Iceland’s Labour Minister: Challenges of a fair green transition must be faced together

We sat down with Guðbrandsson to discuss these and other priorities of Iceland’s Presidency.

Guðmundur Ingi Guðbrandsson says Iceland’s plan for the Nordic Council of Ministers has been very ambitious. 

“We have prepared this in an atmosphere that revolves around two factors. One is that the pandemic has just finished, and we are working our way out of all kinds of resulting consequences, for example in the labour market and socially.

“The other factor is Russia’s invasion of Ukraine which leads to an increased focus on peace in our leadership plan. Since the start of the invasion, other things have happened of course that increases the need to focus on peace. But Ukraine is closer to the Nordic countries and we’ve had cooperation in certain fields with Eastern European countries. 

“Now we, the Nordic cooperation ministers, have reduced cooperation with Russia but still have the possibility to support specific work there, for example humanitarian work.”

Focus on the climate and environment

Guðbrandsson says Iceland is also working on a special plan for how to adapt to big changes facing the labour market. The plan runs until next year. Guðbrandsson was previously the Minister of the Environment and before that a climate activist. So it comes as no surprise that climate change and the environment are big factors during the Presidency. 

“We have a special emphasis on a fair green transition which is covered in that plan, but we’re taking it to a higher level. We are preparing for a summit at the start of December where we use the Nordic labour market model as a role model. We are gathering representatives from everyone; the labour unions, the employers and the governments.” 

More on that meeting later.

Iceland is also working on improving inclusion in the labour market. 

“That means an open labour market for all. We are particularly focusing on disabled people and immigrants. I’ve worked on this a lot here in Iceland. And we’re also working on revaluing jobs in a gender-based labour market, which the office of the Prime Minister is supervising as a matter of equality.” 

Guðbrandsson adds two more of Iceland’s focus areas for Nordic cooperation. 

“Number one is research, especially when it comes to things that will clearly change soon in terms of the green transition and labour inclusion. We should focus on this to build a base for future policymaking. This is already ongoing. 

“Second, we should pay closer attention to people’s skills and how we can give them a better chance to increase and improve their skills so they can do the jobs that will change in the future, both because of technology and the green transition. There is a huge discussion about this in Europe.” 

“We can learn a lot from each other”

But back to the Reykjavik summit. Guðbrandsson says it has the potential to be a very important meeting.

“Each time you’re facing something new you will do it better when you bring more parties to the table, especially if you can do it in an international context. This summit will gather the labour unions, employers and governments in the same room.  

“That is very important because it’s clear we have to face the challenges of a fair green transition together, not only in order to enjoy the changes themselves but also to spread the burdens in a fair manner. This is in accordance with the Nordic countries’ common vision for the year 2030, where we aim for a green, competitive and socially sustainable Nordic region. 

“So I think it is very important to get some kind of a starting point with a good meeting with these parties. There we can turn to the main issues we have to face in terms of the green transition and how we address these as part of our cooperation. Much of this happens within each country, of course, but we can learn so much from each other as we have shown previously in our Nordic cooperation.

“I have to say I’ve been a minister for almost six years in two different ministries and in my view, at the core of Nordic cooperation is the exchange of views and learning from each other in order to strengthen our common values. This meeting is a very good venue to further this work.” 

Guðbrandsson says the biggest challenges with the green transition revolve around people’s skills.

“It’s important we realise what changes lie ahead. One of the things to consider is artificial intelligence, which will not make the task simpler. But it can also create opportunities to help us move things in the right direction.

“In my mind, we have to find ways to make sure the labour market has the necessary skills to face these changes and make sure people who either lose their jobs or face significant changes in their jobs get the chance to improve their skills.”

When asked, Guðbrandsson concedes that this is also something the educational system, run by the state, has to participate in. 

“We are therefore reviewing our secondary education system, and we expect a report in November. My goal is to put forward new legislation in parliament based on that.” 

Guðbrandsson adds that it is also important that the employers and the labour unions can agree on green solutions. He says a special ministerial committee on the Icelandic language is currently in session to discuss how to strengthen the position of the language, especially as a second language. That is important when you want to include immigrants in the labour market.

“It is crucial to support this development and important that this fits together.”

Transport and agriculture main challenges to carbon neutrality

Like many other countries, Iceland aims to be carbon neutral by 2040. Guðbrandsson says the biggest challenge facing Iceland is to finish the conversion to green energy.  

“Here we are mainly looking at fishing trawlers, road transport and aviation. Other factors in the energy conversion are on track, for example public transportation and private cars.”  

The other big challenge is agriculture. 

“Here we have to do better, not only in Iceland but in all of the Nordic countries. You can’t change enteric fermentation in cattle and sheep like you change engines in cars and planes. So emissions from livestock have to be reduced with different uses of fertiliser, for example. This relates to the condition of the Icelandic ecosystem and the destruction of land that has taken place. We have managed to improve that. But these are the main challenges.” 

Guðbrandsson says the goal is to keep on reducing CO2 emissions even after Iceland reaches carbon neutrality.  

“We can keep on doing that by reclaiming land and wetlands. That is what we should aim for while we reach for a better climate balance in the world.”

We end our interview by looking at what lies ahead for the Icelandic labour market. The short-term collective agreements signed at the end of last year expire in January and chances are that negotiations for new ones will be difficult since inflation and interest rates are high. 

“For me, it’s important to reach long-term agreements. They bring more stability to the economy since we know what to expect. I think it is clear that the state will bring something to the table to support the goal of long-term agreements. But they also have to support our efforts to lower inflation and interest rates because that’s what we all want, no matter who we represent. So the Central Bank, the state and the labour market all have to do what they can.”

Guðbrandsson says he wants to see an increase in the lowest salaries – either in the next agreements or later. 

“We have taken some steps in the past few years and I think the labour unions did a great job there. I also hope we can improve pay for women in certain jobs compared to that of men with similar education levels. This is what think is most important now.”