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The Challenge of Green Job Creation: Can It Offset Fossil Fuel Job Redundancies?
Global warming and decarbonization both pose threats to existing job roles, but workers are willing to reskill in the face of the impending transition. They need help finding new opportunities.
This article is the second in a seven-article report: Why a Just Transition Matters.
This article is the second in a seven-article report: Why a Just Transition Matters.
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Key takeaway
76% of our Workforce Attitudes to the Net Zero Transition 2024 survey respondents were open to reskilling within their current role, but transferring from one industry to another is seen as more challenging. This is where training and financial support will make the difference.
Disorderly decarbonization — where jobs are at risk
The ongoing effects of global warming are endangering the livelihood of millions — if not billions — of people. And, in a double bind, taking action to combat this trend through decarbonization is having an impact on the job security of a sizable portion of the globe's population. Worldwide, 800 million jobs are at risk because of either climate change or decarbonization efforts — almost a quarter of the global workforce.
In Africa and the Asia Pacific — which includes India and China, the world's two most populous countries — more than 40% of the workforce is at risk, mainly because of these regions' high exposure to global warming. Meanwhile, in the Americas, 27% of all jobs are endangered due to the decarbonization efforts underway in some sectors.1
Around the world, two main job types are at risk in the coming decades: those in emissions-intensive sectors and those in climate-reliant industries. As a consequence of both physical climate threats and transition-related risks, the most exposed sectors are agriculture, energy and power, heavy industry and manufacturing, transportation, and construction.2
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The transition to net zero will, however, create new opportunities. In the updated Net Zero Emissions by 2050 Scenario, 30 million new clean energy jobs are expected to be created by 2030.3
However, there could be a mismatch between when and where new jobs are created and where redundancies are occurring. As a result, new opportunities don't automatically offset the jobs lost.
Disorderly scenarios make it harder for fossil fuel companies to pivot to renewables. New industries don't automatically replace those lost in a region, and it can be difficult to uproot families and travel to where the work is available.
In January 2024 Gallagher polled over 1,500 semi-skilled workers around the world across sectors most exposed to the green transition, including oil and gas, mining, transportation, construction and agriculture. The study, Workforce Attitudes to the Net Zero Transition 2024, gauged workers' appetite for reskilling as part of the transition to net zero and found that mobility is a significant challenge for the workforce. This challenge suggests that new jobs in green industries aren't, on their own, sufficient to offset the redundancies that lie ahead.
In Europe, the 10 regions most exposed to decarbonization are, unsurprisingly, home to sizable hydrocarbon-related employment. This concentration of employment, together with their low adaptive capacity, could lead to the loss of up to 4.5% of all jobs in the respective regions before 2035.4
Employee attitudes about relocating and reskilling
For affected workers, finding new employment is far from straightforward. Overall, there is a general willingness by employees to reskill to a new role within their current industry (76%), or even into a new industry (71%). There is, however, more resistance to moving location for a new role (30%). But the findings on this are nuanced, with India (48%) and Brazil (42%) showing far more appetite for moving for work than countries in Europe (26%) and North America (28%), as well as Australia and New Zealand (27%).
Those working in mining, oil and gas, or construction demonstrated the most openness towards reskilling for a role in a new industry.
However, despite the general appetite for reskilling to a new industry, employees do not think it will be straightforward. Over half of respondents thought it would be easier to reskill for roles within their current industry than for roles in a different industry sector (41%). When asked to consider which industries they'd be most happy transitioning into, respondents indicated that technology, renewables and nuclear energy, IT/computing and manufacturing were the most popular choices.
Perhaps unsurprisingly, younger workers exhibit the greatest appetite to reskill, being further away from retirement and more likely to have young, dependent children.
Over three-quarters of respondents ages 18-54 were open or very open to reskilling within their current role. However, attitudes towards reskilling were also quite strong in the older age group, with 65% of those aged 55 and above receptive to reskilling.
The clear appetite for reskilling means companies, governments and other key stakeholders can work together to leverage the adaptiveness among workers at the frontline of the transition to retrain and upskill for new roles.
Read the next article in this series: How Reskilling Can Support the Transition to Net Zero
View all articles in this series
Published December 2024
Sources
1"Work Toward Net Zero — the Rise of the Green Collar Workforce in a Just Transition," Deloitte, Nov 2022. PDF File.
2Mekala, Krishnan et al. "Sectors Are Unevenly Exposed in the Net-Zero Transition," McKinsey Sustainability, 25 Jan 2022.
3"Net Zero Emissions by 2050 Scenario (NZE)," IEA, accessed 26 Aug 2024.
4Mc Dowall, Will et al. "Mapping Regional Vulnerability in Europe's Energy Transition: Development and Application of an Indicator to Assess Declining Employment in Four Carbon-Intensive Industries," Springer, 20 Jan 2023.