As COP29 brings climate action into focus, it’s clear that policy must go beyond carbon trading and finance. To make net zero a reality, the workforce must be equipped with the right skills. Aadya Bahl examines what this transition means for the UK labour market, highlighting the urgent need for targeted skills policies.
Climate change is one of the most pressing global challenges. With increased incidences of extreme weather such as floods, wildfires and heat waves, urgent action is needed. Recognising the stakes, the UK has committed to a legally binding target to reduce its greenhouse gas emissions to net zero by 2050 requiring coordinated efforts from the government, businesses and individuals.
The Autumn Budget spotlights net zero as one of the UK’s five missions and directs substantial investments to the clean energy sector. While these investments create opportunities to decarbonise, they also pose a significant challenge: ensuring the UK workforce is prepared with the skills required by the green transition.
An evolving skills landscape
Achieving net zero by 2050 requires substantial changes to the skills landscape. Estimates suggest that roughly 6.3 million workers, or one in five jobs, will be affected. Approximately 10 per cent of these workers will face increased demands for specific skills, and a further 10 per cent may need to undergo reskilling.
The transition is expected to influence skills demand in three ways. Firstly, structural changes will drive demand in low-emission occupations, while reducing it in high-emission roles like coal mining operatives. Secondly, new activities will create new roles requiring distinct skillsets such as wind turbine engineers. Lastly, many existing jobs will undergo “greening”, where tasks evolve to incorporate sustainability-oriented knowledge and practices like ship builders learning to build lower-emission vessels. All these may require rethinking training and qualification frameworks.
The UK Government’s Green Jobs Taskforce highlights the critical role of STEM, digital and data skills, and project and change management for a successful net zero transition. Additionally, general skills such as leadership, management, and communication will also be needed.
Green jobs and who has them
A joint report from LSE’s Centre for Economic Performance and Grantham Research Institute uses an occupational approach to classify jobs based on their alignment with net zero. The authors identify green jobs as both new occupations arising from the net-zero transition such as solar voltaic installers, and existing jobs that involve new green tasks or skills, such as manufacturing production managers improving the sustainability of operations. The demand for such jobs is expected to increase significantly as decarbonisation efforts intensify.
But the transition will also affect “brown jobs”, roles within high-emission sectors where significant changes will be needed. Examples include occupations like welders, mining managers, and large goods vehicle (LGV) drivers. In 2019, around 13 per cent of the UK workforce were in green jobs, compared to four per cent in brown jobs. While some brown roles will likely decline, others will require workers to adapt to new, lower-emission technologies and processes. These changes will require strategic and targeted interventions to help workers adjust.
Green jobs tend to be more highly skilled and are disproportionately held by graduates, even within industrial sectors: 16 per cent of graduates work in green jobs compared to 11 per cent of workers with GCSE-level qualifications. Green roles are also more likely to require non-routine analytical and personal tasks and are associated with a wage premium of roughly eight per cent on average, even after discounting education and experience. In contrast, brown jobs tend to involve routine manual or non-routine physical tasks and are concentrated in areas employing non-graduates. As a result, green jobs are more prevalent at managerial and professional level occupations, while brown jobs are concentrated in process and plant operative occupations.
Policy implications
Meeting these evolving skill needs through education and retraining will be essential for maximising new opportunities and managing the net zero transition. Policies must prioritise support for workers in brown roles that may face declining demand, as well as for workers in roles that will undergo significant changes in tasks and skills.
Managing the transition will also require coordination, with national and local governments working together to address frictions that create mismatches in skills supply and demand. Lessons can be drawn from places that have been successful at this in the past like Germany’s Ruhr region, which moved away from coal and towards technology and education. National and state-level cooperation and substantial investment, including the establishment of new universities and technical colleges, enabled the region to become a knowledge and tourism-based economy.
Targeted workforce training programmes could further help accelerate the adoption of new technologies needed for decarbonisation and provide displaced workers with pathways into areas of growing demand. The Economy 2030 Inquiry recommends the introduction of a “human capital tax credits system” as a way of encouraging firms to invest in employee training. Similar to the existing research and development tax credits, this would allow companies to claim subsidies for investment in employee training. This would better equip the workforce to respond to technological advancements and economic shifts. While this approach would require careful planning and monitoring before wider implementation, it can be trialled in areas of high demand, particularly in training for the net-zero workforce.
Skills for a sustainable future
To successfully transition to a net-zero economy, the UK must address the skills challenges and opportunities associated with green jobs. Investments in clean energy and the green economy are a vital first step, but a sustainable transition will require coordinated efforts to build a skilled workforce that can meet the demands of a low-carbon economy.
By prioritising skills development, the UK can foster a labour market that is resilient, adaptable, and capable of supporting a sustainable future. Amid COP29 discussions, it is essential to remember that at the heart of the transition is people, who will drive and shape the path to a low-carbon future.
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- This blog post represents the views of the author(s), not the position of LSE Business Review or the London School of Economics and Political Science.
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