Limiting global warming to below 2°C necessitates large-scale investments - this requires an appropriately skilled workforce to deliver and operate them. A workforce that lacks the right skills could harm our chances of achieving the low-carbon transition in time. This report highlights three mechanisms that may drive the change in skills demand i) in existing occupations, low carbon transition will require updating skills to match changing job profiles ii) in new occupations, new skills profiles will be demanded iii) within declining value chains workers will need to update their skills to move to new occupations. It finds that the global workforce already has the fundamental skills to deliver low carbon transition with 83 per cent of the skills available today however highlights a potential gap in technical and engineering skills which may impede the transition.

This study offers the first global quantification of the potential skills needs and gaps of four sectoral transitions: low carbon construction, the electrification of transport, low carbon electricity, and sustainable land use and forestry. These four labour intensive sectors were chosen as they account for over three quarters of global emissions abatement needed over the next two decades in most scenarios1. The analysis includes both global and disaggregated results across seven regions: Africa, Asia-Pacific, Central and Latin America, Eurasia, Europe, North America, and the Middle East.

As we transition to a low carbon economy, two objectives of policymakers are managing the transition to green jobs and promoting green economic growth. Both objectives require a good understanding of transition skills and how these will evolve short and long term. The analysis sets out to quantify the transition skills gap and provide recommendations to policymakers for resolving it. Focusing on the four labour intensive sectors, it quantifies the employment impacts and the skills needs for these four transitions in 2040. Secondly, it contrasts these to the current skills supply to identify the skills gap in the absence of policy action. Finally, it proposes a number of policy responses to ease the transition and considers the impacts of COVID-19 on the skills gap. This study was produced by Vivid Economics in partnership with HSBC who inputted into the drafting and consultation of this report.

1 This study derives the levels of global CO2 combustion and process emissions over 2019 – 2040 from IEA SDS of WEO 2020, while AFOLU CO2 emissions over 2020 – 2040 are compiled from the Network for Greening the Financial System (NGFS) ‘Immediate 1.5C with CDR, Orderly’ scenario for land use & forestry.

 

Read the full report in PDF format

 

Explore more Carbon Transition articles