The need to transition towards more environmentally sustainable modes of production and consumption has become an imperative both for developed as well as for developing countries. Increasing evidence for environmental degradation and health damage caused by pollution, along with decreasing costs for green technologies suggest that such a transition is not only desirable but also economically possible. Moreover, studies have shown that the deployment of green technologies also have a positive net effect on job creation (ILO 2018), an essential co-benefit for developing countries seeking to foster inclusive green growth. (OECD, 2011) Therefore, further progress is expected in the coming decades, both in terms of green technology diffusion, as well as in terms of decarbonizing economic growth.
The transition to a low-carbon, resource efficient economy involves systemic interventions to change methods of production across several sectors (ILO 2018). In particular, changes are required in the most polluting sectors, specifically in the generation, use, and transmission of energy, in transportation and agriculture. To this end, although with varying level of ambition, nearly all countries have by now renewable energy support policies in place (REN21 2020). Moreover, several countries have also expressed their commitment to reducing emissions across key sectors through Nationally Determined Contributions (NDCs) following the signing of the Paris Agreement in 2015. In spite of these measures and existing opportunities, industry and transportation remain, however, the fastest-growing sources of greenhouse gas (GHG) emissions (Friedlingstein et al. 2019). Industry-related GHG emissions, in particular, have continued to increase despite the declining share of manufacturing in global gross domestic product (GDP) (Fischedick et al. 2014).
Yet, decoupling of industrial activities from an excessive use of natural resources and environmental degradation is essential for the green transformation (UNIDO 2020). This process can be a “game-changer” for structural change (Altenburg and Rodrik 2017). The systemic changes necessary to enable such a transformation will result not only in new products and services but also in changes in production processes and business models (ibid.). To make these outcomes possible, aside from policies and institutions, technology development and appropriate skills are necessary.
The development of skills, knowledge and competences is, in particular, a major component of the transition to a low-carbon economy, making the adoption and use of resource-efficient, sustainable process and technologies possible by the private sector and for individual consumers (Cedefop and OECD 2015). The impacts on skills should also be seen in the broader context of transformations defining the 21st century, including the advent of the fourth industrial revolution (or 4IR) and smart manufacturing processes (known as Industry 4.0). As such, “green skills” need to be aligned with competencies required by these processes, given the inter-linkages between digitalization and green industrial development.
Three main trends are likely to influence what green skills are necessary and in which activities/sectors (Cedefop and OECD 2018: 9): (a) greening requires upgrading skills and adjusting qualification requirement across occupations and industries; (b) new economic activities related to the transition to a low-carbon economy create new occupations and related qualifications and skills profiles; and (c) structural change creates a need to reintegrate workers in the declining sectors into the labor market through re-training programs.