Navigating the Transition to a Green Economy

By Ludger Weller and Simon Schmid

We are facing a critical moment when it comes to climate change. The science is clear - to avoid the most devastating impacts, we need to limit global temperature rise to 1.5°C above pre-industrial levels. That means we have to get our greenhouse gas emissions as close to zero as possible. This is a massive challenge, but also a huge opportunity to transform the way we produce energy, what we consume, and how we navigate this global green transition.

Green vs brown jobs

The transition to a green economy will lead to an increase in demand for workers in green jobs, while workers in declining jobs are more likely to become obsolete (Kanders, et al., 2020). This conversation is complicated by issues around defining green and brown jobs, green tasks and/or skills. Here we use the term green job or green skill to denote jobs and skills that are likely to increase in demand due to the transition to a green economy, and declining jobs or declining skills to denote jobs and skills that are likely to decrease in demand. In our view, this definition is instructive as there will be jobs and skills that are not inherently green or polluting, but will become more or less necessary (expressed as a delta in demand) in a net-zero economy. 

A good example is the job of a powerline worker. Extending and repairing the grid is essential for electrification and building the grid capacity for renewables. However, the job of a linesworker is not affected by the power source, nor are any of the skills or tasks for lineworkers inherently green. Lineworker is a green job only in scenarios where an extended grid capacity is necessary and contributing to electrification and the use of renewable energy. Similarly, not all jobs that may be coded the same or contain the same, or similar skills and tasks are declining. Even within the narrow concept of jobs in underground mining, coal miners may be affected, while e.g., lithium miners will remain in-demand. The skill and task content of these jobs may be almost identical, however, their contribution to the green transition is diametrical - and so is the effect of the green transition on their demand. Other jobs that are clearly contributing to pollution currently have no substitute and will continue to exist.

Job losses in declining industries and job creation in commutable, green jobs are likely to be geographically, sectorally and socially concentrated (Vona et al., 2019). The human cost resulting from job losses and economically devastated regions are tremendous, as are the workforce demands of the green economy. Both pose immense challenges for governments, employers, trade unions and, most importantly, workers.

The case for skill profiling

In order to address this challenge and enable planning and action, a granular understanding of the impact of the green transition on labor demand and supply at the level of industries, occupations and skills is a necessity.

Skills are the smallest unit of analysis in the labor market. Focusing on skills enables a better understanding of people, employers and education providers that interact in the labor market. A better, regionally specific understanding of workers’ skills and the skill requirements of green and neutral jobs is essential in establishing pathways to continued employment and into green jobs. It is also essential in designing education and skilling, social protection, as well as industrial policy to support the accessibility of these pathways.

While traditional approaches to skill surveys can be work-intensive, time-consuming and expensive, digital skill profiling solutions offer the possibility of deploying skill surveys, based on established skill taxonomies and ontologies to determine the skill content of declining, changing, and green jobs. Skill profiling allows for determining the skill content of occupations that are likely to be in more and less demand, as well as capturing the skill delta at a granular level. Thus supplementing taxonomies and ontologies enables the use of a ‘skill-occupation matrix’ to transpose the impact of the green transition on an industry and occupation level to a change in skill supply (due to the skills of workers in declining occupations whose skills are ‘released’) and a change in skill demand (due to the skills required by green jobs increasing in demand).

Skill profiling and collecting data from individual workers can allow for regular and representative skill surveys for workers in sectors most affected by the green transition. With the benefit of regularly updated, individual level data, the impacts of the green transition can be analyzed at different levels of granularity while allowing for workers to access individual guidance, based on their specific transition scenario. Additionally, available data sources such as job vacancy boards and public employment service records should be combined to identify trends in demand for green occupations. Up- and reskilling content should be cataloged to identify gaps in curricula and build a worker/learner focused education environment.

Regional and local labor markets are the battleground where the green transition will succeed or fail. Equipping governments, educational institutions, trade unions, employers, workers, and all other stakeholders with the relevant, local labor market data to make informed decisions will be essential in making the transition just and equitable.

Understanding the skill supply and skill needs of green, neutral and declining jobs is not only crucial to design education and training, but also essential to inform industrial policy. Encouraging industries that are complementary to the skills of an obsolete workforce to move and settle in affected geographies is a critical tool to encourage a just transition. Further, understanding the skill supply of an area can be useful information for employers in need of a green workforce. A focus on skills can serve as the universal language that facilitates communication, coordination, and alignment among different stakeholders - crucial for achieving a successful transition.

This is a summary of an article that was originally published in Pathways of Greening Labour Markets: Opportunities and Challenges for Regional and Local Labour Market Observation in Europe and Beyond:

https://www.nomos-elibrary.de/10.5771/9783957104236/pathways-of-greening-labour-markets