The Green Transition: A Positive Net Job Growth on a Global Level

A recent e-book by Ernst & Young (EY), titled "The Green Transition," delves into how the global shift toward a fossil-free future and a just and equitable transition will drive economic growth and reshape the jobs landscape.

To gain a clearer picture of the potential economic impacts in the coming years, EY collaborated with Politecnico di Milano to develop a model projecting the potential value and effects of the green transition. The study examines various scenarios based on governments’ Nationally Determined Contributions (NDCs) to achieving the 1.5-degree Celsius target set by the 2015 Paris Agreement. It explores the implications for GDP and job growth over the next 30 years.

This article focuses primarily on emerging job trends. The global transition away from fossil fuels will trigger fundamental changes in the job market, creating new opportunities in the green economy while rendering many roles in fossil-based industries and dependent sectors obsolete.

Jobs directly associated with fossil fuel production are expected to decline significantly. While the number of direct green jobs created in eco-industries will be fewer (46 million) compared to the 73 million fossil fuel jobs projected to be lost—largely due to the higher productivity of renewable energy—millions of additional “green jobs” will emerge along the value chains connected to these core green sectors. When factoring in these indirect green jobs, the overall impact on employment is expected to be positive, with net job growth estimated to increase by 120 to 151 million jobs, depending on the scenario.

However, the distribution of these changes will be uneven across regions. Several distinct clusters can be identified:

1. The first cluster includes the EU27, the UK, China, and, to a lesser extent, the US. In these regions, a shrinking labor force will coincide with increasing demand for green jobs and skills. As a result, some green job vacancies may go unfilled domestically, necessitating talent from other regions.
2. The second cluster consists of the Middle East and, to a lesser extent, Australia. These areas are projected to be the most adversely affected due to their heavy reliance on fossil fuel supply chains and trade.
3. The third cluster comprises India, Southeast Asia, and Africa. India and Southeast Asia are expected to maintain steady employment levels through 2040, with improvements anticipated between 2040 and 2050. Africa, however, is likely to experience a significant decline in employment until 2035 before seeing gradual improvements.

The energy sector is already witnessing this transition. Upskilling and reskilling will be vital for businesses as they adapt their models, ensuring they can attract and retain talent equipped with the necessary green skills.

Governments will play a crucial role in ensuring a just transition by balancing the social impacts of fossil fuel job losses with the growth of green employment. This requires targeted investments, preparation for a new employment landscape, and the provision of training and capacity-building programs through enhanced collaboration.

In conclusion, while the green transition will result in the loss of many fossil fuel-related jobs, overall employment in the green economy will rise. However, regions heavily dependent on the fossil fuel sector may take longer to realize the benefits of green job growth.