Last April, the Intergovernmental Panel on Climate Change (IPCC) released a spine-chilling report. Though the UN body has been calling governments and institutions to act swiftly against the climate crisis for many years, the latest report presents a much greater sense of urgency. According to IPCC, to give the world a chance of limiting future heating to 1.5C above pre-industrial levels, greenhouse gas emissions must peak by 2025. There’s still hope to stave off the worst outcomes of the climate crisis, but that window is now inexorably closing. UN secretary-general Antonio Gutierres warned that the world “was on a fast track to climate disaster.”
Several countries in the last few years have made significant pledges, the U.S. and the U.K. aim to achieve net-zero emissions by 2050, while the EU aims to reduce carbon emissions by 55% by 2030. Though scientists point out that such pledges might not be ambitious enough, their effect on the economy is already evident. Global sustainable investments totaled $35.3 trillion at the start of 2020, and the European Union alone has committed to mobilize at least €1 trillion in sustainable investment inside Europe by 2030, while clean energy innovation investments account for almost 28% of the budget value in the United States.
the net-zero economy is already here
For this reason, a reshuffle of the global economy is already underway, and shouldn’t be considered a future occurrence. Jobs in the fossil-fuel sector are estimated to fall from 12.6 million in 2020 to 3.1 million by 2050, with about 80% of the job losses related to oil, gas and coal extraction. Despite the steadfast transition to electric vehicles, the automotive industry will probably go through a significant downsize as well: in Germany, Europe’s top automotive market, the transition to electric vehicles (EV) could lead to estimated employment losses of between 35 and 62% by 2030.
The development of a net-zero economy will have a huge impact on the job market in the next 5 – 10 years, but there are relatively few reports that try to assess which sectors and careers will see the largest growth. And, based on research conducted by Randstad’s Market Intelligence team, the market size of the global green economy is projected to reach $7 trillion by 2030. It has already become the fifth largest sector in terms of market capitalization.
For this study Randstad Market Intelligence has aggregated existing studies and papers, developing its own forecasts when no specific data was available. For instance, in order to estimate jobs/demand of the solar energy industry, it calculated the number of jobs per megawatt using the solar capacity data, keeping into consideration the average efficiency growth rate. Then, the estimated number of jobs were determined using the jobs per capacity data and the estimated future capacity.
where the green jobs are
According to the research, significant demand growth is predicted in jobs related to renewable energy, sustainable infrastructure, energy efficiency and insulation, and the circular economy. Numbers are indeed staggering: the demand for talent in the solar energy sector is expected to increase by 500% in India. Similarly, wind and energy-related jobs are predicted to grow by 123% in the EU, and 168% in the United Kingdom. While based on economic transformation scenarios, the circular economy in the next 10 years could create 14 million jobs in India.
new green industries are yet to come
Of course, new green technologies could add up to the abovementioned industries and determine an even greater demand for professionals and unskilled workers. In the U.K., a chemical plant is ready to start carbon capture rollout, but the currently prohibitive cost of this technology makes it hard to produce reliable forecasts. Instead, in other new markets such as plant-based foods, it’s safe to predict healthy growth. The concern toward industrial farming and its environmental impact is making a more flexitarian diet widely popular in Western countries. Heura food, a Spanish meat alternative manufacturer, reported a year-on-year sales increase of 333% in 2021.
The market could make up to 7.7% of the global protein market by 2030, with a value of over $162 billion, especially if cultivated meat startups will be able to scale up the production and provide affordable meat just by directly cultivating animal cells. According to a McKinsey report, for every 500,000 metric tons of cultivated protein, 5,000 to 5,500 factory jobs are likely needed, which is about the same number of production jobs necessary to produce protein through conventional methods. Yet, compared to the workforce employed in the conventional meat industry, very different skills will be needed.
the importance of governmental policies
NextGenerationEU Fund, the initiative to support member states adversely impacted by the COVID-19 pandemic, requires members to allocate at least 37% of all national recovery and resilience plans to climate-positive initiatives. Such governmental policies and state programs will be a key factor in the creation of green jobs.
Thanks to a scheme introduced in July last year, the Italian government pays 110% of the cost of turning buildings green, from insulation to solar panels to replacing old-fashioned boilers and window fittings. Italy's council of engineers estimates it has boosted gross domestic product (GDP) by 0.7% in 2021 and created 153,000 jobs.
“The fact is, money is not the problem at the moment. There is more funding out there than people that can actually make the energy transition happen” says Joost Heins, vice president at the Intelligence department at Randstad. For this reason, Heins believes it’s crucial for employers and governments to work together to bridge the gap between demand and supply for talent.
the war in Ukraine
2022 was widely expected to be the year when the economy got back to its pre-pandemic level, but the Russian invasion of Ukraine changed the picture dramatically. For many European leaders today the challenge is severing their dependence on Russian energy while accelerating the fight against the climate crisis.
On this issue, U.N. Secretary-General Antonio Guterres has said that instead of countries “hitting the brakes” on the decarbonization of the global economy, “now is the time to put the pedal to the metal towards a renewable energy future.” Unfortunately, things are not so easy, especially for countries heavily reliant on Russian oil and gas. EU’s climate chief, Frans Timmermans, admitted that using less natural gas in a transitional phase would mean “you might use coal a bit longer — that has a negative impact on your emissions.”
But despite the generalized energy insecurity, the hope is that as a side effect, the conflict will speed up the introduction of renewables, and reverse the negative effect of sticking a bit longer to coal.
a million dollar question
From an HR perspective, how can we get ready for these changes in the job market and cap this opportunity? Heins is convinced that a lot of people are currently trying to work in this field, an impression that is backed already by some studies.
“Companies need to be aware that people might be the actual scarce factor of production, and financial means might not be enough to attract these workers.” In other words, with the green jobs industry growing exponentially, in the next 5 to 10 years we might face green talent scarcity.
To deal with it, employers will need to get creative. “Can you reskill your own people? Can you train people that might not have the perfect background? These are the questions we should start thinking about.”