new park has been created next to an
area of concrete apartment blocks in the satellite/commuter city of Barnimpark.
Along with trees, ponds and bike paths, the park also incorporates agricultural plots
to provide on-going activity, and jobs have been created to maintain the park.
• ecological rehabilitation of public buildings & housing : a series of projects
upgrading the environmental performance of Berlin's public buildings, including
energy saving measures etc., and support for housing corporations to carry out
landscaping and building renovation.
Reconditioning and reuse of products:
• Development of the reuse market : reconditioning and reuse of products offers
greater resource savings than even the best recycling schemes. Projects include
setting up a store for used building elements - doors, windows and other
components are refurbished and sold at about one-third the price of their new
counterpart.
4. Improving the environment and promoting employment in Denmark
4.1 Introduction
With the leadership of the Danish General Workers Union (SiD), a group of government and
research organisations came together to see what could be done to reduce future
environmental impacts, while also shifting people "from being passive recipients of
unemployment benefits to obtaining meaningful employment". The resulting proposals,
outlined in Improving the Environment and Promoting Employment in Denmark, SiD 1995,
have been directed to politicians, local authorities, trade unions and NGOs.
This project contrasts with the examples from Ontario and Berlin, in focusing on macroeconomic analysis to demonstrate and, hopefully to direct, policy for eco-renovation by
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assessing the job creating potential of different forms of investment. Rather than being
designed first and foremost to create jobs and deliver environmental benefits via integrated,
action-oriented, programmes, the Danish example focuses on ways to create a favourable
political climate for eco-renovation through an alliance of groups that determine national
policy.
The Green Jobs Project of the Danish General Workers Union and the Ministries of
Environment and Energy, Housing and Transport, demonstrates how the stimulation of
renewable energy supplies and of energy efficiency can provide more jobs than investment in
fossil fuel supply alternatives, and, at the same time, significantly reduce environmental
problems. Similar initiatives involve recycling waste (from demolition, electronic products,
compostibles, water, glass and paper) are also set out.
One projection estimates that the energy component alone could generate almost 2 million
jobs over 10 years of the EU countries. In calculating expected employment implications from
the proposals for each sector, the authors emphasise that the tasks and time frames for actions
can vary considerably, depending upon the seriousness of the environmental problem.
The Green Jobs Project took as its starting point the existing official national action plans and
targets on the environment. The employment implications of these plans were assessed, and
the results of these assessments were then used to determine whether some plans needed to be
accelerated or supplemented by further initiatives, in order to maximise employment benefits
along with environmental and economic gains. The project also focuses on identifying the
most effective ways for supporting improved environmental performance in industry in
general, and for promoting green industries, in particular, as a growth sector in the overall
economy.
For the study, Improving the Environment and Promoting Employment in Denmark, the SiD
Union took the lead, with a Steering Committee that brought together the Danish
Environmental Protection Agency (which chaired the committee), the Economic Council of
the Labour Movement and the Centre for Alternative Social Analysis. There was also followup participation from ministries and NGOs. The study received financial support from the
Council for Recycling and Cleaner Technology, the Ministries of Environment & Energy and
Transport, and the National Building & Housing Agency.
4.2 Promoting the 'greening of industry' & 'green industry'
4.2.1 Employment projections
It is estimated that carrying out the proposed activities in water supply, sewerage, waste sites,
waste and recycling, agriculture and nature (all of which relate to existing political targets and
action plans), would produce 40,000 additional jobs. Most of these posts would in fact be
temporary (around 10 years) as they relate to conversion rather than operational measures, but
would nevertheless be highly welcomed.
The Danish SiD study suggests that there would be a total of 10,000 permanent jobs created
in operating tasks, and that these would come on stream over a number of years. The
proposals would generate one-off employment related to capital expenditure, to the tune of
28,000 jobs per 8,150,000 Danish Kroner (DKK) invested annually. It is anticipated that this
investment level would run for 10 to 15 years.
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Applying similar principles to the energy field, has produced proposals which would generate
around 15,000 jobs. While a number of environmental measures have been worked out for
transport, these require more detailed policy development before precise job figures can be
deduced. Likewise, in the field of urban ecology: while it is clear that these actions would
provide a direct improvement in social conditions, it has not yet been possible to calculate
expected job gains.
4.2.2 Net employment effects
The authors of the Danish report consider that the net effect in boosting employment is
greatest when initiatives are financed by increasing taxes. They emphasise the practical
importance of considering how to time environmental action to fit the labour supply. Capital
investment on environmental conversion projects often requires a large and sudden increase in
demand for a particular type of labour - temporarily. Such projects can therefore create
bottlenecks in labour supply. They note that "Given the present state of the business cycle in
Denmark, it would thus be appropriate to give higher priority to the parts of the conversion
that especially increase the demand for unskilled labour... Thus environmental policies can
also be integrated with active business cycle policies.... (and)..an active labour market policy".
4.2.3 Some new models of financing
The report sets out a catalogue of ideas for various types of financing, recognising that a
whole range of actors and resources need to be drawn in to deal with environmental questions,
and that a mix of financing measures are likely to be necessary to achieve this. The following
are some of the recommendations that it makes:
4.2.4 Reduced expenses for unemployment benefits
The study authors, and the Union leadership, suggest that diverting unemployment benefit to
employment creation initiatives reduces the cost of the proposed eco-renovation initiatives
from DKK 1 billion to DKK 0.2 billion when the multiplier effects are accounted for. They
recommend using these savings to provide regular state budget allocations for subsidising
increased municipal employment - but not in areas of labour shortages. This would provide
the greatest boost to employment overall, and generate strengthened local economies, at the
same time as improving the environment.
4.2.5 Environmental taxes
The SiD study includes a simple calculation of the effect of a potential shift of taxation from
labour to raw materials:
Factors of production in Denmark in 1989:
- personnel
DKK 422 billion
- raw materials
DKK 97 billion
DKK 231 billion
- income
Total
DKK 750 billion
= 56%
= 13%
= 31%
= 100%
“A reduction in raw material use of 1 percentage point - from 13% to 12% - corresponds to
DKK 7.5 billion in 1989 prices. If this part of total production is carried out instead by labour,
so that total personnel compensation increases to 57%, 45,000 extra jobs would be created".
Improving the Environment & Promoting Employment in Denmark, SiD 1995
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SiD Green Jobs Project: Proposed initiatives on waste and urban ecology
Waste
The SiD report suggests a number of initiatives to improve on Danish performance in waste and recycling:
Household waste:
• extend waste sorting to 80% of Danish households, including a division between
organic waste and other waste;
• improve access roads and paths to blocks of flats (will provide construction jobs);
• consider the method of organic household waste treatment (employment varies
considerably: lowest for a biogas common plant. Alternatives include centralised
composting - high or low technology);
• expand schemes for the collection of garden waste.
Other waste:
• selective demolition would increase employment in relation to traditional
demolition by 20-30%;
• improve Denmark's relatively low performance on recycling cardboard from
businesses;
• investigate a workable take-back scheme for discarded products. This might be
encouraged by collecting a tax on new products and subsidising repair workshops,
plus ensuring the marketability of collected and processed materials and products;
• involve refuse collectors in planning the collection of waste, in the daily guidance
of the public and in ensuring that waste is correctly sorted.
Urban ecology
The Government of Denmark adopted an action plan on urban ecology in May 1995. The
SiD project suggests additional action to ensure that:
• individuals have a financial incentive to conserve resources - through changes in
water and energy prices or subsidising conservation initiatives;
• R&D on urban ecology is promoted - including the design and use of technical
installations, and investigations of how local communities function socially and
economically;
• social aspects and labour market policy are incorporated. Improving urban areas
helps social integration and allows more people to participate in the labour market;
• councils, housing associations, householders etc. have information on how to
conserve resources;
• consultants are available to inspect buildings and advise on energy conservation
and other ecological measures;
• an ecological building code is introduced for new construction.
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5. CONCLUSIONS
5.1 Key Lessons
From the range of experience presented in this report and the implications drawn form the
initiatives in Ontario, Berlin and Denmark, a number of key lessons can be distilled:
• integration is the name of the game: the community and SME programmes in both
Ontario and Berlin took a strategic approach to tackling the combined problems of
environmental degradation and unemployment. The initiatives were designed to address
both issues from the outset.
• target the right people with the right programmes: spend time to understand the real needs
of the target audience, and provide sufficient flexibility in the programmes so that they
can accurately meet individual community and SME needs. Focus attention on those
communities and companies that are ripe for change, and understand the various
pressures they face;
• watch that programmes don't become too complicated: while integrating objectives and
providing flexibility so that projects can be targeted to real needs, do not create a
programme that is so complicated that it is inaccessible to those it is meant to help.
B&SU in Berlin have to spend considerable time simplifying the presentation of some
programmes in order to sell them to clients.
• "each region is a keyhole - build the right key": work flexibly with the real problems of
each region, rather than creating or transferring standard programmes.
• be sensitive to scale: big is not necessarily better - economies of scale can be achieved
through cooperation and sharing;
• organisational design is critical: action will be prompted by understanding the thinking
and situation of the 'client' group and programme partners, then designing the
organisation to fit. Berlin's 'service companies' were a strategic response to SMEs'
inability to afford to upgrade many aspects of their operations on their own. Experience
suggests that at least 10% of overall budgets should be allocated to organisational aspects
of any eco-renovation programme, such as strategic studies, starting and maintaining
partnerships, advisory personnel, communications and technical support for partners;
• provide training in social entrepreneurship: working as an entrepreneur on behalf of the
wider community is a relatively new activity: identifying and training appropriate social
entrepreneurs has a powerful multiplier effect on action;
• market mechanisms may not be sufficient: in Ontario, a 30% rise in electricity prices did
not lead to an increased take-up of conservation measures: community-based, social
marketing was critical to prompting action by households - as was individual assistance
to SMEs. Likewise in Berlin, considerable intervention has been used as a strategic tool
to improve the performance and survival of SMEs - even to the point of supporting firms
in markets that do not yet truly exist.
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• watch for duplication among initiatives: in Ontario, one of the spurs to the Green Home
Visits was an attempt to reduce the plethora of initiatives which were causing confusion
and burn out among potential recipients. In Berlin, the B&SU are able to give their
clients consolidated advice covering a wide range of funding initiatives;
• empowering 'the community' pays off: the community focus leverages community
resources; lasts longer (through programmes that go beyond the initiating organisation);
improves programme design (building a better match between the planning, delivery
agent and participants); and improves programme delivery (providing greater flexibility,
more responsiveness, less risk, increased cost-effective, greater customer diversity, and
enhanced credibility);
Ontario's community based approach has produced untold environmental, economic and
community payback, in the form of hundreds of innovative spin-off projects, and in turn these
projects have acted as a powerful promotional tool for the main Green Home Visit and Green
Industry Visit programmes. Within three years government revenue and savings were
estimated to have outweighed the original investment by a factor of 10 to 1;
• don't always take the obvious road to finance: this philosophy has enabled the Berlin
Senate's environment department to seek out multiple funding from an enormous range of
sources, many of them not directly related to the environment, for example professional
institutions, job creation funds and industrial and regional programmes;
• think and act EU / local: likewise, Berlin has been highly successful in combining support
from the European Commission with regional and local decision making.
• include thorough evaluation: there is an incredible wealth of knowledge in the staff of
B&SU and their clients, about what works and what doesn't. No money has yet been
made available by the Berlin Senate or the EU to carry out longer-term evaluation on the
results of SMEs supported through the EIP, but such evaluation is clearly critical to the
transfer of good practice, in reports such as this one.
In Ontario, up until now, there has been some reluctance to delve too deeply into the GCI
experience for fear that this might compromise the flexibility that comes from a non-standard
somewhat 'unwritten' programme. However, evaluation will be of great value to those who are
considering similar household and SME initiatives.
5.2 Preparing for a new agenda
The experiences of the eco-renovation initiatives analysed in this report demonstrate that the
old debate pitting jobs versus the environment has given way to a new agenda. It is clearly
possible to begin to deliver on sustainability - successfully combining environmental,
economic and employment objectives in powerful eco-renovation activity. Indeed integration
of these multiple objectives is key to the competitiveness and resilience of local economies,
and becomes even more critical when localities are pitted against external economic forces
that are outside of their control.
What is needed to enable many more individuals, communities and economies to benefit from
this type of action, is to spread the word, as this report aims to do, and to establish many more
demonstration initiatives - such that they become the stuff of economic life, rather than
subject to political whim.
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While individual champions are likely to continue to be vital to the initiation of specific ecorenovation programmes, much can be done to prepare the ground for local action. Macro,
'framework factors' such as Eco-tax reform, the development of innovative financing
mechanisms, and a genuine distribution of political power can create the right kind of 'system
conditions' for the nurture of eco-renovation 'seeds'.
In his paper presented at the conference on “Eco-renovation: Jobs and the Environment” held
in Copenhagen in September 1995, Naresh Singh, of the International Institute for Sustainable
Development in Canada, set out the evolution of a new agenda that is required to deliver
employment and sustainability through local eco-renovation initiatives.
The old agenda maintained that a fundamental conflict existed between jobs and the
environment, and that trade-offs had inevitably to be made between the two. As this report
demonstrates, there is no theoretical or practical basis for this view. A conflict between jobs
and the environment simply does not exist, provided they are approached as twin, integrated
objectives.
The current agenda is one of transition, in which jobs are being created and recognised in
environmental services, and in which enterprises that are environmentally sound are more
viable, for example through increased resource efficiency and reduction in waste emissions,
and offer more secure jobs. Eco-tax reforms are also a part of this agenda. This transition is
witnessing a shift towards multi-skilled, entrepreneurial and community-based approaches,
and away from rigid job descriptions, and career jobs in one organisation.
As this transition proceeds, a new agenda seems to be emerging which is characterised by a
greater integration of aspects of employment and domestic life as part of a move towards
sustainable livelihoods. This agenda will require, and open up, new roles for Government,
business, and community-based action, accompanied by further growth in the importance of
'third sector', or not-for-profit organisations. A part of this will be a decentralisation of
decision-making and fundamental changes in approaches to such diverse activities as health,
education and agriculture. The eco-renovation programmes and approaches described in this
report demonstrate ways to meet this new and growing challenge to traditional approaches to
administration, policy development and programme implementation.
6. References
Danish General Workers Union (SiD): Improving the Environment and Promoting
Employment in Denmark, SiD 1995
Romy Shovelton: Employment and Sustainability - Review and Analysis of Local Initiatives
from Eco-Renovation Workshop, Copenhagen, 8 September 1995 (includes Conference
Papers in an Appendix), European Foundation for Living and Working Conditions
Richard Tapper: Think globally, work locally - creating green jobs, New Ground 52, 1997
34

Employment and Sustainable Development The Role of Local

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