Climate change’s impact on work, skills and labor markets
The impact that climate change will have on jobs and labor markets globally is just beginning to pan out.
Much of the current discussion around how climate change impacts employment focuses on the creation of new “climate jobs” and the need to rapidly fill them. This is critical, and essential to a green and just transition. From sustainability officers at corporations to engineers and contractors who can build and repair climate-smart hardware, data scientists who can build novel models to forecast weather conditions and lawyers who understand complex transactions around carbon capture technologies, the types of jobs and skills grow apace.
However, while we need tens of millions (conservative estimate) of skilled professionals working on climate-related issues worldwide, there are other facets to the equation. Beyond being a job creator, climate change will also destroy jobs, fundamentally change others, and also lead to massive displacement and disruption of livelihoods.
It will have a mixed bag of results on how we work and learn. Working in and on a warming planet will create new opportunities just like it will create new risks, and we need to be ready for them.
Climate change as a job creator
Climate finance and technology development are already creating jobs. The International Labour Organization has estimated that implementing the Paris Agreement could create 24 million new jobs by 2030, particularly in renewable energy, energy efficiency and sustainable transportation. This may indeed be an underestimate – in 2022, the renewable energy sector alone employed 13.7 million people worldwide. In fact, in that same year, job creation in the United States’ clean energy space outpaced overall employment growth, at a rate of 3.9%.
However, jobs are appearing beyond the usual suspect sectors. For example, climate-resilient infrastructure projects – e.g. building flood defenses, upgrading transportation systems, and retrofitting buildings – are driving demand for construction experts, urban designers and environmental consultants, among many other roles. Corporations and governments at the local and national levels are hiring as well – developing and implementing new climate policies will require professionals in a range of fields from environmental law, policy analysis, sustainability officers and environmental compliance specialists. The finance sector as well – banks, asset managers, insurance companies, etc. – are recruiting experts in climate finance as well as ESG analysis and sustainable portfolio management.
Both decarbonizing the economy, as well as building a more resilient one that adapts to the realities of a warming planet, give way to enormous employment opportunities. And in some cases the demand of clean technology adoption is outpacing availability of skills. The UK, for instance, is facing a shortage of technical professionals needed to install heat pumps and will need to train thousands of workers annually to meet demands. Glass half full, these shortfalls signifies the enormous and growing opportunity for green jobs worldwide.
Climate change as a job destroyer.
However, while both climate mitigation and adaptation efforts are catalyzing millions of new jobs, climate change has and will continue to destroy jobs.
One driver of job loss comes from a warming planet damaging natural and physical infrastructure. Case in point – in 2023 Morocco lost over 200,000 agriculture jobs due to intense draughts in the country. The agriculture sector in Morocco is a critical employer, particularly for women, who represent over 50% of the sector’s labor force, domestically. Similarly, wildfires, pest infestations, and changing forest ecosystems due to climate change can create mass disruption in the forestry sector, which can lead to reduced timber harvests and subsequent job loss. By the same token, rising sea levels and erosion of coastal areas can negatively impact tourism industries, while other types of extreme weather events could damage critical infrastructure and supply chains, leading to delays in production and creating unstable conditions for employees. These negative impacts can have far-reaching ripple effects, initially appearing as a localized risk that gradually hurts other areas of the economy, chipping away at livelihoods and stability.
The other key driver of job loss is, ironically, the green transition itself. For instance, in the United States, coal mining employment has been in decline for years as fossil fuels are phased out. And the American transportation sector could suffer a net loss of upwards of 2 million jobs by 2035, triggered by the move from internal combustion engines to electric vehicles. Globally, the fossil fuel industry could lose an estimated 7 million jobs by 2030. And there are of course many adjacent industries and workers that rely on fossil fuel production – global supply chains, manufacturing, retail and service sectors are highly interconnected and jobs in these areas may be at risk.
Any just transition will need to account for not simply jobs gained, but jobs lost as well, and it will not be seamless. Workers who lose their jobs will need safety nets and job transition support, particularly if they require re-skilling and are faced with long waiting periods without incomes. Employee protection will be critical in these situations, particularly in the most vulnerable geographies – e.g. Africa is expected to suffer some of the globe’s most acute labor productivity reductions due to heat-related job loss, and three quarters of the continent’s population does not have legal health protection.
Climate change will evolve jobs
Some say that “every job is a climate job“. Even if the topics of climate, sustainability or the environment do not appear in your job title or work description, climate change could force you to change the way you work.
For example, farm workers may turn to robotics to help with carrying out jobs on farms as temperatures rise and prolonged exposure to heat will threaten their well-being. Similarly, doctors, nurses and other medical professionals will likely need more training to treat climate-related health issues – e.g. heat-related illnesses, respiratory problems and vector-borne diseases among others. Less obvious evolutions in how we work can be seen in the technology field, where an emphasis on energy efficiency of data centers and buildings themselves could cause coders to use green software – e.g. the Green Software Foundation is developing standards, tools, and best practices for green software development. By the same token, more and more architects, civil engineers and urban planners will need to incorporate climate responsive design practices to design buildings that can withstand extreme weather events, incorporating green spaces for urban cooling, and planning for sea-level rise in coastal areas. The insurance industry is also being asked to evolve its strategies and processes for pricing risk as it adapts to a warming planet, and fast – e.g. in the EU only roughly 25% of economic losses caused due to climate-related issues are insured.
In each of these cases, jobs are not necessarily being created or lost, but they’re changing. Employees and employers alike, as well as the education sector writ large, have a role to play in this equation. Regardless of whether or not these too are labeled as “climate jobs” climate is causing the nature of these jobs to evolve.
Labor Will Move En Masse
Last but not least, climate change has already ushered in, and will continue, to mass displacement and disruption of livelihoods, which can have temporary and permanent impact on labor. Migration both internally and across borders, is set to become a mainstay in a warming planet. There could be over 1 billion climate migrants by 2050. In 2022 alone, disasters drove approximately 32.6 million recorded internal displacements globally – the highest figure in over a decade. The United States, for example, has already seen several million climate migrants, while in parallel both developed and developing countries have been experiencing climate-caused displacement to growing degrees. This significant movement of people could have profound effects on the world of work and education – how do people plan their lives and take care of their families against the backdrop of a warming planet?
Globally, climate-linked migration could affect labor supply, potentially alleviating labor shortages in some sectors in destination countries while also creating challenges for workforce integration and social services access in others. Yes, an influx of talent can be a boon for a host community, and we have countless examples of how immigration can be a net gain for receiving cities and countries. However, there is no guarantee that incoming populations will have ample jobs waiting for them when they arrive.
We need to prepare now for these movements and transitions. If not managed correctly there is a risk of skill mismatches and retraining needs, as well as resource and housing shortages, which receiving cities will need help with. On the flip side, communities that are losing talent as people migrate away may risk their own economic losses. For example, if migrants move from rural to urban settings, the areas they leave behind could face labor shortages.
Where do we go from here?
We have overwhelming questions to answer: How do we upskill and channel talent to help in decarbonizing and adapting to a warming planet, while also creating the safety nets and transition opportunities for those who lose their jobs as climate impacts worsen? How do we do this equitably, particularly in the most vulnerable geographies?
While solving financing gaps may fall on financiers and financial institutions, shile solving financing gaps may fall on financiers and financial institutions, solving the education and jobs equation relies on actors across the public, private and non-profit sectors coming together. Arguably, our climate finance efforts will only take us so far if we do not provide and protect the human capital that will be implementing the projects, policies and solutions we need.
We often talk about climate finance and technology as drivers for building a new economy. One that is not just cleaner and greener, but more resilient and inclusive as well. This mindset paints climate change as a window of opportunity – a threat on one hand, but also a chance to rethink and rebuild how finite natural and humans resources are used.
The issues of work and skills are a common denominator across countries and societies. Political parties, countries, income classes, etc. can differ on any number of priorities, but jobs is usually one of the few things we all agree on. However, if we do not see the issue at hand holistically, and message it accordingly, no one will be happy.
As much as we need to optimize for the economic opportunities that climate change creates, we also need to be wary of the job loss and instability around employment that will accompany it. A failure to do so risks not simply building a less sustainable world, but a less equal and lower capacity one as well.
