Global jobs market shaken by green transition

Simon Quack followed in his father’s footsteps, joining the team at RWE’s coal-fired plant in Bergheim in the North Rhine-Westphalia region that has powered the German economy for decades.

But as Europe’s manufacturing powerhouse begins to turn its back on coal, his career has taken a different path. The 28-year-old now works for RWE’s growing renewables arm, helping manage apprentices. “I wanted not to just talk about the change but to help shape it,” he said.  

Quack’s career shift is emblematic of a labour market trend around the world, as countries move away from fossil fuels and develop “green” industries in the push towards net zero carbon emissions. 

In sheer numbers, employment in new green industries is booming, with the International Renewable Energy Agency (Irena) counting 13.7mn direct and indirect jobs in renewable energy globally in 2022. The trend has been driven by solar power, which accounted for more than one-third of the total. Some 41 per cent of green jobs are in China, according to Irena.

The International Energy Agency estimates 8mn jobs in clean energy will be added globally by 2030. Those in fossil fuels are projected to fall by 2.5mn over the same period.

While that represents a net increase of 5.7mn, workers face challenges. An OECD report this year found that while highly skilled “green-driven” jobs, such as engineers and carbon traders, tended to be better paid than those in other sectors, the same was not true of less skilled roles such as in recycling or freight transport. There were also concerns about the impact on communities when employment shifted to alternative locations. Green industries remain less unionised too.

Experts warn the impact of the transition on the labour market must be carefully managed. “We have to make sure labour market policy to help those directly affected is at the centre of green transition strategies,” said Stefano Scarpetta, head of the OECD’s employment directorate.

The OECD’s annual Employment Outlook report, published last month, estimates more than 25 per cent of all jobs in member countries will be “strongly affected by net zero policies”, both positively and negatively.  

Its projections also suggest jobs in emissions-intensive industries in the EU, such as supplying fossil fuel-derived energy, mining and energy-intensive manufacturing, will fall by 14 per cent by 2030. While they account for a relatively small portion of employment, such jobs tend to be relatively well paid and unionised.

The green transition comes as workers face a host of other challenges, such as artificial intelligence and automation, upending working practices and jobs in hard to predict ways.

“In the Industrial Revolution, you could easily identify driving forces. I find here a much more complex process of transformation,” said Moustapha Gueye, at the International Labour Organization in Geneva. 

In South Africa’s eastern Mpumalanga province, the closure of the Komati coal-fired power plant in 2022 has served as a litmus test for how one of the world’s most coal-dependent countries could manage the green transition.

Helped with a $2.2mn grant from the Bezos Earth Fund, 250 staff at the plant have been retrained in welding, solar installation, battery storage and other renewable technology skills, with another 400 due to be certified by November.

“We spoke to lots of people at the Komati training project, who told us they were initially worried about what would happen to their jobs but who now feel confident,” said Andrew Steer, chief executive of the fund, which was set up in 2020 by Amazon founder Jeff Bezos to address climate challenges.

Shoki Mbowane, who worked at the Komati power station, including as a technician and operations manager, said she had experienced a steep learning curve since starting her training in battery storage and solar technologies.

“It was scary at first because I knew nothing about renewables,” she said. “Some of my colleagues chose to move to other power stations instead of retraining . . . I think they were probably scared. I’m glad I made this choice.”

South Africa, which still gets 85 per cent of its electricity from coal, secured $8.5bn in 2021 from a group of developed countries, including the UK, US and France, as part of a landmark deal to fund the country’s climate transition. “What happens here provides lessons for the transition that all countries will have to go through,” said Steer.

But the changes have faced opposition from pro-coal trade unions and politicians.

Gwede Mantashe, South Africa’s minister of mineral and petroleum resources and a fierce advocate for coal, has said any suggestion it has reached its sell-by date is “a myth”. Africa should not be “dictated to” by other nations, he said at a 2022 oil and gas conference, warning that if the transition was implemented badly, it risked creating “ghost towns”.

“The government has been put under pressure to close power stations by the World Bank,” Bizzah Motubatse, chair of the National Union of Mineworkers branch near Komati, told the Financial Times.

In the US, meanwhile, workers’ advocates say they are encouraged by incentives in President Joe Biden’s Inflation Reduction Act. The $369bn package subsidises employers to create green jobs in communities where coal mining is in decline and to pay wages at levels prevailing among workers in similar industries.

Pay for US coal miners is 50 per cent above the average wage, according to the National Mining Association, which represents the industry.

“It used to be that you could go with low-road wages,” said Katie Harris, vice-president of federal affairs at the BlueGreen Alliance coalition of labour unions and environmental groups. “But we are excited about the [incentives].”

However, some schemes have failed to get off the ground, disappointing communities hoping for an employment boost. “Jobs are needed big time in my town,” said Gary Stevenson, former mayor of Paulsboro in New Jersey, where Danish offshore wind developer Ørsted last year cancelled two nearby projects.

“I worked for fossil fuels all my life,” added Stevenson, the fourth generation of his family to work at the Paulsboro oil refinery, which has cut jobs but remains a big employer. “I am a huge fossil fuels supporter. But . . . we have to move forward.”

Union leaders also have worries about worker representation. “We are concerned that this low-carbon economy is a low union-based industry,” said Kan Matsuzaki, assistant general secretary of the IndustriALL Global Union. “Lots of new companies have started dominating this market — we don’t always have enough [of a] union base to negotiate.”

With countries preparing for the next annual UN climate summit in November, supporters of the green transition hope they will put commitments around green jobs, such as workforce training, into climate action plans. 

“Governments and businesses need to take action now,” said Binnu Jeyakumar, senior adviser at the Powering Past Coal Alliance coalition of governments and businesses. 

Quack at RWE said workers should not fear the transition. “They will be needed,” he said, adding: “The view is awesome from the top of a turbine. It’s something really special.”

Data visualisation by Janina Conboye