Renewable sources of energy and decent work

1
Renewable sources of energy and decent work

• Jacques Marcovitch
• University of Sao Paulo (USP) and International
  Institute for Labour Studies (IILS)
• ILO Headquarters, Geneva, Switzerland, 28 June
  2007

2
Renewable Energies in Brazil

• Ethanol a 30 year program proven to be
  successful at international scale. 13 billions
  liters/yr replaces 40 of national gasoline.
  Plans to increase by 50 until 2010. Plus 3
  billions liters/yr exports. Positive energy
  balance 101 (out/in).
• Environmental sustainability being favored, no
  competition with food nor deforestation.
  Proalcool can be replicated in other developing
  countries e.g. Caribbean and African. More on
  www.unica.com.br
• ProBiodiesel mandatory blends 2 established, to
  be raised to 5 in 2009. More a social/income
  generation program than an energy one, many
  questions still arising in logistics, quality
  etc. www.mme.gov.br
• Proinfa Renewable Portfolio Standard,
  electricity from wind, small hydros, biomass
  (mainly sugarcane bagasse), total 3300MW,
  guaranteed prices but too much centralized.
  www.mme.gov.br
• CDM landfill gas booming, also manure management
  projects. Brazil is the worlds 2nd in number of
  projects. More on www.mct.gov.br/clima
• Hydroeletricity Increase in Hydro Energy
  Generation in Brazil www.eletrobras.gov.br

3
Biofuels in Brazil Ethanol Production

• Technology has reached full maturity
• Considerable progress made between 70s and 90s
• Productivity
• 4,200 liters per hectare of cane (1980)
• 6,350 liters per hectare of cane (2003)
• 6.500 liters per hectare of cane (2006)
• Efficiency in the conversion of saccharose to
  ethanol
• Extraction and treatment of the juice (grinding)
• Fermentation
• Distillation
• Consumption of energy and water.

Source Unica
4
Sugar cane sector in numbers - 2006
Source MAPA, SECEX, Única, Jornal ProCana
5
Cause-effect links between renewable energy,
employment and incomes (I)

• 1. Around 350 industrial units and 11,000
  independent growers
• 2. For each 1 million tonnes of cane
• 2,000 direct jobs (1,600 in cane plantations and
  600 in processing)
• Indirect jobs correspond to 30 of direct jobs
  (2002 770,000 direct jobs)
• Required investments for each job US 11,000
  23,000 against US 50,000/job (other cultures) or
  US 125,000 each job in chemical industry.
• 3. Average wage (2002)
• Brazilian industry US 241.62
• Sugar industry US 250.82
• Ethanol industry US 277.41 (Center-south
  region US 678,71)

Source Slide kindly offered by Dr. Roberto
Rodrigues Former Minister of Agriculture -
Brazil
6
Mechanisms being used to stimulate clean energy
investment in Brazil

• Mandatory targets biofuel blends in gasoline and
  diesel
• Preferential electricity tariffs for new
  renewable
• CDM coordination capacity building
• Initiatives to lift international trade barriers
  against biofuels

7
Car Technology using Biofuels

• Chronology
• 1950 Development of ethanol fuelled engines
• 1975 Brazilian energy matrix diversification
  with alcohol for transports
• 1988 Flex technology patented in Brazil
• 2003 Flex Fuel vehicle produced in Brazil
• Alcohol Flex-Fuel vehicle participation in
  total sales
• 2003 7
• 2004 26
• 2005 53
• 2006 86

8
Projected sales of ethanol and flex-fuel cars
Source ANFAVEA
9
Main Ethanol Producers in Brazil
Source Anual Exame Magazine 2006/2007 exchange
rate US 1/ R 2 1 In million dollars 2 Diference
between revenues in 2005 in comparison with
2004 3 Division between profit or net profit by
total assets. 4 Source Procana, based on data
published by units or sector organizations. 5 The
objetive is to relate revenues with each tonne of
cane N/A- not available
10
Sugar Cane Production - Brazil
Forecast
Source DAA, SCA
11
Sugarcane Plantations in Brazil
SUGAR CANE 5.9 million ha 5 of
total cultivated land 72,000 producers
all-year-round harvest
12
Cause-effect links between renewable energy,
employment and incomes (II)

• Possible Scenario
• 100 of mechanization in the State of São
  Paulo and
• 50 in the rest of Brazil would reduce
  165,000 jobs compared with jobs offered in
  2000 and remaining jobs will request advanced
  professional skills

Source UNICA (2007)
13
Cause-effect links between renewable energy,
employment and incomes (III)

• 2001 potencial of bioeletricity exports
• 120 megawatts (MW).
• 2007 established capacity and contracted
  exports
• 1.650 MW or 2 of country demand
• 2012 (with 50 of sugarcane biomass) it is
  viable to generate and export
• 9.000 MW or 8 of projected demand

Source Slide kindly offered by Dr. Marcos Jank -
UNICA
14
Cause-effect links between renewable energy,
employment and incomes (IV) 2025 Scenario 5
2025 Scenario 5 Energy global
demand
20 years investments Agriculture Industrial
logistics US 5 billions per year Estimated
Output Ethanol production 104 billions
liter/year in 2025 Electricity production
50.000 GWh/year corresponding to 15 of 2004
electric generation Ethanol exports in 2025
US 31 billions GDP expansion (2025) US 80
billions Employment 5,3 millions jobs
Average Salary 50 above average national
income
Source NIPE/Unicamp/2006
15
Supply Contract (30 of Industry supply)
Industry buy cane
Independent Grower perform all activities
Industry
Grower
Sugar cane productions
Soil treatment
Fertilizers
Defensives
Land
Plant
Harvest
Loading
Transport
16
Rent Contract (70 of Industry supply)
Grower gives the right of land use to the industry
Industries perform all activities
Industry
Grower
Production of sugar cane
Soil treatment
Fertilizers
Defensives
Land
Plant
Harvest
Loading
Transport
17
New type of relationship Contract Intermediaries
Specialized Agents
Grower rents land
Plant buy cane
Industry
Grower
Specialized Agent Contract or perform all
activities
Specialized Agent
Supply Contract
Rent Contract
Sugar cane production
Soil treatment
Fertilizer
Defensives
Land
Plant
Harvest
Loading
Transport
Joint activities between Industries, Growers and
Specialized Agents
18
Renewable energies and decent work priorities
for change (I)

• To develop effective social dialogue among all
  relevant stakeholders on the environment and the
  world of work among government, employers and
  workers organizations
• To identify the consequences of scenarios for
  climate change and mitigation measures on
  production and consumption patterns, poverty
  alleviation and future employment and income
  opportunities
• To support the creation of new green employment
  within renewable energy sources, energy
  efficiency, carbon sequestration, low carbon
  technologies, construction, transport and waste
  management.

19
Renewable energies and decent work priorities
for change (II)

• To support education and training initiatives to
  develop the skills necessary for the creation of
  new green jobs and to facilitate the transition
  for workers who will lose their old jobs?
• To develop assessment techniques to improve
  estimates and to enhance the employment and
  income impacts of large-scale public and private
  infrastructure investments ?
• To strengthen the institutional capacity to
  measure the employment and income effects of
  sustainable development initiatives ?

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Research priorities Expanding the Labour Force

• Green jobs across the economy
• Q1 In which sectors do you see most scope for
  development?
• Q2 Do you agree that the three "big wins" will be
  renewable energy, recycling and resource
  efficiency?
• Q3 What further opportunities are there for
  manufacturing businesses to use recycled
  materials in their production processes?
• Q4 Are there other business opportunities we
  should explore?
• Q5 Is there sufficient awareness of the support
  and advice services already available to
  businesses on resource efficiency?
• Q6 How best can we raise awareness in the
  business community of the savings and
  productivity gains to be had in improving
  resource efficiency?
• Supporting business in accessing new
  opportunities
• Q7 Is there sufficient awareness of developing
  opportunities?
• Q8 How can we best ensure that businesses are
  aware of these opportunities?
• Q9 Are there barriers to businesses wanting to
  expand into, or start up in, the green sectors?
• Q10 What support do businesses need to overcome
  these barriers?
• Q11 Are there gaps in existing support?
• Q12 How can Government best support companies
  wishing to explore these opportunities?

21
Research Priorities Expanding the
Labour Force

• Skills
• Q13 How can we best ensure we have the necessary
  skills within the workforce to develop and excel
  in green sectors?
• Q14 What generic and specialist skills do you see
  as being required, and what level of
  qualification?
• Q15 Where, when and on what scale are skills gaps
  and shortages likely to arise?
• Q16 How can we best support the development of
  skills and knowledge in resource productivity
  within business?
• Role of government
• Q17 Are we using the levers at our disposal
  effectively enough to lead by example and help
  stimulate demand for the products and services
  offered by the green sector?
• Q18 Is there more we could be doing to help
  stimulate demand?
• Measuring impact
• Q19 Do you agree with our suggested approach a
  focus on measuring overall economic impact in
  terms of growth and sustainability?
• Q20 Can you suggest realistic alternatives for
  assessing the impact of the Green Jobs Strategy?

Source Partnership for a Better Scotland, 2006
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Research Priorities Decent Work and
Renewable Energies

• a. Governments role (labour courts,
  conciliation and arbitration, labour law
  oversight and enforcement, degree of autonomy of
  social actors)
• b. Business Governance ( renewed management
  practices of the labour force, Business Strategy
  which include socio environmental priorities, new
  business relation with local producer,impact
  assessment on regional development )
• c. Interests representation between capital and
  workers (interest representation structure,
  financing for organizations, types of employment
  contracts and contract rescission, employment
  standards)
• d. Conflict resolution model (company and union
  relationships, collective bargaining in labour
  negotiations, organization per work location)
• e. Employment, remuneration arrangements and
  working conditions (contract and labour costs,
  professional training, social benefits, working
  hours, kinds of remuneration, environmental
  rules)
• f. Social protection standards (financing
  mechanisms, income guarantee plans, job market
  entry and exit).
• Based on Creating Lasting Conditions for Income
  Distribution in Brazil
• Marcio Pochmann, 2007

23
References/resource institutions

• Values driven The World Council of Churches
  Climate Change Programme History, lessons and
  challenges http//www.wcc-coe.org
• Knowledge driven Joint Science Academies
  Statement Energy Sustainability and Security
  http//www.interacademycouncil.net
• Results driven CARING FOR CLIMATE THE
  BUSINESS LEADERSHIP PLATFORM A Statement by the
  Business Leaders of the UN Global Compact
  http//www.wbcsd.org
• Power driven G 8 CHAIR'S SUMMARY and Joint
  Statement by the German G8 Presidency and the
  Heads of State and/or Government of Brazil,
  China, India, Mexico and South Africa .
  Heiligendamm, 8 June 2007 http//www.g-8.de