Europe’s industry and the ecological transition

Tackling deindustrialisation and degradation requires not a technological fix but a political alternative.

In a context of ever-growing inequality, energy prices have been on everyone’s lips over the past year. Even in a rich continent such as Europe, there has been widespread concern about how much low-income households must spend on their bills.

A related worry is the impact of the energy crisis on industry and thus on manufacturing jobs. On the one hand, reliance on catastrophically dirty fossil fuels means that factories are now exposed to massive cost hikes. On the other, the adoption of renewable energy implies large-scale economic restructuring, including the destruction of many existing jobs and increased demand for several raw materials.

‘Noxious deindustrialisation’

It is hardly any consolation but the environment and manufacturing employment have been battered for quite a while, so that we are merely seeing a deepening of prior trends. The paradox of ‘noxious deindustrialisation’ (ND)—where employment is lost while polluting industries remain in operation—is a global reality and Europe is no exception.

Over the last two decades, according to the International Labour Organization, the share of manufacturing in total employment in the European Union has fallen from 24 per cent to 15 per cent (having been much higher in the 1970s). Despite this fall, and despite better technological standards, the ecological crisis caused by industrial production has worsened, due to growth in material outputs and the cumulative nature of environmental degradation.

A mapping of European industrial pollution and its socio-economic effects shows that ND is uneven. The naturalisation of the ‘right to pollute’, based on economic power, maintains and reinforces a geography of left-behind places where social deprivation and exposure to noxious pollutants go hand in hand, entrenching spatial injustice. Places such as Taranto in southern Italy or Lusatia in east Germany share the experience of productive and social lock-in, leading to regional abandonment.

This process is driven by loss of employment through deindustrialisation coupled with sustained toxic harm from industrial activity, such as steel production or lignite-fired power plants. It has however more than one face. Two distinctive patterns—of ‘grey’ and ‘green’ ND—emerge from the data.

Lack of investment

Technological upgrading ranges from limited end-of-pipe adjustments to profound changes involving a reorganisation of productive systems and inputs. Grey ND occurs around factories characterised by a lack of investment in the best available technologies needed to reduce pollutant emissions. Industries with sticky, backward technologies pollute more but displace fewer factory workers—grey ND is more noxious but less deindustrialising than green.

Yet deindustrialisation it is nonetheless, as in such regions there is still a decline in the share of manufacturing employment from its historical peak. This may be partly due to offshoring to lower-wage countries. But, to the extent that noxious factories remain in place, it is explained by the fact that even laggard technological change has sizeable labour-saving impacts over decades.

Still today, many left-behind places depend on heavy industries processing metals, minerals, coal and other raw materials with outdated technologies. Grey ND areas tend to be located in the lowest income regions, often specialise in polluting, scantly diversified and low-complexity industries and typically have low capital-labour ratios, which makes adoption of clean-technology innovations less profitable. The major polluters are often within-sector, low-efficiency outliers.

In such places, dirty factories have a positive impact on employment and wages in manufacturing but a negative one on the regional labour market. These areas find themselves locked in their poor economic trajectories, suffering a heavily impaired environment due to sustained pollution. Dependence on noxious industrial specialisation makes the manufacturing workforce reliant on toxic and decaying plants. Lack of alternatives leads workers and their families to move away: grey ND areas are marked by strong out-migration.

Taranto is a dire case of grey ND. The local share of manufacturing in employment stood at 37 per cent in 1971; four decades later, this had slumped to 16 per cent. Yet Taranto’s Ex ILVA steelworks still operates, with obsolete machinery, amid higher-than-average incidences of cancer and other pathologies. The Taranto population has thus faced both toxic pollution from active factories and a decline in factory jobs. Because such industrial activity has however hindered creation of alternative employment, much of the workforce still depends on Ex ILVA for a living.

Cutting-edge

Green ND takes place around toxic industries endowed with cutting-edge technologies. Here pollution is slashed—but so are the factory jobs, as green technology is often substantially labour-saving. Green ND is thus less noxious but more deindustrialising than grey. There are though positive spillovers to the overall regional economy, thanks to innovation, diversification and more ‘green’ jobs.

Nonetheless, green ND is still noxious. There are industries—such as fossil fuels—which are simply unsustainable, regardless of whether they use the best available technologies. Green technological fixes may be inadequate to offset the cumulative nature of environmental degradation. And efficiency gains in a mode of production predicated on infinite commodity growth are frustrated by ‘Jevons paradox’ rebound effects: more efficiency does not result in less consumption, because—as prices fall—demand grows and so does material output.

The Ruhr area, once a complex industrial growth pole specialising in coal, iron and steel, is in many respects exemplary of green ND. As the mines closed and steel markets became more competitive, thousands of blue-collar jobs vanished, yet such losses were offset by successful conversion of production. The Ruhr was transformed into a knowledge-based hub of renewed industries and expertise, with significant employment in environmental-technology research and development, and it has often been touted as a prototype of low-carbon energy transitions.

This narrative however conceals strong intra-regional disparities, as economic revitalisation and diversification have not been universal. And many unsustainable industrial complexes, especially in energy and steel, are still operating.

‘Just transition’

Green and grey ND occur with varying intensity and ‘purity’ in different localities and sometimes elements coexist. No doubt, green ND is preferable because it delivers better health and environmental outcomes. While factory jobs are lost, economic reconversion and reskilling can, if successful, generate better-paid and less-noxious employment in knowledge-intensive services and high-technology industries. The jobs-environment dilemma is not inescapable.

The crux of shifting from grey to green ND is ensuring a ‘just transition’ for the blue-collar workers who risk unemployment because of cleaner and labour-saving technologies, as environmental and labour efficiencies usually come in tandem. Just transitions in left-behind places require the participation of stakeholders—particularly trade unions and community organisations—as well as compensatory redistribution for those otherwise displaced by environmental policy.

Yet the ‘noxious’ in green ND remains the problem. It pollutes less than grey but this does not mean that technological fixes are sufficient per se to tackle the ecological crisis. Ultimately, green ND is the industrial-policy manifestation of ‘green capitalism’, whose limitations it shares. The most crucial is that no technology can erase the noxiousness of ever-growing commodity production.

For example, electrification is the emblem of the green-capitalist quest to reach ‘net zero’ greenhouse-gas emissions by 2050. Yet digitalisation and decarbonisation are causing an explosion in the demand for metals. From a global perspective, if the status quo of neocolonial extractivism and wage divergence persists, the outcome will be a thoroughly unsustainable deepening of productivism and inequality—albeit with lower carbon-dioxide emissions, perhaps.

In sum, the transformations required to move beyond the ecological crisis concern not only technology but also the social relations in which it is embedded. This entails mobilisations from below, capable of redistributing wealth while pushing back the frontiers of commodification of production and nature. As working-class people are those most affected by pollution and its impact on labour markets, they have a potential material interest in developing the ‘ecological class consciousness’ needed to advance such changes.

Charlotte Bez

Charlotte Bez is a postdoctoral fellow at the FutureLab CERES at Potsdam Institute for Climate Impact Research (PIK) and MCC Berlin. Her research focuses on the political and economic obstacles to transitions and how marginalised communities are disproportionally affected by pollution.

Lorenzo Feltrin

Lorenzo Feltrin is a Leverhulme early-career fellow at the University of Birmingham. His main interest is the relationship between labour and political ecology.