Net-zero Economy, Net Economic Benefits: The green future of skills, jobs and infrastructure

What can countries do today to spur a green and inclusive transition? Banner image: Shutterstock/Jacob Lund
Net-zero Economy, Net Economic Benefits: The green future of skills, jobs and infrastructure

This article is part of a series in which OECD experts and thought leaders — from around the world and all parts of society — address the COVID-19 crisis, discussing and developing solutions now and for the future. Aiming to foster the fruitful exchange of expertise and perspectives across fields to help us rise to this critical challenge, opinions expressed do not necessarily represent the views of the OECD.

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As world leaders prepare to meet in Glasgow for COP26 in November to discuss strategies for global decarbonisation, many face significant economic challenges as their countries grapple with the COVID-19 pandemic. Unemployment rates remain stubbornly high even in highly vaccinated countries, supply chains are still disrupted in many key industries, and growth has stalled in many developed nations.

Fortunately, research demonstrates that transitioning to a net-zero economy produces strong net economic benefits, creating jobs across a wide range of occupational skill sets, industries and regions. These jobs, fueled by public and private investment in renewable electricity generation and grid modernisation, renewable and synthetic fuels, energy efficiency and building electrification, and zero emission vehicles and supporting infrastructure, are accessible, pay higher than average wages, and can present new opportunities for communities that have suffered from disconnection and disinvestment to the historical energy economy.

One significant challenge, however, is identifying and preparing workers for these new opportunities. Unlike prior major investment initiatives, at least in the United States, industries such as construction and manufacturing—the two biggest short-term job creators in the energy transition—are facing worker shortages. Already, too few people are applying for open positions, and too few of those have the skills and experience to get to work quickly on a job site or factory floor. At the same time, historic segregation in the United States has led to restricted access for too many, including women and people of colour, leading to inequality and lack of diversity in the applicant pool. Not unrelatedly, employment outcomes for women and people of colour have been much more negative since the beginning of the pandemic.

Solving this workforce challenge requires creative solutions specifically targeted and focused on exposure, localisation, innovation and just transitions. Of course, equity must play a central and crosscutting role in all programmes, ensuring equal, meaningful access for people and communities who have been historically left out of the economic benefits of the energy sector.

The first suite of solutions must focus on exposure to clean energy technologies and career opportunities. This includes regional planning and research to understand the projected demand for jobs by role so that solutions can be fit for purpose. Additionally, more information is needed about the types of jobs and roles that will be created via decarbonisation, what pre-requisites, education, training or certifications are required or preferred, and the quality and mobility of the jobs. This information should be communicated for both short-term transitions and students, from preschool through to university programmes, to ensure a long-term pathway to employment opportunity. Critical to this effort is demonstrating accessible pathways to opportunities that meet people where they are, regardless of where they live or what their education and professional backgrounds may be; this includes inviting the organisations that have the experience and track record of serving their communities to the table.

Find more on the Forum Network: Building beyond the Bust: How skills in the fossil fuel sector can create the net-zero economy, by Luisa Da Silva
Executive Director, Iron & Earth 

The energy transition provides new opportunities to develop and expand local supply chains, which can create accessible manufacturing and service sector jobs to support deployment. In order to maximise local impacts, communities need to think regionally and understand their assets—in human capital, defined as the skillsets and talent available in the local labour pool—as well as training and education centers. A regional approach allows communities to focus on their core strengths and target resources, training and reskilling programmes in the most efficient and effective way possible.

The demand for talent that will fuel the energy transition will not only include deployment and production jobs. In fact, many of the most aggressive decarbonisation goals are operating at the very edge of technical feasibility. As a result, global leaders will need to invest heavily in the next generation of innovators: university and graduate students, professors and collaborations between public and private laboratories and benches. Effective strategies include creating innovative collegiate internship programmes—such as those offered by the Massachusetts Clean Energy Center, the New York State Energy Research Development Authority or the Rhode Island Office of Energy Resources—which provide students experience working at innovation companies, as well as academic challenges, hackathons and other competitions to spur clean tech investment.

Innovative new programmes can offer a variety of benefits to local economies and workers. One novel idea gaining traction in the United States is to repurpose existing weatherproofing and building envelope programmes as on-the-job training, apprenticeship readiness programmes for higher paying construction trades. Such programmes can provide classroom and simulated training, led in co-ordination with local labour unions to understand preferences and prerequisites, as well as on-the-job, construction-related experience focused on building shell, insulation, air sealing and other energy efficiency related activities. Revenues from these activities can fund the training and provide workers with wages as they prepare for their construction trade of choice. Such a programme can be especially impactful if it focuses on identifying workers that have lost their jobs due to the COVID-19 pandemic, live in under-represented, disinvested communities, and/or have existing barriers to employment.

A transition to a net-zero economy will require significant global infrastructure investments that will spur job creation and positive economic activity. At a time of key supply chain and talent shortages, effective talent development is needed to ensure continued economic growth, expand opportunities for the unemployed and lift communities that have yet to benefit fully in the economic recovery. To do so, governments must be creative and thoughtful about understanding their supply and demand needs, and meaningfully invest in programmes that can serve people who are likely to lack skills and experience related to the energy sector, as well as barriers to employment. These investments will require more sustained funding and time, but are necessary to meet the objectives of decarbonising the global economy while providing meaningful, high-wage employment to drive the transition. 

Lear more about the green skills in the 2021 joint Cedefop/OECD symposium: Apprenticeships for greener economies and societies:

Find more information on countries' Covid-19 recovery spending environmental impact in the OECD Green Recovery database

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