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If Madrid steps up its game in green building policies, it could spark a boom in job creation and tackle climate change
Brussels’ green light to Madrid’s recovery plan is good news for Spanish workers. The EU loans and grants should help spur growth, generate jobs and alleviate a worsening social crisis.
As the country also eases COVID-19 restrictions, stimulus combined with climate policies to renovate buildings could be the best chance Spain has to jump-start the construction sector - and in turn, secure a return to prosperity.
Spain’s youth unemployment is the highest in the EU, with almost 40% of under 25s without a job. Among Spaniards who have a job, precarity is the new normal, with a quarter having an unstable temporary work contract. Inevitably, this leads to social inequality: a quarter of the population is at risk of poverty and social exclusion. More than 550,000 people remain furloughed.
Spain’s jobs recovery could hinge on the construction sector. The Spanish Government’s plans for EU COVID-19 recovery cash have the potential to boost employment in this sector, which is already registering activity growth and an increase of job vacancies. Spain wants to spend nearly 10% - €6.8 billion - of the €72 billion it plans to mobilise between 2021 and 2023 to renovate its ageing building stock.
But such stimulus alone might be not enough in itself to create a stable renovation market and, consequently, a robust construction sector with quality jobs.
Construction workers have been hard hit by the multiple turbulent periods that have dogged the industry for years. The 2008 financial crisis cut more than 1.5 million construction jobs, which have never been recovered fully. The COVID-19 pandemic dealt it a new blow when construction was shut down, affecting workers with temporary contracts, under-30s and women the most.
Yet, if Madrid were to succeed in delivering a truly green building revolution, the long-term benefits for construction workers and the overall Spanish economy would be immense.
Buildings are responsible for emitting large proportions of greenhouse gas emissions, and the majority of buildings will still be standing in a decade or two: so decarbonising buildings is an essential component of climate action.
Governments will have to design measures, provide financial support and offer technical advice to incentivise citizens to make their homes more sustainable. Increased demand for energy efficiency improvements (such as the replacement of windows and insulation of the facade, floors or roof) and for switching to clean heating and cooling systems will, in turn, require more construction workers.
Right now, Spain ranks at the bottom of EU countries on building renovation rates, with only around 30,000 homes made energy-efficient each year. Its building recovery plans were developed before the EU set out its plans to cut at least 55% of emissions by 2030. But that commitment means that a huge 60% of greenhouse gas emitted from EU buildings will need to be cut in the next decade. It’s clear that Madrid needs to step up its game.
The Spanish government has until November this year to draw up a plan for boosting energy efficiency improvements that could bring greenhouse gas emissions from buildings to zero by 2050. With this plan, Madrid can take climate action and give people more comfortable and healthier homes, while creating millions of green jobs.
A study from the Spanish Union Institute of Work, Environment and Health found that renovating 2.8 million homes by 2030 will create over 460,000 new jobs annually. For each direct job in the construction sector, more than two new indirect and induced jobs would be generated.
A level of ambition on this scale would mean double the number of homes renovated compared to the current plan, and would bring Spain closer to what’s needed to align with the Paris Agreement. A long-term plan to renovate 15.5 million buildings by 2050 would mean Spain could cut its building emissions to close to zero, while delivering a stable construction sector and quality employment.
That makes the construction sector an excellent choice to be first in the line for stimulus policies - and the results it could generate are striking. A €12 billion public investment in building retrofitting over the next decade would mean the construction sector can contribute 1.3% to GDP.
Better quality homes mean better quality lives, and this level of renovation would mean around 227,000 people would likely to avoid the cardiovascular issues associated with cold or damp homes. By 2030, the energy saved would be equivalent to the consumption of 1.7 million households, which will translate into lower energy bills for consumers.
If Madrid implements an ambitious housing renovation plan as part of its recovery efforts, it will rebuild Spain to be stronger and more resilient. Investing in cleaner, greener, more comfortable homes is an opportunity for Spain’s economy and society that shouldn’t be missed.
Begoña María-Tomé Gil coordinates the climate change and energy department at the Spanish Union Institute of Work, Environment and Health (ISTAS) and she is the co-founder of the think tank Fundación Renovables.