The shift to net zero will necessitate substantial adaptation measures, particularly in the labor market. Industries with high emissions will experience job losses, while opportunities will emerge in low-emission sectors. The transition of workers from heavily polluting industries to other sectors is especially challenging, as these industries account for 7% of the total workforce and require specialized skills. ‘Retraining’ will be essential otherwise workers may face wage losses.
Currently, about 20% of the labor force in OECD countries is engaged in environmentally driven occupations, a figure that is expected to rise in order to meet established targets. These emerging green jobs will demand enhanced skills, largely associated with the knowledge economy and critical thinking. Industries focusing on the development of sustainable technologies are expected to undergo significant expansion, contributing to environmentally friendly production. Moreover, traditional job responsibilities are anticipated to evolve as practices become more environmentally sustainable.
The report provides insights into several ways policymakers can facilitate this transition, including the implementation of income-support programs, wage insurance, and effective training initiatives. It is imperative to consider the impact of changing climate conditions, such as intensified heat waves, on labor demand in specific industries. Furthermore, addressing the issue of rising inequality is paramount. Recent carbon pricing reforms are likely to disproportionally affect low-income households, which allocate a significant portion of their income to essential goods such as energy and food. Implementing revenue transfers and supportive policies can help mitigate the potential impact of these reforms.
