The year 2022 set a number of alarming records as a result of climate change and environmental degradation. It was one of the warmest years on record in many countries, widespread draught took its toll on nature and economic activities, and contamination of our environment and air continues. Encouragingly, OECD governments are taking action and momentum is growing for the green transition.

However, the green transition won’t happen without “green talent”, meaning the workers with the skills that a greener economy requires. While change is underway, the green transition will drive a massive shift in the demand for skills, jobs, or specific goods more rapidly than the market can adjust. Consumer preferences are shifting, and the market is responding, but many of those changes are, and will be, due to policies that will take effect with short time frames. Whether it is new regulations on construction or production processes, taxes on carbon emissions or reforms of land use planning, all will change the way people live, work, produce and consume. Governments will have to ramp up efforts to anticipate and prepare for the changes in the labour market hand-in-hand with their environmental policies.

When people think green, they often think of jobs in renewable energy, but those are only one part of the story. New skills will be needed throughout the economy, whether it is retraining construction workers on environmentally friendly materials and techniques, or reskilling automotive workers for electric vehicle production. The jobs and skills needed will differ geographically—some local labour markets will have people with skills that can be easily redeployed and others not.

This 2023 edition of Job Creation and Local Economic Development fills a critical gap by examining the implications of the green transition on local labour markets with new internationally comparable metrics. It provides novel insights into the geography of “green” and “polluting” jobs within OECD countries based on the tasks that those jobs imply. It examines which places are leading or lagging behind in their progress towards a greener labour market in terms of these “green-task” jobs. It also analyses whether the green transition might alleviate or exacerbate existing divides within local communities on gender, levels of education and skills, or wages of workers. To deliver a green transition that is just in terms of jobs for different people and places, targeted policy action is required.

This report offers guidance on local action in preparing communities, workers, and firms for the labour market changes driven by the green transition. It builds on lessons from other transitions past and present, such as digitalisation, globalisation, and the exit from coal on local economies. It provides actionable recommendations on how local skills systems need to adapt to enable a green transition, and at the same time, deliver it in a socially just way. It lays out strategies for building effective green skills coalitions through improving collaboration across government and beyond. It also points out the need for better regional labour market intelligence that informs retraining and upskilling programmes for the green transition.

This publication contributes to the work of the Co-operative Action Programme on Local Economic and Employment Development (LEED), created in 1982 to provide practical solutions about how to build vibrant communities with more and better jobs for all. It was approved by the Local Economic and Employment Development Directing Committee via written procedure on 9 February 2023 [CFE/LEED(2023)1].

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