What is green employment and how is it changing the labor market? 

Climate change is one of humanity’s greatest challenges and is driving the entire world towards economic transformation.    

We believe that Latin America and the Caribbean can be part of the solution to the challenges associated with climate change at the global level. Our region is a leader in nature and biodiversity: 30% of its energy comes from renewable energy sources, double the world average, and it concentrates significant amounts of resources needed worldwide, such as lithium and copper, to achieve important sustainability objectives. This also means that, as we respond to climate change and move towards carbon neutrality, entire economic sectors and production processes are going to transform. New jobs will be created, and others will be transformed, replaced, redefined, or disappear.  How is climate change transforming jobs in the region and what are the skills required to work in green employment? Let’s see.  

What is green employment?  

There are several definitions available, but in general terms, we can say that these are occupations that aim to reduce human beings’ environmental impact, as well as to preserve and restore the environment. Green employment or green jobs are also quality jobs, alternatively called “decent work”. At the IDB we consider quality jobs those that include fair and sufficient income, access to social security and social protection, and the tranquility of a good income in old age upon retirement.    

According to the International Labour Organization (ILO), this type of work is framed within green economies and can be found in different sectors, from traditional ones such as agriculture to others such as environmental or ecological services including the renewable energy sector.    

Green employment results from transformation in production processes; from the creation of environmentally friendly products, responsible management of natural resources, and the use of clean fuels or renewable energy. 

Green economy, green employment, and environmental protection  

In recent years the temperature has been increasing exponentially around the world. According to the UN Emissions Gap Report 2021, global temperature is expected to rise at least 2.7°C by the end of this century. This projection exceeds the Paris Agreement target of limiting temperature rise to 1.5°C by 2050.    

The global climate landscape requires countries to move towards more sustainable and environmentally friendly economies and lifestyles; towards the promotion of green economies: those with sustainable economic activities and using infrastructures, processes, and tools to reduce carbon emissions.    

Impacts of climate change and the transition to a green economy 

Let us pause for a moment to think about the effects of climate change on poverty, employment generation, and people’s quality of life. Below, we explore some potential socio-economic impacts of climate change

Increase in existing inequalities 

Although climate change affects all countries and populations globally, it does not affect all of them in the same way. For example, poor regions and households are more exposed and vulnerable to climate challenges. Climate change increases the frequency and intensity of natural disasters, and Latin America and the Caribbean is particularly vulnerable as more than 80 million poor people live in areas of high exposure to droughts, floods, and storms. The degradation of ecosystems that occurs as a result of climate change also affects in a sensitive way the poor populations that live in biodiverse areas such as in the Amazon region.  

Creation, transformation, and elimination of jobs 

The transition to zero net emissions and green economies can take many forms and paths for each economic sector globally, but regardless of its form, there will be winners and losers.   

The transition to net zero emissions will have major impacts on the region’s labor markets: jobs will be created, replaced, eliminated, transformed, and redefined. Projections by the Inter-American Development Bank and the International Labour Organization (ILO) suggest that Latin America and the Caribbean could gain 15 million new net jobs by 2030 in sectors such as agriculture, renewable energy, forestry, construction and manufacturing, by promoting a zero net emissions economy rather than following current trends. The same joint study estimates the loss of about 7.5 million jobs in highly polluting industries such as fossil fuels (both extraction and power generation) and animal food production.  

New challenges for equality and equity 

The creation of these new jobs could occur in contexts that will not necessarily ensure equitable distribution and access between workers with different skills, or between men and women. Currently, less than 25 percent of green jobs in the region are occupied by women, and more than 80 percent of the new jobs created will be in sectors currently dominated by men such as electricity. On the other hand, many of the new jobs to be created may be in geographical regions other than those of lost jobs. 

Green employment potential and positive impacts of the route to green economies  

While climate change presents a major global challenge, managed properly, the transition to carbon neutrality and the creation of green jobs can represent an opportunity to boost the generation and access of more workers to quality jobs. It is possible to have a future in which sustainability and environmental care, sustainable development, and economic growth go hand in hand. 

If we lead a just transition that includes green employment programs, we can also promote and boost:  

Energy efficiency and the use of renewable energy

The transition from fossil energy to renewable energy sources is stimulating and will continue to stimulate the creation of jobs and new opportunities in the value chain of a sector that demands skilled labor for the installation, maintenance, and distribution of clean energy.    

According to the ILO’s Annual Report on Energy and Work 2022, 12.7 million jobs in the field of renewable energy were generated worldwide that year, 700,000 extra jobs since 2021. It is estimated that nearly 2,700 renewable energy professionals per year will be needed in English-speaking Caribbean countries alone to achieve their national clean energy targets. 

Conscious use of raw materials and natural resources 

Green employment focuses on the efficient use of natural resources through climate-smart practices that reduce greenhouse gas emissions. This implies, among other things, the need to train and equip farmers with green skills, for example, to implement ecological practices aligned with sustainable development.  

Reducing pollution and/or waste management 

Regarding waste reduction and management, green jobs focus on redirecting the production model and consumption behaviors towards a circular economy to reduce waste levels. That is, direct efforts towards the repair, reuse and recycling of existing materials and products to give them a new use.  

Reducing greenhouse gas emissions 

Greenhouse gases are naturally found in the atmosphere and help retain heat from the sun, but human harmful practices cause the volume of these gases to increase exponentially, increasing the temperature on earth. The promotion of green jobs contributes to reducing and counteracting activities such as deforestation, mass livestock, and the use of nitrogen fertilizers that end up increasing the greenhouse effect. They seek to decarbonize the economy and avoid pollution. 

Just transition and green jobs: an inevitable transformation 

The transition to net zero emissions has different possible routes for each economic sector. For countries in Latin America and the Caribbean, the way to ensure that the benefits and costs of the green transition are equitably distributed is to undertake a transformative, orderly and socially inclusive process that considers their structural and historical challenges of inequality, labor informality, and poverty.   

What is a just transition?  

Faced with the transformation of the economy in the face of climate change, the productive sectors are changing, both in production and consumption patterns, and so are labor markets and people’s livelihoods. When we talk about a just transition, we mean ensuring that changes are made equitably, mitigating the negative impacts that this transformation can cause, and accompanying people at risk of losing their jobs and sustenance.    

A just transition must introduce employment and social protection public policies aimed at reducing and offsetting negative impacts, especially for low-income households. It must also create quality jobs, with benefits and a sufficient wage to overcome poverty.  This requires promoting skills development and strengthening public employment services to help people access these jobs. 

Economic sectors with green jobs and in transition towards green economies  

The transition to green and sustainable economies will bring about a change in labor markets and existing jobs and sectors. Today in Latin America and the Caribbean, the electricity, gas and water, transport and storage, and trade sectors have the highest share of direct green employment compared to other sectors. However, other key economic sectors in the region are being decisively transformed.  

Extreme climate events and disasters, degradation and loss of biodiversity, and the implementation of decarbonization policies are having a direct impact on jobs and labor markets in Latin America and the Caribbean. There is a way to address climate change with labor market policies, find out how in this report👉Labor Markets and Climate Change: How to Adapt Labor Market Policies and Improve Employment Opportunities? 

Sectors in transformation on the path towards net zero emissions  

• Agriculture: this sector is one of the main sources of greenhouse gas emissions and environmental degradation. However, according to the Food and Agriculture Organization of the United Nations, the global agricultural sector will make its way to transformation through environmentally friendly practices. The objective for this sector is to improve yields, adopt climate-smart practices and reduce the carbon footprint of human diets. In Latin America and the Caribbean, this goal will require the development of skills for farmers, so that they can improve the use of fertilizers, adopt agricultural practices that increase the yield per square meter, introduce climate-smart farming practices, such as organic farming, and develop new technologies to, for example, reduce methane emissions from livestock.   
• Transport: the path to low carbon transport methods is also creating new jobs. The transformation of this sector will aim, among other things, to reduce the number of journeys in private vehicles, shift travel to public transport, and improve energy efficiency and the use of alternative and clean energy vehicle technology. This will require the development of a workforce with skills for sustainable transport-related industries.   
• Waste management: the transformation of this sector aims to change the model of production and consumption in all sectors of the economy to reduce and better manage the amount of waste generated. This will give way to the circular economy, and reuse or recycling of waste will generate a value chain and green jobs.   
• Energy: as regards this sector, although it will be one of the most affected by the transition, it also has the potential to create numerous jobs in the field of renewable energy. Demand for labor and investment in the fossil fuel sector is expected to decline, resulting in unemployment and loss of income. At the same time, there will be an increase in demand in the generation, maintenance and distribution of renewable energy (solar, wind or green hydrogen), which will generate demand for investments and skilled workers. 

What are some types of green jobs?  

Below is an illustrative list of green jobs and occupations that can arise in today’s labor markets within the framework of the transition to zero net emissions.  

• Solar energy consultant   
• Hybrid and electric car mechanic  
• Installer and maintenance of solar panels /Solar technician  
• Environmental manager  
• Sustainability officer   
• Engineer in sustainable design of buildings  
• Environmental engineer  
• Organic farmer or urban gardener  
• Recycling specialist   
• Ecological plumber   
• Green transport operator   

And what are some skills needed to work in a green job?  

These new job opportunities represent challenges and demand new specific skills. Here are some examples:  

• Entrepreneurship skills for the circular economy  
• Digital skills and adopting and applying new technologies   
• Technical skills for installing and maintaining electrified equipment and solar panels  
• Skills to build or adapt buildings to conserve energy  
• Efficient irrigation techniques  
• Recycling   
• Electromechanics   
• Knowledge of materials for environmental protection  
• Environmental services  
• Logistics to reduce food loss in its journey from production sites to commercial destinations  

Actions to promote green jobs and a just transition in Latin America and the Caribbean  

We offer a set of principles and recommendations to ensure just transitions in Latin America and the Caribbean, ultimately leading to sustainable economic development in the journey towards green economies. 

• As mentioned earlier; to be truly just, this journey should create quality jobs with benefits and sufficient wages to overcome poverty.  
• It should also promote the continuous development of skills so that no worker is left behind. This includes:   
  • Training programs that enable the current and future workforce to improve their skills  
  • Training programs that enable the current workforce to apply the skills they already have in new work environments   
  • Support on-the-job training or specific occupational training facilities to increase the practical experience and employability of workers in transition  
  • Ensure equitable access to training and skills development opportunities  
  • Provide training in green skills with a gender perspective  

• It is essential to introduce or strengthen public employment services since they play a fundamental role in mediating vacancies and available talent. They also provide access to training for green or green jobs   
• Wage subsidies for companies that hire people from groups that are most vulnerable to the impacts of the transition.   
• Protecting the income and consumption of those who may potentially lose their jobs in the transition through unemployment insurance and non-contributory cash transfer schemes.