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Work toward net zero
The rise of the Green Collar workforce in a just transition
November 2022
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Work toward net zero
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Contents
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Work toward net zero
Insight summary 06
How the climate changes the future of work 12
The workforce impacts of climate change and decarbonization 22
Creating job opportunities from equity in transition 34
Building a new Green Collar workforce 52
How skills oer pathways and opportunity in transition 66
Setting a policy agenda for the Green Collar workforce 72
Endnotes 86
Technical appendix 90
Contact 107
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Work toward net zero
worker requirements over the transition period and
the role of policy in helping workers participate in a
net-zero future.
Just as industrialization gave rise to a blue-collar
workforce, and technology and the growth of services
has given rise to a white-collar workforce, the path to
net zero is giving rise to a new Green Collar workforce.
Deloitte Global’s modeling shows that the skills
required in a Green Collar workforce are not too
dierent from the skills held in the current workforce,
and eectively harnessing this talent to learn more,
teach others and create an active transition to net
zero, will result in over 300 million additional jobs
globally at 2050.
But this employment dividend can only be achieved
by active policy support from governments globally in
workforce and decarbonization policy eorts.
This report presents a Green Collar workforce policy
agenda to guide how decision-makers should consider
supporting industries and workers to adapt to global
decarbonization for equitable employment outcomes.
While this report provides a global perspective – a
framework for thinking about skills as the driver of
economic transition – the challenge will always to
be to act local; to determine the specics of a local
workforce and the skills needed to drive an economy
in a net-zero world.
The great advance over the last few years has
been the translation of this challenge from
environmental or moral arguments to an
economic, and now commercial, discourse.
As highlighted in our Turning Point series, the reality
is now clear: the progression of climate change, if
unchecked, could slow economic growth (by some
USD$178 trillion in net present value terms from
2021-2070) and destroy jobs and communities; while
the economics of addressing climate change, with an
active and global transition, could generate economic
growth (by some USD$43 trillion in net present value
terms from 2021-2070), jobs, and incomes for people
around the world.
Our capacity to navigate the task ahead is informed
by our understanding of structural economic change
and the dynamics that will play out during the fastest
industrial revolution the world has ever seen.
Reaching net-zero emissions by 2050 will
fundamentally change the global economy through
hard shifts in industrial policy, energy systems, and
consumer behavior– how resources are allocated,
and the perceived fairness of the processes involved
in this allocation, are live and critical issues that will
dene history.
Planning for transition and osetting costs with
shared benets will ensure economic history looks
back kindly on the low-emissions transformation and
the governments guiding this change.
In this way, governments will not only be judged
on economic performance, but on how growth is
distributed within economies and across countries.
Equity is not just the product of transition; it is
a critical ingredient to enabling it and driving
sustainability in economies and societies. At the
very center of this is people, their work and their
livelihoods.
This Deloitte Global report provides a policy
framework which posits workers and their skills as the
driver of economic transition, rather than being the
consequence of economic transition.
With around one quarter of global jobs (around 800
million jobs) at risk from unchecked climate change,
policy action to upskill and retrain workers can both
realize the potential of economic growth while driving
greater equality as the world economy shifts to a low-
emissions production system.
But investing in skills must be a priority and a
purposive act by governments and business, today.
Considering skills, not just occupations and jobs,
allowed us to assess the incremental changes to
The science of climate change
is reverberating through
economies, communities,
and business, worldwide.
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Work toward net zero
How governments and businesses - individually
and collectively - design the transition to mitigate
climate impacts and capitalize on the opportunity
of decarbonization will be one of the greatest
determinates of equality in the coming decades.
The future is not pre-ordained and our skills are not
pre-destined.
Just as the Turning Point provided a hopeful story for
our humanity, Work Toward Net Zero focuses on how
skills provide us with a hopeful and purposeful story
of growth – of shared prosperity – for all.
Jennifer Steinmann
Global Sustainability &
Climate Practice Leader
Steven Hateld
Global Future
of Work Leader
1WorktowardnetzeroTheriseoftheGreenCollarworkforceinajusttransitionNovember202223Worktowardnetzero010203040506070809Contents2WorktowardnetzeroInsightsummary06Howtheclimatechangesthefutureofwork12Theworkforceimpactsofclimatechangeanddecarbonization22Creatingjobopportunitiesfromequityintransition34BuildinganewGreenCollarworkforce52Howskillsofferpathwaysandopportunityintransition66SettingapolicyagendafortheGreenCollarworkforce72Endnotes86Technicalappendix90Contact10745Worktowardnetzeroworkerrequirementsoverthetransitionperiodandtheroleofpolicyinhelpingworkersparticipateinanet-zerofuture.Justasindustrializationgaverisetoablue-collarworkforce,andtechnologyandthegrowthofserviceshasgivenrisetoawhite-collarworkforce,thepathtonetzeroisgivingrisetoanewGreenCollarworkforce.DeloitteGlobal’smodelingshowsthattheskillsrequiredinaGreenCollarworkforcearenottoodifferentfromtheskillsheldinthecurrentworkforce,andeffectivelyharnessingthistalenttolearnmore,teachothersandcreateanactivetransitiontonetzero,willresultinover300millionadditionaljobsgloballyat2050.Butthisemploymentdividendcanonlybeachievedbyactivepolicysupportfromgovernmentsgloballyinworkforceanddecarbonizationpolicyefforts.ThisreportpresentsaGreenCollarworkforcepolicyagendatoguidehowdecision-makersshouldconsidersupportingindustriesandworkerstoadapttoglobaldecarbonizationforequitableemploymentoutcomes.Whilethisreportprovidesaglobalperspective–aframeworkforthinkingaboutskillsasthedriverofeconomictransition–thechallengewillalwaystobetoactlocal;todeterminethespecificsofalocalworkforceandtheskillsneededtodriveaneconomyinanet-zeroworld.Thegreatadvanceoverthelastfewyearshasbeenthetranslationofthischallengefromenvironmentalormoralargumentstoaneconomic,andnowcommercial,discourse.AshighlightedinourTurningPointseries,therealityisnowclear:theprogressionofclimatechange,ifunchecked,couldsloweconomicgrowth(bysomeUSD$178trillioninnetpresentvaluetermsfrom2021-2070)anddestroyjobsandcommunities;whiletheeconomicsofaddressingclimatechange,withanactiveandglobaltransition,couldgenerateeconomicgrowth(bysomeUSD$43trillioninnetpresentvaluetermsfrom2021-2070),jobs,andincomesforpeoplearoundtheworld.Ourcapacitytonavigatethetaskaheadisinformedbyourunderstandingofstructuraleconomicchangeandthedynamicsthatwillplayoutduringthefastestindustrialrevolutiontheworldhaseverseen.Reachingnet-zeroemissionsby2050willfundamentallychangetheglobaleconomythroughhardshiftsinindustrialpolicy,energysystems,andconsumerbehavior–howresourcesareallocated,andtheperceivedfairnessoftheprocessesinvolvedinthisallocation,areliveandcriticalissuesthatwilldefinehistory.Planningfortransitionandoffsettingcostswithsharedbenefitswillensureeconomichistorylooksbackkindlyonthelow-emissionstransformationandthegovernmentsguidingthischange.Inthisway,governmentswillnotonlybejudgedoneconomicperformance,butonhowgrowthisdistributedwithineconomiesandacrosscountries.Equityisnotjusttheproductoftransition;itisacriticalingredienttoenablingitanddrivingsustainabilityineconomiesandsocieties.Attheverycenterofthisispeople,theirworkandtheirlivelihoods.ThisDeloitteGlobalreportprovidesapolicyframeworkwhichpositsworkersandtheirskillsasthedriverofeconomictransition,ratherthanbeingtheconsequenceofeconomictransition.Witharoundonequarterofglobaljobs(around800millionjobs)atriskfromuncheckedclimatechange,policyactiontoupskillandretrainworkerscanbothrealizethepotentialofeconomicgrowthwhiledrivinggreaterequalityastheworldeconomyshiftstoalow-emissionsproductionsystem.Butinvestinginskillsmustbeapriorityandapurposiveactbygovernmentsandbusiness,today.Consideringskills,notjustoccupationsandjobs,allowedustoassesstheincrementalchangestoThescienceofclimatechangeisreverberatingthrougheconomies,communities,andbusiness,worldwide.54WorktowardnetzeroHowgovernmentsandbusinesses-individuallyandcollectively-designthetransitiontomitigateclimateimpactsandcapitalizeontheopportunityofdecarbonizationwillbeoneofthegreatestdeterminatesofequalityinthecomingdecades.Thefutureisnotpre-ordainedandourskillsarenotpre-destined.JustastheTurningPointprovidedahopefulstoryforourhumanity,WorkTowardNetZerofocusesonhowskillsprovideuswithahopefulandpurposefulstoryofgrowth–ofsharedprosperity–forall.JenniferSteinmannGlobalSustainability&ClimatePracticeLeaderStevenHatfieldGlobalFutureofWorkLeader67WorktowardnetzeroInsightsummary76Worktowardnetzero89WorktowardnetzeroJustastheIndustrialRevolutiongavedefinitiontobluecollarworkers,whichthengaverisetowhitecollarworkers,anewskillsetisgivingrisetoanewgroupofworkers.Thetransitiontonet-zeroemissionscreatesacadreofworkerswithnewskills,whichwedescribeastheGreenCollarworkforce.Thisworkforcereflectshowglobaldecarbonizationisalreadychangingtheworkforcetodayandhowitcouldremakethefutureofworkinanet-zeroworld.AGreenCollarworkercanbeanofficeworkeroramanuallaborer.Itisnotabouttheindustry,location,orskillsofaworkerthatmakesthemGreenCollar;itisabouthowdecarbonization(doesordoesn’t)influencetheirworkandtheirskills.Someexistingoccupationswillsignificantlytransform,othersmayonlyneedtochangeatthemargins,andentirelynewoneswillemergeastheGreenCollarworkforceshapesthefutureofwork.TheDeloitteEconomicsInstitutehasestablishedfivecategoriesofoccupationsthatdefinetheGreenCollarworkforcetoday.Thesecategoriesestablishaframeworkforhowworkforcepolicycanbedesignedforadecarbonizingglobaleconomy.Today’sworkershavetheskillsneededfortheGreenCollarworkforceTodelivertheeconomicopportunityofanactivetransitiontonet-zero,thereisaneedtothinkabouttheskillsofthoseworkersintheGreenCollarworkforce.The300millionjobsrepresentstheadditionalleveloftotalglobalemploymentat2050underanactivetransition,incomparisontoapassivetransitionpathway,thusmakingthecaseforcoordinatedpolicyaction.DeloitteEconomicsInstitute’smappingofexistingskillsintheworkforceshowsthat80%oftheskillsrequiredintheshort-to-mediumtermtoachievenet-zeroemissionsby2050alreadyexist.Thismeansmostcurrentworkersarelikelytoonlyrequireupskilling(suchason-the-jobtraining),ratherthancompleteretrainingtoremainintheircurrentjobortogainanewjobduetodecarbonization.Theskillsofworkerscanfacilitateequitableemploymentopportunitiesaseconomiesdecarbonize.Importantly,astheGreenCollarworkforcedevelops,onlyasmallnumberofjobswillbeimmediatelyandnegativelyaffectedbythenet-zerotransition.Formostworkersacrosseconomies,eitherintheGreenCollarworkforceornot(suchasteachers,nurses,hospitalityworkers,andsmallbusinessowners),decarbonizationoftheeconomyisunlikelytochangetheskillstheyrequireintheirrole.Proactivepublicpolicycansupportvulnerableregions,industries,andworkersduringthetransitionTheDeloitteEconomicsInstitutehasdevelopedaGreenCollarworkforcepolicyagendatoguidehowdecision-makersshouldconsidersupportingindustriesandworkerstoadapttoglobaldecarbonizationforequitableemploymentoutcomes.Thepolicyagendaisshapedbytheneedforanactivetransitiontonet-zeroglobally,andthismeansanactiveroleforgovernmentsgloballyinworkforceanddecarbonizationpolicyefforts.Withtherightpoliciesinplace,anindustrialrevolutioninunder30yearscanbeachieved—creatingnewindustries,morejobs,andaconfidentfutureofworkastheworstimpactsofclimatechangeareavoided.Butthepromiseofdecarbonizationpresentsrisksunlesstherightplanningandsupportisprovidedtothosemostvulnerabletoclimatechangeandjobdisruptionintransition.Aseconomiesacceleratetonet-zero,thesuccessoftheglobalefforttomitigateclimatechangewillbejudgedonhowitprotectsthosemostvulnerable.Thisreportidentifiestheindustries,regions,andworkerswhowillbemostadverselyaffectedbyclimatechangeandtheglobaltransitiontoanet-zeroeconomy.Itdemonstrateshowacoordinatedpolicyfortransitiontowardnewareasoflow-emissionsgrowthcancreateviableemploymentpathwaysforvulnerableworkers,reducedisruption,andimprovestandardsoflivingglobally.ClimateextremesandunplannedeconomictransitioncreatesubstantialriskstoworkersAccordingtotheDeloitteEconomicsInstitute’sanalysis,morethan800millionjobsworldwide—aroundone-quarteroftheglobalworkforcetoday—arehighlyvulnerabletobothclimateextremesandeconomictransitionimpacts.TheimpactswillbeparticularlysevereinAsiaPacificandAfrica,withmanyworkforcesintheseregions,suchasworkersinIndiaandChina,havingmorethan40%ofemploymentinhighlyexposedindustries.Governmentcoordinationiskeytoensuringthetransitiontakesplaceattheoptimalpaceandscaletoachievethegreatestpossibleeconomicgrowthandjobcreationwhilemitigatingclimateimpactsandcoststovulnerableworkers.Acoordinatedandrapidtransitiontonet-zerodeliversnewjobgrowthDeloitteEconomicsInstitutemodelingshowsthatwithrapiddecarbonizationandactivetransitionpolicyinthecomingdecade,allregionsgloballycanhavehighereconomicgrowthandmorejobsinthelongterm.Morethan300millionadditionaljobsgloballycanbecreatedby2050fromseizingthedecarbonizationopportunityandmakingthetransitionworkforall.DeloitteEconomicInstitute’sanalysisdemonstratesthatanactivetransition,withtherightpolicysupportfromgovernments,globally,meansmorejobsandbetteroutcomesforworkers,incomparisontoapassive,uncoordinatedtransitiontonet-zero.Thenet-zeroeconomywillcreate—andrequire—aGreenCollarworkforceThetransitiontonet-zeroemissionsfundamentallychangestheglobaleconomy.Butwherethereistransition,itdoesnotmeanthepeople,ortheirskillsdisappear.Infact,workersandtheirskillswillbevitaltocreatingapathwaythatdeliversonthepromiseofglobalnet-zerotodeliverjobcreation.Transformingtheglobaleconomytoachievenet-zeroemissionsbymid-centuryisanunprecedentedeconomicopportunity.1011Worktowardnetzero1110Createhigh-valuejobsfortransitionpathwaysBalancingthecostsandbenefitsoftransitiontonet-zerorequiresmorethanprovidingadisruptedworkerwithanewjobopportunity.Employmentpathwaysarerequiredthatrepresentanequivalent,orhigher,qualityjobopportunitytoensuretheirlivingstandardsandmeaningfulengagementinworkaremaintained.Policysettingsforskillpathwaysshouldofferthestructuretocreatebetteroutcomesintermsofwage,workingconditions,andjobsecurityandequallyidentifywithaworker’scareerpurposeandambitions.ReformeducationandtrainingsystemsfordecarbonizationTheeducationandtrainingsectorisanimportanteconomicpolicylevergovernmentscanpulltoempowerpeopletoestablishnewandfulfillingvocationsinalow-emissionsfuture.Educationandtrainingsystemsgloballywillberesponsibleforupskillingandretrainingdisruptedworkersandnewstudentstofacilitatepathwaysintohigh-growthsectorswithin-demandskills.Reformingtheeducationandtrainingsectortoevolveinlinewiththedecarbonizationofeconomiesiscriticaltorealizingtheeconomicpotentialofdecarbonization.TargetworkforcepolicytodirectskillstowheretheyareneededNotallworkers,skills,orregionswillrequirethesamepolicysolutions.Activetransitionassistancecantargetimprovedeconomic,workforce,andskillingoutcomesbasedona“portfolioapproach”thattargetsspecificcohortsintheeconomy.Thiswillbecoretosuccessfullydesigningplace-basedandcohort-basedworkforcepolicyfordecarbonization.3/4/5/1/SetambitiousinterimemissionsreductiontargetsClearlydefinedandimplementedinterimreductiontargetscanguideindustries,businesses,andindividualstomakeeffectiveinvestmentdecisionsforatimelyandcoordinatedtransition.Gettingthetimingandscaleofemissionsreductionrightiskeytoanactivetransitionthatwillleaveworkersbetteroffandlowerthecostsoftransitionforeconomiesoverall.Net-zeroworkforcepolicymustbeafunctionoftherightemissionsreductionpathways.DesignnewindustrialpolicyAcceleratingprogresstowardnet-zeroemissionsandtacklingourtoughestclimatechallengeswillrequireextraordinarylevelsofcollaborationandcoordinationacrossemergingeconomicsystems.Systemsarebroaderthantraditionalindustrydefinitionsandpolicysettings.Asystemsapproachtodecarbonizationrecognizesthatexistingindustrieswillberebuiltasaseriesofcomplex,interconnected,emissions-freesystems—likeenergy,mobility,manufacturing,agriculture,andlanduse.Government,finance,andtechnologycanhaveacatalyticroletoenabletransformationandtheemergenceofnewsourcesofjobsandgrowth.“Systemdeals”representtailoredarrangementsbetweencentralgovernment,industrybodies,specificfirms,research,andskillingorganizationstocollectivelydesign,fund,anddeliveronadefinedeconomicoutcomeinrelationtodecarbonization–whatmusttheenergy,mobility,manufacturing,agriculture,andlandusesystemslooklikeby2050?Whatneedstochangetodaytoensuretheworkforcecandelivergrowthinthesesystems?NewindustrialpolicysettingsshouldbeadoptedwiththeGreenCollarworkforceatthecentertodeliveronrapiddecarbonizationattheleastcosttoexistingindustriesandworkers.2/GreenCollarworkforcepolicyagendaWorktowardnetzero1213Worktowardnetzero1301Howtheclimatechangesthefutureofwork12Worktowardnetzero1415WorktowardnetzeroCoordinatedclimateactioncouldincreasethesizeoftheworldeconomybyinnetpresent-valuetermsfrom2021−2070,inUSdollars,comparedtoaclimate-damagedbaseline.$43trillionclimate-damagedoutlookwillbecomethenewnormal.Inactingtorapidlyachievenet-zeroemissionsbymid-century,theglobaltransformationtoanet-zeroeconomycouldcreatestrongereconomicgrowthby2070.Deloitte’smodelinghasshownthatsuchatransformationcouldincreasethesizeoftheworldeconomybyUS$43trillioninnetpresent-valuetermsby2070(figure1).Transformingtheeconomytoachievenet-zeroemissionsbymid-centuryisanopportunitytochangethearcofourglobaleconomicfuture.Withtherightmixofpoliciesinplace,theworldcouldachieveanindustrialrevolutioninunder30years—givingrisegloballytonewindustries,morejobs,andnewtypesofworkandskillsetsastheworstimpactsofclimatechangeareavoided.Net-zerotransformationoffersawin-winfortheclimateandtheeconomy.Butthepromiseofdecarbonizationstillpresentsrisksunlesstherightplanningandsupportisprovidedforpeoplewhoarevulnerabletobothclimatedamagesandjobdisruption.Aspolicymakersandbusinessleadersacceleratetonet-zero,thesuccessoftheglobaleffortwillbejudgedbasedonhowitprotectsthosemostvulnerabletoday.Astheworldentersaneweraofsustainableeconomicgrowth,whereemissionsintensityisdecoupledfromtheproductionsystemoftheeconomy,thereisanopportunitytorebuildeconomiesandsocietiesmoreequitably.Thetransitiontoanet-zeroworldcanonlybeachievedthroughtheingenuityoftheworkforce,andafocusonskillscanensurethatworkersdrivetheeconomictransitionand,insodoing,ensureajusttransition.inglobaleconomiclossesinnetpresent-valuetermsfrom2021−2070,inUSdollars.Uncheckedclimatechangecouldcreate$178trillionButeconomicgrowthandimprovedstandardsoflivingarenotguaranteed.Aseconomiesevolveglobally,therecanbenocomplacencyaboutgettingtherightmixoffactorsforequitableandsustainableeconomicgrowth.Climatechange,andtheworld’sresponsetoit,isafundamentalfactortogetrightforgoodeconomicgrowth.Deloitte’sanalysisinTheTurningPointhasshownthatuncheckedclimatechange,whereglobalaveragetemperaturesriseby3°C,slowsgrowthineveryregion.By2070,mountingglobaleconomiclossescouldtotalUS$178trillion(inpresent-valueterms),afuturethatwouldbemarkedbysignificantdeclinesinproductivity,jobcreation,standardsofliving,andwell-being.1In2070alone,globalGDPcouldbe7.6%lowerduetoclimatedamagestogrowth.Unlesstheworldtakesrapidandcoordinatedaction,thisincreasinglyEconomicgrowthanddevelopmentareaboutdynamics.Aseconomiesgrowandevolveovertime,theyareshapedbyhistory,naturalendowments,theingenuityofpeople,andtheconstantstrivebypolicymakers,businesses,andindividualstokeepdoingbetter.Figure1:SummaryofglobalTurningPointReportfigures:Costvs.opportunity1617WorktowardnetzeroTheworkforceisascomplexasthehumansthatmakeitup.Thiscomplexity,combinedwiththeunrelentingpaceofeconomicchange,seesthestructureoftheworkforcecreategapsbetweenthetypesofjobsthatarecreatedandthetypesofworkersandskillsaneconomyhastofillthem.Almostuniversallyinworkforcepolicy,todate,suchgapsareoftenseenasaconsequenceofeconomicforceswithpolicyneedingtoreacttothechange.Theeconomycreatesnewordifferentjobsthatdemandnewskills;workersseekouttrainingtoremaincompetitive;andthetrainingsystemfollowssuit.Publicpolicysees“joborskillgaps”beingcreatedandthenthinksabouthowtofillthem.Butconductingworkforcepolicyinthiswaymissesanopportunitytocreatebetteroutcomesforworkersandtheeconomyoverall.Andajusteconomictransitionrequiresharnessingthepoweroftheworkforceanddirectingittowardmeetingnet-zeroglobally.Thisrequiresinvestingupfrontintheskillsandsupporttheeconomywillneedtobecomelowemissions.Theworldneedstotapintotheskills,knowledge,andexperienceoftheglobalworkforcetocreatetheGreenCollarworkforceoftomorrow.Thenet-zerotransitionwon’tjusthappentoworkers;today’sworkerswillcreatethetransition.Becausetoday'sworkershavevaluableskills,knowledge,andexperiencesthatareassetstoboththeeconomyandtotheirownsuccess,astheeconomytransitions,thenewfutureofworkwillgiveworkersachancetousetheirskillsinnewways,tobuildemergingindustries,andtoexplorenewoccupationsaltogether.Ajusttransitionisnotjustaboutfocusingonthefuturejobsthatwillbelostorcreated.Itisaboutthefutureskillsneededandhowworkforcepolicycanharnessthefullpotentialforworkerstousetheminaworldofemergingeconomicopportunity.Workersmakethetransitionpossible17Astheglobaleconomydecarbonizes,allsocietiesmustaimforsustainableeconomicprosperityandfairness.Thatmeanspublicpolicydesignedfortransitionmustaccountforbothgrowingthesizeoftheeconomicpie(prosperity)andhowitisslicedup(equity/fairness).Successinthetransitiontonet-zerowillbemeasuredbyhowwellpoliciesdeliveronboth.Butthenatureofeconomicchangemeansthatitcanbechallengingtoinfluenceatransitioninthedirectionwherethegreatestmajorityarebetteroffanddisruptionandinequalityareminimized.Challenging,butnotimpossible.Howresourcesareallocated,andtheperceivedfairnessoftheprocessesinvolvedinthisallocation,areliveandcriticalissues.Thismeansgovernmentandbusinesshaveanimportantroletoplayinprotectingthelivelihoodsofpeopleaffected.Thenotionofclimatejusticeisintimatelylinkedtotheoutcomesofthetransitiontonet-zeroandbroaderissuesofintergenerationaldisadvantage,globalpoverty,politicalandeconomicmarginalization,landrights,discrimination,andunemployment,forexample.Transitionandclimatemitigationnotonlyenablecountriestoachievetheirindividualclimateanddecarbonizationgoals,butalsocreateamoreresilientsocialcontractbetweencitizens,governments,andbusinesses.Thisstrongersocialcontractcanoccurwhilealsoloweringthecostsoftransitionforeconomies.Planningfortransitionandoffsettingcostswithnewopportunitiesandmoreevenlysharedbenefitswillensureeconomichistorylooksbackkindlyonthelow-emissionstransformation.Cooperationacrossandwithincountriestoeffectivelysolveforclimatechangeismuchmorelikelyifthereisabeliefthattheprocedures,institutions,andoutcomesinvolvedinthetransitionarefair.iEquityisnotjusttheproductoftransition;itisacriticalingredienttoenablingitanddrivingsustainabilityineconomiesandsocieties.Understandingtheroleoftheglobalworkforceinachievinganequitabletransitiontonet-zerois,thus,importantforpublicpolicy.Prosperityandfairnessarekeyingredientstoajustworkforcetransition1819Worktowardnetzero19Thisreportbuildsonthisanalysisandpresentsamoredetailedlookattheimpactsofdecarbonizationonjobsandhowworkforcepolicycancreateanequitabletransitiontonet-zeroglobally.18Deloitte’sTurningpointserieshighlightedtheeconomiccostofuncheckedclimatechangeandtheopportunitiesofcoordinatedactiontodecarbonizeeconomiestoreachnet-zeroemissionsbymid-century.ModelingtheimpactsofpolicychoicesonworkforcetransitionWorktowardnetzero2021WorktowardnetzeroFigure2:OverviewofanalyticalframeworkThisanalysis1.Fromvulnerability:UsingD.Climatetomodelhowclimatechangeandeconomictransitiontonet-zeroaffectjobsintheglobaleconomy2.Toopportunity:UsingD.Climatetomodelthejobopportunitiesintheglobaleconomyfromanequitabletransitiontonet-zero3.TheGreenCollarworkforce:HowthedecarbonizationofeconomieswillaffectoccupationsandcreateanewGreenCollarworkforce4.Skillsarethecurrencyofwork:Howskillsmustbethefocusofworkers’policytosecureanequitabletransitionandjobopportunitiesJobsJobsOccupationsSkillsThenumberofemployedworkersinanindustryoreconomyExample:10millionjobsinCountryXagricultureindustryThetypesofworkemployedworkersdoinaneconomyExample:1millioncropfarmersincountryXagricultureindustryThemixofskillsanemployedworkerhasintheiroccupationExample:cropfarmersrequireskillsinmanualworkandmaintenanceOccupationsSkillsUsingscenarioanalysisfromDeloitte’sRegionalClimateIntegratedAssessmentComputableGeneralEquilibriumModel(D.Climate),thisresearchdemonstrateshowclimatedamageandthenet-zerotransitioncouldaffecteconomicoutput(grossdomesticproduct),industrygrowth(grossvalueadded),andemploymentfortheglobaleconomyandatthecountrylevel.2Themodelingdeterminesboththecauseandthescaleofimpactonjobsduetoglobalclimatechangeandthetransitiontonet-zero.Usingthismodeling,researchershaveinsightintothevulnerabilityofindustriesandjobstoday.Byunderstandingcurrentworkforcevulnerability,theanalysiscandeterminewheretofocuspolicyefforttodesignequityintothetransitiontonet-zerotosecurejobgrowthandlimitdisadvantage.Usingthisunderstanding,theDeloitteEconomicsInstitutehasmodeledthe“jobdividend”ofglobaleconomiesachievingnet-zeroonacoordinatedandassistedglobaltransitionpathway.Thedividendreflectstheclearbenefitthatpolicycoordinationcanhaveonensuringmoreequitableoutcomesforworkersandcommunitiestoday,andintothefuture.Thisinsightsupportsanassessmentofhowworkforcepolicysolutionscansupportamorejusttransitiontominimizecostsandcreategreateropportunities.TheassessmentofpolicysolutionsisinformedbyanunderstandingofhowbothoccupationsandskillsareaffectedintransitionasjobschangeintheGreenCollarworkforce(figure2).Refertothetechnicalappendixforfurtherdetailonthemethodsapplied.TheDeloitteEconomicsInstitutehasusedscenarioanalysistomodelhowtheglobalnet-zerotransitionandclimatechangeaffectemploymentorjobs.2223Worktowardnetzero232202TheworkforceimpactsofclimatechangeanddecarbonizationWorktowardnetzero2425Worktowardnetzero25Aseconomicdisruptionsemerge,certainplaces,industries,andtheirworkforcesareaffectedmorethanothers.Decarbonizingtheglobaleconomywillrequirefundamentalshiftstobecomelowemissionsbydesign.Thisdynamicprocesswillhaveuniqueinteractionsbetweenmultipleactors,geographies,systems,andtechnologiesoverdifferenttimescales.Theglobaltransitionwillnotbeasingleprocessbutratheraseriesofplace-basedtransitions,eachshapedbythephysicalclimate,uniquetransitionrisks,andimportantly,howpolicymakersprepare.Economichistoryoftencanprovideaguideonthe“where”and“who”thatwillneedsupporttoensuredisruptiontoworkersisminimized.Butthenet-zerotransitionhasuniquecharacteristics,whichmeanshowpolicymakerscanprepareforitdiffers.Tostartwith,theenvironmental,economic,andsocialcostsundera“nochange”approachtoclimatechangeanddecarbonizationwillbesignificantlygreaterthanthosefromtransitioning.2Thismeanstheglobaleconomyisdecarbonizingforaclearreasonandtowardacommittedendgoalofnet-zeroemissionstolimitglobalaveragewarming.iiWeknowwhatwearemovingawayfrom,andweknowwhereweareheading.Andbecauseofthis,therightpoliciescanworktoensuretheworkforcetransitiondoesnotleaveanyonebehind.Becauseallregionsor“places”havedifferentintrinsiceconomicadvantages,thereisaninherentlydifferentdistributionofindustriesanddriversofeconomicgrowthacrossgeographies.2627WorktowardnetzeroFigure3:WhattheJobVulnerabilityIndexreflectsSectorsintheJobVulnerabilityIndexthatareexposedtophysicalclimatedamageandnet-zerotransitionriskTheJobVulnerabilityIndexwasconstructedusingD.Climatedatacontainingemploymentinformationfrom2021forindividualindustries,withfivemajorindustrygroupsidentifiedasvulnerableto:Thephysicaldamagesofclimatechange,includingcapitaldamages,sea-levelrisedamagestoavailablelandforuse,heatstressimpactstoworkers,humanhealthdamages,agriculturaldamagesfromchangesincropyields,andtourismimpactstothenetinflowofforeigncurrency.Thecostsofeconomicadjustmentfromthenet-zerotransition,whichmaydisruptindustriesandtheirworkersinemissions-intensiveindustries,suchasfossilfuels,heavymanufacturing,oragriculture.Thisdisruptioniscausedbyemissions-intensiveactivities,assets,andprocessesneedingtobereplacedbylow-emissionalternatives.Acountryorregion’svulnerabilityisdeterminedbytheshareofworkersemployedintheseindustries,relativetototalemployment.Forexample,acountryisextremelyvulnerableifmorethan40%ofacountry’sworkforceisemployedinagriculture,conventionalenergyandmining,heavyindustryandmanufacturing,transport,andconstruction.Basedonthevulnerabilitymeasure,countriesarethenscoredbasedontheirAgricultureTransportConstructionConventionalenergyHeavyindustry&manufacturingrelativevulnerability.Forexample,SouthAmericancountries,suchasArgentinaandChile,havethelowestshareoftheirworkforcesemployedinvulnerableindustriesandrankthelowest.WhileseveralAfricancountries,forexample,haveamuchhighershareofvulnerableworkersintheseindustriesandrankhigher.ThetechnicalappendixprovidesadditionaldetailonthemethodologyfortheIndex.1/2/Toidentifywhoisvulnerabletoclimatechangeanddecarbonization,theDeloitteEconomicsInstitutehasconstructedaJobVulnerabilityIndex(“theIndex”)basedontoday’sshareofeachcountry’semployedworkers(numberofjobs)inindustriesidentifiedasextremelyvulnerabletoclimatedamageandeconomictransitiontonet-zero.TheIndexisnotameasureofjoblosses.Rather,itindicatesrelative“jobvulnerability”basedonaregionhavingthemosttolose(economicallyandsocially)ifpolicydoesnotmitigatebothclimatechangeimpactsandthecostsfromtheeconomictransitiontonet-zero.Noregion,industry,orjobiswithoutjobvulnerability,butsomehaveasignificantlyhigherlevelofriskcomparedtoothers(figure3).ThismakestheIndexameasureofrelativity,whereallregionsgloballyareexposedtoclimateandtransitionsrisks.IdentifyingtheworkforcesmostvulnerabletochangeTheregionswiththehighestlevelofjobvulnerabilityintheIndexsharecharacteristicssuchasthefollowing:•Alargeshareoftheworkforceisemployedinindustriesthathavehighexposuretoclimaticextremessuchasheatstress.•Alargeshareoftheworkforceisemployedinindustriesthatarecapital-intensiveandwhereincreasinglyfrequentandseverenaturaldisastersandclimateextremesdisruptproductivityandinvestment.•Asignificantproportionofnationalincomeandeconomicgrowthisderivedfrommining,fossilfuel,andenergy-intensiveproduction,whichisexposedtotransitionrisk.2829Worktowardnetzero800thanmorehaveahighvulnerabilitytoclimateextremesandeconomictransitionimpacts1/4millionjobsoftheglobalworkforceWherecountriesmayhavealowerproportionofworkerswithjobvulnerability,thereremainsasignificantnumberofpeoplewhoneedtomanagetheexposuretoclimateextremesandthecostsoftransitiontonet-zero.Forexample,whereSouthAmericascoreslowerintheIndexcomparedtoregionsinAfricaandAsiaPacific,itsCountrieswithhighestjobvulnerabilityarein:AsiaPacificAfrica+40%Highlyvulnerableworkforces:ofemploymentinexposedindustries“vulnerableworkforce”representsaround50millionworkers–anestimated50millionpeoplewhowillrequiretargetedtransitionsupportandurgentglobalclimateactiontoensuretheyhavemeaningfulworkinanet-zeroeconomy.Itwillbenosmallfeatforanyeconomytomanagethis,andthehighlylocalizedimpactoftheserisksrequiressignificantfocus.Figure4:GlobalVulnerabilityMorethan800millionjobs,andtheworkerswhofillthem,arehighlyvulnerabletoclimateextremesandeconomictransitionimpacts,basedonDeloitte’sanalysis.3Thisrepresentsmorethanaquarteroftheglobalworkforceandsignifiestheurgencyatwhichbothclimateactionandplanningforajusttransitionmustoccurglobally.4AccordingtotheIndex,thecountrieswithhighestjobvulnerabilityareintheAfricanandAsiaPacificregions.Manyworkforcesintheseregions,suchasworkersinIndiaandChina,havemorethan40%ofemploymentinexposedindustries(seethetechnicalappendixforafulllist).Whilenotallworkersintheseindustrieswillbeadverselyaffected,thedegreeofworkforcevulnerabilitytoextremetemperaturesandunplannedeconomictransitionishighlydependentonthemixofcapitalandlaborintensity,whichproducestheeconomicoutputinthoseindustries.GlobalriskswithlocalimpactFormanyAfricanandAsiaPacificeconomies,itisthismixofhoweconomicactivity,growth,andjobsareproducedthatcreatesa“perfectstorm”toincreasetheexposureofboththeirworkersandthejobsthatcreatetheirlivelihoods..Theseregionshavethehighestphysicalclimaterisksfromincreasingglobalaveragewarmingduetotheirlocations,andtheirlocationstypicallyincludehigh-emissionsindustries,whicharealsoincrediblyvulnerabletoanet-zerotransitionifplannedpoorly.Theeconomicimpactsofbothriskswillcompoundovertime,eachreinforcingtheother.Thismeansthatthoseglobaleconomieswiththemosttolosefromuncheckedclimatechangealsohavethemosttolosefromafailuretoplandecarbonizationtomitigatetheimpactsofachangingclimate.This“double”riskcreatesdisproportionateinequalityinwearingtheburdenofclimatechangeandtransitioncosts.3031WorktowardnetzeroClimateriskMajordriverofjobvulnerabilityClimateriskMajordriverofjobvulnerability43%shareofregionalworkforceinvulnerableindustries43%shareofregionalworkforceinvulnerableindustriesAsiaPacificAfricaTransitionriskMajordriverofjobvulnerability27%shareofregionalworkforceinvulnerableindustriesAmericasFigure5:GlobalJobVulnerabilityIndexJobVulnerabilityIndexIncreasingvulnerabilitySource:DeloitteEconomicsInstituteanalysis.RefertoTechnicalAppendix.3233Worktowardnetzero25%shareofregionalworkforceinvulnerableindustries28%shareofregionalworkforceinvulnerableindustriesMajorindustryvulnerableHeavyindustry&manufacturingMajorindustriesvulnerableConventionalenergy&miningHeavyindustry&manufacturingSource:DeloitteEconomicsInstitute(2022)24%shareofregionalworkforceinvulnerableindustriesFigure6:Location-basedJobVulnerabilityIndex–theUnitedStatesLocation-basedJobVulnerabilityIndex—theUnitedStatesZoomingin:VulnerabilityacrosstheUnitedStatesAcrosstheUnitedStates,theshareofvulnerablejobsintheUnitedStatesislowerthanotherregions.Butthisdoesnotmeantherisksarelowandtherecanbeeconomiccomplacencywhenitcomestoclimateactionandplanningfordecarbonization.Itmeansthenationalvulnerabilityriskmasksthehighlylocation-basedimpactsofclimateandtransitionrisk.Morethan13millionjobsintheUnitedStateshaveahighvulnerabilitytoclimateextremesandeconomictransitionimpacts.5Afailuretoplanandmanagedecarbonizationcouldbethebiggestdriverofeconomicimpactsonjobsconcentratedintheenergy-producingsouthernstates,suchasTexasandLouisiana.Jobsintheseregionsareconcentratedinindustriesandactivityhighlyreliantonfossilfuels.Today,morethanone-quarteroftheworkforceintheseregionsisemployedinthesehighlyvulnerableindustries.Similarly,withtheirconcentrationofheavymanufacturingindustries,statesaroundtheGreatLakes,suchasMichiganandIndiana,willneedtorapidlyplanforglobalanddomesticdecarbonizationtoadoptinnovativelow-emissiontechnologies.Afailuretoproactivelyplanfordecarbonizationinawaythattransformsdemandfortheirindustriesandreorientstheskillbaseoftheirworkersincreasesjobvulnerability.Whileunplannedtransitionriskdominates,stateswithlargeagriculturalsectors,suchasIowaandKansas,havegreaterriskofclimateimpacts,whichcouldcompoundwithtransitioncosts.Here,increasedclimateextremeswillreduceproductivityandhindereconomicgrowthinindustriesthatneedtomanagedecarbonizationsimultaneously.MajorindustryvulnerableAgricultureJobVulnerabilityIndexIncreasingvulnerability3435Worktowardnetzero3503Creatingjobopportunitiesinajusttransition34Worktowardnetzero3637WorktowardnetzeroThejobdividendfrommakingthetransitionworkforallismorethan300milliongloballybyiiiadditionaljobsTheseshiftswillcontributetodeclineofemissions-intensiveindustriesandassociatedjobsasnewtechnologiesandactiveandemergingindustriesdeveloptodisruptthatactivity.Thiswillhaveimportantflow-onimpactsforworkforceseverywhere.Butwherethereisadeclineinjobnumbers,itdoesnotmeanthepeople,ortheirskills,disappear.Thismakesinvestmentinnewindustriesandareasofeconomicdemandthatdeliverbothdecarbonizationandjobcreationanimportantfeatureofanysuccessfultransition.DeloitteEconomicsInstitutemodelingshowsthatwithboldclimateplaysandactivetransitionpolicyinthecomingdecade,allregionsgloballycanhaveastrongereconomy.6Thiseconomicoutcomereflectsasuccessfulglobaltransitiontonet-zero,wheretheimpactsofclimatechangeareminimizedandjobopportunitiesarerealized.37Reachingnet-zeroemissionswillfundamentallychangetheglobaleconomy.Itwillinvolvehardshiftsinindustrialpolicy,energysystems,andconsumerbehavior.3839WorktowardnetzeroNet-zeroisachievedby2050,andeconomieshavetheappropriateskillsandworkforcetoaccelerategrowthoflow-emissionsindustries.Costoftransitiontoworkersisminimizedbyplanningforequitableemploymentoutcomesfromtoday.Economylookslike:Workforcelookslike:•Rapidpathtonet-zero•Centralroleforgovernment•Regulatoryframeworks•Market-basedmechanisms•Capitalreallocation•Cleantechdiffusion•Identifiedskillgaps•Newskillpathways•On-the-jobtraining•Microcredentialsforin-demandskills•JobcreationinnewindustriesActivetransition3938Economylookslike:Workforcelookslike:•Delayedpathtonet-zero•Governmentabsent•Mismatchedincentives•Noformalmarketmechanism•Slowcapitalreallocation•Delayedcleantechadoption•Noskillgapplanning•Mismatchedjobdemand•Firmsunpreparedforemergingskillrequirements•LowerandslowerjobgrowthPassivetransitionNet-zeroisachieved,butworkforcepolicyisnotcoordinatedwithdecarbonizationpolicy,resultinginaskillsandjobmismatchthatlimitsgrowthoflow-emissionsectorsandeconomies.Therearenoactivepoliciestosupportthemovementofworkersfromdecliningindustriesintogrowingones,whichincreasesinequalities.Figure7:SummaryofactiveandpassivetransitionconceptsWorktowardnetzeroAtaleoftwotransitions40Worktowardnetzero414141Thejobsdividendrepresentstheadditionalleveloftotalemploymentinaneconomyincomparisontoapassivetransitionpathway.Theanalysisshowsthattheglobaleconomyandtheworkforcethatmakesitrequiressupport—oranactivetransition—todelivernet-zeroemissionsandoffsetthecostsoftransition.7Justlikethereisnofreerideforbusinessandindustryintheshifttonet-zero,governmentsaroundtheworldwillneedtocarefullyplanthepolicies,investments,regulation,andincentivesthatcreatethenet-zeroworldtheyhavecommittedto.Targetedactionisrequiredtoovercomeinherenteconomicvulnerabilitiesandexposuretobothclimateandtransitionrisk.Activetransitionassistancemakesthetransitionworkforallandcreatessignificantjobopportunities,relativetoapassivetransitionwithlimitedpolicyinterventions.MakingthetransitionworkforallBecauseopportunityintransitioncanbecreatedbyplanningforequity,guidingandcoordinatingapathtonet-zerobyusingtheworkforceasaninputintodecarbonizationcancreateasignificantjobdividendandpositiveemploymentoutcomesforworkersandcommunitiestoday,aswellasforfuturegenerations.Withoutthisactivecoordination,theshifttonet-zerorisksbeingdisorderlyandoccurringatahighercosttotheeconomyandjobs.Allowingapassivetransitionwilllikelybeafunctionofpoorplanningandpoortiming.Itisexpectedtoleadtohigherunemployment,underemployment,andslowerjobsgrowthasindustriesstruggletofindtherightworkersandskillstomeettheneedsofalow-emissionseconomicsystem.Thismakesforaslowandlow-growthtransitiontonet-zero.4243WorktowardnetzeroActivetransitionD.Climate-modeledemploymentgrowthandpolicyassistedtransitionPassivetransitionD.Climate-modeledemploymentgrowthandunplannedworkforcechangeinadisorderlytransitionEmploymentgrowthJobdividendFigure8:Modelingthejobdividendcreatedbyactivetransition20212050TheDeloitteEconomicsInstitutehasmodeledthe“jobdividend”ofglobaleconomiesachievingnet-zeroonacoordinatedandactivelysupportedglobaltransitionpathway.Thedividendreflectstheuniversalroleanequitabletransitioncanhaveinensuringjobcreationandimprovedemploymentoutcomesaseconomiesdecarbonize(figure7).Thedividendrepresentstheadditionalleveloftotalemploymentinaneconomyorindustryincomparisontoapassivetransitionpathway.Boththeactivetransitionscenarioandthepassivetransitionscenarioarecomparedtoa“baselineworldview”thatdoesnottransitiontonet-zeroemissionsandexperiencesincreasinglysignificantclimatechangecosts.ThisbaselinescenarioalignstotheDeloitteEconomicsInstituteanalysisintheTurningpointseriespresentedfortheglobaleconomy,AsiaPacific,theAmericas,andEurope,intermsofthe“nofurtheractionfromtoday”pathway.Modelingthejobdividendfromanactivetransition42Worktowardnetzero4445Worktowardnetzero45AsiaPacific180millionAfrica75millionEurope21millionAnactive,ratherthan,passivetransitioncouldcreate:intheGreenCollarworkforceareusedinthecurrentworkforceskillsoftherequired80%additionaljobsGlobalnet-zeroin2050underanactivetransitionadditionaljobsadditionaljobs44Americas26millionFigure9:Thejobdividendfromanassistedtransition,comparedwithapassivetransitionadditionaljobsWorktowardnetzero4647Worktowardnetzero47Chinamorejobsby2050underanactivetransition,comparedwithapassivetransition38millionZoomingin:China’sjobdividendWithactivepolicysettings,Chinacouldhaveanadditional38millionjobsby2050,incomparisontoapassivetransition.Thesejobswillbefoundintraditionalareasofeconomicstrengthbutalsobythegrowthofnewlow-emissionsindustries.Forexample,China’swholesaleandretailtradesectorisexpectedtohaveanadditional5.5millionjobsin2050,comparedtoapassivetransition.Energy-intensivemanufacturing,whichcurrentlyemploysmorethan20%oftheworkforce,couldfacesignificantchallengeswithanunplannednet-zeroeconomicshiftandassociatedtechnologychanges.Underanactivetransitionwithstrategicindustryinvestments,anadditional7millionjobscouldbecreatedby2050inthemetal,technology,chemical,andothermanufacturingindustries,whencomparedwithapassivetransition.China46Figure10:Zoomingin:Country-specificjobdividendWorktowardnetzero4849Worktowardnetzero495millionmorejobsby2050underanactivetransition,comparedwithapassivetransitionUnitedStatesUnitedStates48Zoomingin:UnitedStates’jobdividendTheUnitedStatesiswellplacedtonavigatethenet-zerotransitionrelativetootherregions.However,workforcesinsomestates,particularlytheenergy-producingsouthernstates,arevulnerableandrequireanactivetransitionanddecarbonizationpolicytocreateajobdividend.Withproactivepolicydecisionsinthenextdecade,theUnitedStatesisexpectedtocreateajobdividendmorethan30yearsearlier,comparedtoapassivetransition.Thismeanstheeconomyisnotonlygrowingbutcreatingjobsintherightindustriesandregionsby2039,comparedto2070.Figure11:Zoomingin:Country-specificjobdividendWorktowardnetzero5051Worktowardnetzeromorejobsby2050underanactivetransition,comparedwithapassivetransitionIndia74million51Zoomingin:India’sjobdividendIndia’sworkforceandeconomyareespeciallyvulnerabletotheimpactsofclimatechange.Thismeansithasmuchtogainfromanactivetransition.Indiaisexpectedtohave74millionadditionaljobsby2050underanactivetransitionpath.Asignificantproportionofthesejobsareintheservicesindustries(27million),whichincludesgovernment,financial,andbusinessservices.Further,awell-plannedtransitionallowsforthediversificationoftheagriculturesector,resultingin5millionmorejobsin2050,whencomparedtotheoutcomesofapassivetransition.India50WorktowardnetzeroFigure12:Zoomingin:Country-specificjobdividend5253Worktowardnetzero04BuildinganewGreenCollarworkforce5352Worktowardnetzero5455WorktowardnetzeroFundamentaltransformationtoalow-emissionseconomyAnet-zeroglobaleconomyJobdividendHowthetransitioninfluencesthetypesofworkandskillsneededtodelivernet-zeroandthejobdividendFigure13:Net-zerowilldemandandcreateaGreenCollarworkforceGREENCOLLARWORKFORCEBOTHCREATESTHE2050FUTUREANDTHENISTHEFUTUREBY2050additionaljobsfrommakingthistransitionworkforall300MGreenCollarworkforceTheGreenCollarworkforcereflectshowglobaldecarbonizationisalreadychangingtheworkforcetodayandhowitcouldremakethefutureofworkforanet-zeroworld.Ultimately,it’saboutaugmentation,ratherthandeclineduetodecarbonization.Whilejobsarechangingbecauseofeconomictransition,theywillnotdisappearaltogether.Justlikehowanet-zeroeconomywillnotbeasupersizedversionoftoday’seconomy,thetypesofworkandtaskspeoplewilldoinitwillalsochange.Reachingglobalnet-zeroby2050willtakenothingshortofanindustrialrevolutioninlessthan30years,andnewtypesofwork—differentoccupations—areneededtoachievethis.Thesenewoccupationswillfilldemandintransitioningindustriesandnewdemandinentirelynewindustries.AGreenCollarworkercanbeanofficeworkeroramanuallaborer.It'snotabouttheindustry,location,orskillsofaworkerthatmakesthemGreenCollar:it'sabouthowdecarbonizationdoesordoesn’tinfluencetheirworkandtheirskills.Someexistingoccupationswillneedtotransform,othersmayonlyneedtochangeatthemargins,andentirelynewoneswillemergeastheGreenCollarworkforceshapesthefutureofwork(figure13).55Theeconomicsofthetransitiontonet-zeroemissionswillrequire–andcreate–aGreenCollarworkforce.5657Worktowardnetzero57TheDeloitteEconomicsInstitutehasestablishedfivecategoriesofoccupationsthatdefinetheGreenCollarworkforcetoday.Threeoutofthefivecategoriesrepresentthetypesofworkthatwillsignificantlybenefitfromtheglobalchangesbroughtonbydecarbonization.(seetechnicalappendixfordetail)ThecompositionoftheGreenCollarworkforceTwocategoriesrepresenttypesofworkthataremoreexposedtotherisksofunmanagedcostsfromthetransitiontonet-zeroandclimatechangedamages(figure14).WhilealltypesofworkintheGreenCollarworkforcehavethepotentialtobenefitfromanactivetransitiontonet-zero,someoccupationsrequiregreaterprioritizationandfocustopromoteequitableoutcomesforthosecurrentlyemployedinthem.575859WorktowardnetzeroOldeconomyatriskNeweconomyemergingThreeoutofthefivecategoriesrepresentthetypesofworkthatwillsignificantlybenefitfromtheglobalchangesbroughtonbydecarbonization.IncreaseindemandforjobswiththeseskillsNewjobsthatwillemergeandbecomeprominentHighexposuretophysicalclimatechangesHighjobvulnerabilitytounplannedtransitionExistingjobswheretherequirementsareexpectedtochangeBlue+WhitecollarexistingskillsBlue+White+Greencollar(existingandnew)skillsFigure14:CategoriesthatmaketheGreenCollarworkforceGrowing-demandjobsTransformedjobsNewnet-zerojobsEmissions-intensivejobsClimate-dependentjobsofskillsrequiredintransformedandnewnet-zerojobsintheshort-to-mediumterm,areusedinthecurrentworkforce80%Twocategoriesrepresenttypesofworkthataremoreexposedtotherisksofunmanagedcostsfromtheeconomictransitiontonet-zeroandtheimpactsofclimatechange.6061WorktowardnetzeroWhilethetasksoftransformedjobschange,therearesomerolesthatchangesosignificantlythatanewnet-zerojobemerges.Anexampleofthisistheemergenceofafuelcellengineerastheglobalhydrogenindustrygrows.ThesejobsarebeginningtoemergebutJustasthetypeofworkischanging,so,too,aretheskillsrequiredtoperforminanet-zeroworkforce.Suchashiftisnotnew;theskillsrequiredinthelaborforceareconstantlyevolving,reflectingchangesindevelopment,technology,andpreferences.Itisanimportantcomponentofdrivingfutureprosperity.Inlinewiththis,therearejobsthatwillbetransformedoverthetransitionperiod.Theseroleshavetasksthataretiedtoemissions-intensiveactivities,withthedecarbonizationoftheeconomyaffectinghowtheseNewnet-zerojobsarenewjobsthatwillemergeandbecomeprominentasnewtechnologyandprocessesareadoptedduringthetransitiontonet-zero.Newnet-zerojobsTransformedjobsareyettobeidentifiedintheoccupationclassificationframeworkofmanyeconomies.Itisexpectedthatovertime,thegrowthofnewnet-zerojobswillbesosubstantialthattheywouldberecognizedinnationaloccupationclassifications,andeducationandtrainingcourseswillprovidedirectpathwaysintotheseroles.jobsareperformed.Anexampleofthisishowthesteelmakerprofessionwillchangeasthesteelindustryusesgreenhydrogenratherthancoalinprocessing.Thetransformationoftaskswillrequireworkerstolearnnewskills.Itisexpectedthatformostoftheseoccupations,thisupskillingcanbedoneonthejoborthroughashortcourse.Astheskillrequirementsoftheserolestransform,theeducationandtrainingsectorwillneedtoberesponsive(e.g.,modularchangestocourses)sothatnewgraduateshavetheskillsindemandbytheindustry.Transformedjobsareexistingjobswheretheworkandworkerrequirementsareexpectedtochangeastheglobaleconomytransitionstowardnet-zero.Workerswhoareemployedinemissions-intensiveindustrieswilltypicallyexperienceadirectimpactfromthenet-zerotransition.Theywilllikelyeitherbedisrupted,withnojobtoreturnto,duetopermanentchangesindemandortechnology(i.e.,reduceddemandforlaborinhighlyconcentratedfossil-fuelsectors,suchasthermalcoalminers)orthedisruptioncouldbetemporaryanddirectemploymentpathwaysintootherindustrieswillexist(e.g.,electricians,engineers,administrative,andmanagerialworkersinfossil-fuelsectorswherethereisstrongdemandacrossotherEmissions-intensivejobsindustries).Theseworkerscouldalsofindemploymentwithintheindustry,astheindustryrestructures(e.g.,growthofthecarbonfarmingindustryinagriculturethatoffsetsdisruption).Inmanyeconomies,manyofthesevulnerableworkers(likecropfarmworkersandcoalminers)arealreadyexperiencingdisruptionduetoautomationandtechnologychange.Butwhereeconomiesstillhavelabor-intensiveindustriesthatarealsoemissions-intensive,theworkforceimpactswillbemoreacuteandsevere—thereissimplymoretolose.Justasthetransitiontonet-zerowillcausedisruptiontosomeworkers,itwillalsoprovideapositiveimpactonjobsgrowthinmanyareasoftheeconomy.Forexample,demandinmanufacturing,constructionandcriticalmineralsminingindustrieswillbestimulatedasnewindustries,suchasgreenhydrogen,emergetoaidthetransitiontonet-zero.Theemergenceandexpansionoflow-emissionssectorswillgrowdemandGrowing-demandjobssupportgeneraldevelopmentacrosstheeconomyandwillbeakeyinputtotheemergenceandexpansionoflow-emissionssectors.Demandforthesejobswillincreaseunderthetransitionperiod,buttheskillsandtasksoftherolewillnotdramaticallychange.Growing-demandjobsforalargecohortofoccupations.Manyofthesejobsalreadyexistintheeconomy,suchasprojectmanagers,someengineers,laborers,scientificservices,andtradeworkers.Theimpactofdecarbonizationisnotexpectedtofundamentallychangetherequirementsofworkersintheserolesbutjustincreasetheoveralldemandforjobswiththeseskills.Emissions-intensivejobsaredirectlyrelatedtoanemissions-intensiveactivityorindustrialprocess.Asglobalenergygridsandtheproductionofgoodsshiftawayfromfossilfuelsandhigh-emittingindustrialprocesses,itisexpectedthatdemandforlaborinthesejobswilldeclineastechnologyandindustrieschange.6263Worktowardnetzero63Reachingnet-zeroby2050willmitigatethemostcatastrophicimpactsofclimatechange.However,overthecomingdecades,theworldwillexperiencerisingtemperaturesbecauseofhistoricalemissionsalreadyintheatmosphereandthosethatwillbeemittedbeforenet-zeroisachieved.Warmingcausestheclimatetochangeandresultsinproductivitylossesandphysicaldamagestothefactorsofproductioninaneconomy—theuseofland,thewaypeoplework,andcapitalflows.Theseverityofthesedamageswilldependonaregion’sexposuretoclimate-relatedextremeweatherevents(i.e.,flooding,heatwaves,storms)andaneconomy’srelianceonecosystemservices.Itisexpectedthatsomeworkerswithintheseclimate-reliantjobswillexperiencenegativeimpacts,bothintermsofharsherworkconditionsandlabordisruption.Extremeheateventsandtheassociatedheatstressonworkersaresignificantconcernsforthehealthandsafetyofworkersandtheirabilitytoperformtasks.Beforeserioushealthconsequencesarereached(suchasheatstrain/strokeorevendeath),atlowerlevelsofheatexposureworkersaresubjectedtodiminishedabilityformentaltasks,diminishedcapacitytoworkatatypicalperformancelevel,andhigherriskofaccidentsincertainjobtypes.Climate-reliantjobsarethosedirectlyrelatedtoactivitiesthatrelyontheenvironmentandaremoreexposedtoclimateextremes.Climate-reliantjobsTheresultingimpactswillparticularlydecreaselaborproductivityinrolesthataretypicallymanual(physicallabor)andexposedtotheelements(outdoors),suchasconstructionlaborersandfarmworkers.Heatstresswillalsoaffectworkerswhoarenotasdirectlyexposed,asbroaderhealthimpactsemergeandeconomiestrytoadapttoharsherenvironmentalconditions.Theseimpacts,aswellasotherclimateextremes,willlikelybefeltacrosseconomiesevenastheydecarbonize.Thiswillforcebusinessestotransformtraditionalprocessesandprocedurestoincreaseoccupationalsafetyforworkers,liftlaborproductivity,andensurebusinessmodelsareresilient.Beyondthedirectinfluenceofheatstressonworkers,climatedamagesextendtonaturalcapitalinputs,suchasnaturalresources,land,andecosystems.Howeconomiesgrowandemploymentiscreatedisdirectlyrelatedtotheclimate.Asextremeweathereventsbecomemoresevereandfrequent,businessesmaybeforcedtoreduceproductionorprices(orproducelower-qualitygoods),whichcandecreasethedemandforworkers.Underacoordinatedandtimelyglobaltransitiontonet-zeroby2050,withaviewtoadaptation,itisexpectedthatjobdisruptiontoclimate-reliantjobscanbeminimized.6465WorktowardnetzeroFigure15:Timingofoccupationalchangeamongcoreoccupationcategoriesbetween2022-2050Note:Impactswillbefeltacrosstheentiretransitionperiod.Thisfigureillustrateswhentheimpactsareexpectedtobemostsevereforeachcategory.Source:DeloitteEconomicsInstitute;ONETGreenCategories.Forethoughtfromtodayastohowtheskillsofdisruptedworkers(suchasthoseinemissions-intensiveandclimate-reliantjobs)canberedirectedtoneweconomicactivitiesthatcanpreventperiodsofprolongedunemploymentforthesevulnerableworkers.Atthesametime,theeconomywillneedmoreworkerstofillgrowing-demandandnewnet-zerojobstohelpensurethetransitioncanbedeliveredatpaceandscale.Overtheshort-to-mediumterm,structuralemploymentshiftswillresultinfundamentalchangestohowcertainjobswillbeperformed.Thisistheperiodwhereroleswilltransform,andnewskillswillberequiredtoperformtheseroles.Duringthistime,thecreationofnewandemergingjobswillbesignificantinthenewnet-zeroandtransformedjobcategories.Tomaximizethebenefitsofthistransitionperiod,policyforesightmusthavesupportedthecreationoftheseroles(throughindustrydevelopment)andapipelineofskilledworkers(newandupskilled).Bycreatingandreallocatingskillswheretheyareneededinanactivetransition,notonlywilltheGreenCollarworkforcebelargerbuttheglobalworkforcecangrowtohavehigherskilled,moreproductiveworkersinthelongterm.Importantly,howvulnerableworkersaremanagediscriticaltothisoutcome.Itrequirestheexistingskillsofworkers,regardlessofoccupationtype,tobeusedtocreateanet-zerofuture,ratherthanbeingaseenasareasontoresistit.FORETHOUGHTTRANSITIONTRANSFORMEDEMISSIONS-INTENSIVEGROWINGDEMANDNEWNET-ZEROTRANSFORMEDCLIMATE-RELIANTTodayShort-to-mediumtermLongtermTheemergenceoftheGreenCollarworkforceThedecisionswemaketodaysettheeconomicfoundationsrequiredtostructurallyadjustthewaypeoplework,whatjobspeopledo,andthetypesofjobsrequired.Withoutgettingthisright,thelabormarkettransitioncouldbeprolonged—delayingemploymentdividendsintheGreenCollarworkforce.Asdecarbonizationaccelerates,investmentwillbedirectedawayfromemissions-intensiveactivitiestowardlow-emissionsactivities.Mostjobscreatedduringthisperiodwillsupportthedevelopmentofnewtechnologiesandindustries(suchasthoseneededinthedesignandconstructionphaseoflargelow-emissionsprojects).Thesearejobsasweknowthemtoday,withasmallproportionofnewoccupationsstartingtoemerge.AstheGreenCollarworkforcewillbothcreateanet-zerofutureandestablishthetypesofjobsthatbecomethefutureworkforce,theimpactsoftransitiononeachoccupationcategorycanbedefinedinstagesthatrepresentthepathwaytoglobalnet-zeroby2050(figure12).6667Worktowardnetzero05Howskillsofferpathwaysandopportunityintransition6766Worktowardnetzero6869Worktowardnetzero69Skillsarethecurrencyinwhichwecanunderstanddisruptionintransition,minimizetheimpacts,andfacilitateoptimalemploymentpathways.AstheGreenCollarworkforceevolves,itisanticipatedthatonlyarelativelysmallnumberofjobswillbeimmediatelyandnegativelyaffectedbythenet-zerotransition(suchascertainemissions-Intensivejobs).Thisdoesn’tmeanthosejobsdisappear.Rather,theskillsoftheseworkersareincrediblyimportantindeterminingapathwayintoanewjobiftheyaredisruptedbythetransition.Formostotherworkersacrosseconomies,eitherintheGreenCollarworkforceornot(suchasteachers,nurses,accountants,hospitalityworkers,andsmallbusinessowners)decarbonizationoftheeconomyisunlikelytochangetheskillsrequiredintheirrole.ButthereislikelytobesubstantialskillingchangesforthoseintheGreenCollarworkforce—someofwhicharehighlyconcentratedinspecificregionsthatareidentifiedasvulnerableorhavinghighjobopportunities.Todeliverthejobdividendandeconomicopportunityofanactivetransition,thereisaneedtothinkbeyondjustthetypesofworkandaboutthespecificskillsofworkers.7071WorktowardnetzeroFigure16:Skillsofferpathwaystonewwork80%ofskillsrequiredintransformedandnewnet-zerojobsintheshort-to-mediumterm,areusedtoday.20%80%NewskillsThegenerationofuniqueworkandworkerrequirementsfromanet-zerotransition.Thiscreatesnewskillsforworkerstoperformandretiresotherskillsthatarenolongerrelevantinthenet-zerocontext.ExistingskillsTheseskillsarecurrentlyperformedintheeconomyandareunlikelytofundamentallychangeaseconomiesdecarbonize.GreenCollarworkforceEmissions-intensivejobsSkillscanmatchorchangetofindpathwaysintonewworkGrowing-demandjobsTransformedjobs80%ofskillsrequiredexisttoday20%ofskillswillneedtobenewNewnet-zerojobsClimate-reliantjobs80%20%DeloitteEconomicsInstitutemappingofexistingskillsintheworkforceshowsthat80%oftheskillsrequiredintheshort-to-mediumtermtoachievenet-zeroemissionsby2050exist.Thismeansmostcurrentworkersarelikelytorequireupskilling(i.e.,on-the-jobtraining),ratherthancompleteretraining(i.e.,obtaininganewqualification)toremainintheircurrentjobtypeortogainanewjobduetodecarbonization.Today’sworkershavewhatittakesItalsomeansthatbecausemostskillsrequiredalreadyexist,workersintheGreenCollarworkforcewhoarevulnerabletotransitionandclimateimpactscanhavemoreimmediatepathwaysviatheirskillsintoanewjobtype.Itistheskillsofworkersthatfacilitateemploymentopportunitiesaseconomiesdecarbonize.Skillsofferapassportintonewwork.Butpathwaysarenotalwaysimmediateoreasyforworkers,andthereisanimportantroleforpolicyincreatingandfacilitatingtheseskillingpathwaysforworkersintheGreenCollarworkforce(figure16).7273Worktowardnetzero06SettingapolicyagendafortheGreenCollarworkforce7372Worktowardnetzero7475WorktowardnetzeroEachregionwillhaveitsownuniquepathwaytoachievenet-zeroemissionsby2050.Knowingthedisruptionandopportunitiesthatareexpectedtofalloutofthetransitionforjobs,occupations,andskillshelpstoinformthelevelandtypesofpolicysupportrequired.TheDeloitteEconomicsInstitutehasdevelopedaGreenCollarworkforcepolicyagendatoguidewhatdecision-makersneedtoconsiderinsupportingindustriesandworkerstoadapttoglobaldecarbonization(figure17).Figure17:PolicyagendaforaGreenCollarworkforceAMBITIOUSDECARBONIZATIONTARGETS…alignedwiththelatestclimatescienceandinvestmentsinrapiddecarbonization…targetstraditionalstrengthsandnewareasofeconomicgrowth…establishessecurecareerpathwaysforworkersandgraduates…producesaskillspipelinethatalignstoindustrydemandsfortransition…labormobilitypoliciesdirectskillstowheretheyareneededSTRATEGICINDUSTRIALPOLICYHIGH-VALUEJOBCREATIONADAPTIVEEDUCATIONANDSKILLSSYSTEMACTIVESKILLSREALLOCATION757677WorktowardnetzeroSettingambitiousinterimemissions-reductiontargetsUsing‘systemdeals’fornewindustrialIntheearlystagesoftransition,theprivatesectoraloneisunlikelytoprovidethelevelofemissionsreductionrequiredduetobarrierssuchascosts,natureofbeneficiaries,andinvestmentrequirements.Thismeansgovernmentsgloballyhavearoleinstimulatinganddirectinginvestmenttoareasoftheeconomywhereitwilldeliverstrongandequitableeconomicdividends.Stringentandambitiousinterimemissions-reductiontargetsbetweennowandachievingnet-zeroemissionsin2050arerequiredforthis.Clearlydefinedandimplementedinterimemissions-reductiontargetscanguideindustries,businesses,andindividualstomakeeffectiveinvestmentdecisionsforatimelyandcoordinatedtransition.Gettingthetimingofemissionsreductionrightiskeytoanactivetransitionthatwillleaveworkersbetteroffandlowerthecostsoftransitionforeconomiesoverall.Acceleratingprogresstowardnet-zeroemissionsandtacklingourtoughestclimatechallengeswillrequireextraordinarylevelsofcollaborationandcoordinationacrossemergingeconomicsystems.Systems,unlikeindustriesandmarkets,arenotgroupedbyactivitynordotheyhaveuniversallydefinedboundaries.Instead,systemsareunifiedbytheireconomicpurpose.Thismeansdifferentkindsofeconomicactivitymakesystemsbroaderandmoreexpansivethantraditionalindustrydefinitions.Thestructureofasystemisdeterminedbyhowitselementscombinetodeliveronitseconomicpurpose.Asystem’supstreamindustriesprovidethenecessarymaterialsandfoundationsforaproducttoexist.Coreindustries,meanwhile,transformthesefoundationsintogoodsandservices.Downstreamindustriesbrokertransactionsbetweenthecoreindustriesandpurchasers.Inthemanufacturingsystem,forexample,upstreamindustriesextractrawmaterialsandprovidetheenergyusedinprocessing.Coreindustries(likecement,cotton,andsteel)transformtheseinputsintoproductsbeforedownstreamindustries,suchasretail,bringthemtothepublic.Similarly,manysystemssharecommonelements—likeindustriesandsupplychains—thatservemultiplepurposesineconomies.Theseoverlapscreatetheinterdependenciesthatreinforcetheneedforasystemsapproach.Forexample,awiderangeofcoreindustriesfortheenergysystem(likefossilfuels)providetheupstreamenergyusedinmanufacturing.Itfollows,then,thatdecarbonizingtheenergysystemwilldeliveremissionreductionsinthemanufacturingsystem.Asystem-of-systemsapproachrecognizesthatexistingindustrieswillbereconstitutedasaseriesofcomplex,interconnected,emissions-freesystems—energy,mobility,industryandmanufacturing,agricultureandlanduse,andnegativeemissions.Government,finance,andtechnologycanplayacatalyticroletounderpinandenablethetransformationofsystemsandemergenceofnewsourcesofjobsandgrowth.Thisnewgrowthmeansexistingskillswillhaveaplaceandnewskillsareindemandinanet-zeroworld.Butthespeedandscaleofsystemtransformationcomesdowntotheleversofchangebeingpulledattherighttime,intherightway.“Systemdeals”wouldrepresenttailoredarrangementsbetweencentralgovernment,industrybodies,specificfirms,research,andskillingorganizationstocollectivelydesign,fund,anddeliveronadefinedeconomicoutcomeinrelationtodecarbonization:Whatmusttheenergy,mobility,manufacturing,agriculture,andlandusesystemslooklikeby2050?Whatneedstochangetodaytoensuretheworkforcecandelivergrowthinthesesystems?Systemdealscouldbecentrallyledthroughgovernmentbutoperatedeliberatelyasamechanismforleadershipoutsideofgovernmenttosecureadvancementsinproductivityandeconomicpotential.Aspartofthis,governmentscanset“opendoor”challengestoindustrytodevelopproposalsthatlooktotransformsystemsandinvestmentstosupportemissionsreductionandeconomicgrowth.Importantly,systemdealsarenotjustaboutindustrypolicy.Theyareaboutthecombinedviewtoeconomicandworkforcedevelopmentforlong-termgrowthandsharedprosperity.Thismeanslocation-basedjobs,infrastructure,andindustrystrategiesmustgohandinhand,andthespecificskillsandlocationofworkersareaninputintosystemtransformation.7879WorktowardnetzeroGermanyhasnotonlybecometheleadmarketforelectricvehicles(EVs)inEurope,butitsautomotiveindustryisalsoamidanambitioustransformationprocess.Aftertheinventionoftheautomobile1886inGermany,theindustryhasaccomplishedalonghistoryinadvancingandproducingvehicleswithcombustionengines.Now,inrelativelyshorttimeframe,theindustryisgearinguptoswitchtoelectricvehicles.ThetransitiontoelectricmobilityinGermanyisatfullspeed–almosthalfamillionbatteryelectricvehicles(BEVs)andplug-inhybrids(PHEVs)werenewlyregisteredinthe9monthsfromJanuarytoSeptember2022.InSeptember,themarketshareofBEVshasclimbedto20%,whilePHEVsrepresent15%ofallnewsales.ivThereiscurrentlyasubstantialbackloginthesupplyofEVs,withdeliverytimesfornewvehiclesrangingonaveragefrom8to11months.vThisfastmarketramp-upwasdrivenbyarangeofdemandandsupply-sidepublicpolicies:•AnimportantpolicyinstrumentistheEUregulationonCO2emissionperformancestandardswhichrequiresoriginalequipmentmanufacturers(OEMs)toachievegradualreductionsintailpipeemissionsofnewvehiclesby2030(andeventuallyabanofnewsalesofcarswithcombustionengines,plannedtokick-inaroundmid-2030s).•TostimulateconsumerdemandinGermany,therearegovernmentincentivesinplace,wherepremiumsarepaidtobuyersofEVstomakethemmoreeconomicallyattractive(upto9,000€perBEVin2022butsettodeclinefromJanuary2023asthemarketisbecomingmature)andasubstantialreductionofincometaxratesfortheprivateuseofelectriccompanycars.ThetransformationofGermany’sautomotiveindustryischallengingforOEMsandsuppliers,especiallybecauseofacompletechangeofproductionprocessesandtheneedtodevelopnewtechnologies.Astherearedifferencesintheskills,tasksandworkersrequiredtobuildelectriccarscomparedtovehicleswithcombustionengines,thereareimportantworkforceandskillingconsiderationstobefactoredintopolicyandworkforceplanning.ThisaffectslargepartsofGermany’sworkforce.IntheStateofBaden-Württemberg,halfamillionpeopleareemployedintheautomotiveindustryvi,representing10%ofthetotalworkforce.WhileGermanOEMsarereactingbyextendingtheirvaluechaintosecureemploymentandrevenuestreamsvii,theautomotivesuppliersareunderpressure.Theindustryneedsresourcestoaddressmarketdriverslikeautomatedvehicles,automationofproduction,digitalizationandsharedmobilityViii.Publicpoliciestomaintainlocalemploymentarecrucialandregionalagencieshavebeenestablishedearlytoaccompanythetransitionwiththeaimtorepurposeworkersintheautomotiveregions,includingBayern,Nordrhein-WestfalenandBaden-Württemberg.•Anexampleise-MobilBWinBaden-Württemberg,whichwasalreadyestablishedin2010.Thiscentralagencyforinnovationinelectricmobilityiswellconnectedwithpartnersfromindustry,universitiesandpublicinstitutionswiththegoaltojointheeffortofshapingthetransformationintechnologytoasuccessfuloutcome.Asanexample,itprovidesaplatformforknowledgebuild-upandtransferonnewcomponents,productsandbusinessmodelsrelatedtotheautomotivesectorandnewmobilitysolutions–fromelectricmobilityanddigitizationtothehydrogensector(asthelatterrepresentsnewmarketopportunitiestosuppliers).ThevalueoftheagencyisespeciallyrecognizedbythenumeroussmallandmediumsizedcompaniesintheStatewithsometimeslimitedresourcesforstrategicplanning.79ZoominginAutomotiveindustrytransformationinGermany78Worktowardnetzero8081WorktowardnetzeroThePhilippinesishighlyexposedtotheimpactsofclimatechange.Recognizingitsvulnerability,thePhilippineshasembarkedonanextensivedevelopmentandrealignmentofnationalpoliciesoverthepastdecadetolinkthecountry’ssustainabledevelopmentwithgreenindustrialization.Whilechallengesremain,thePhilippinesrecognizedthatthestructuralshiftsassociatedwithclimatechangewereanopportunityforeconomicvalue-addingandjobcreation.Policyfoundationsunderpinningthefocusongreenskillsandjobsincludethefollowing:•Nationallydeterminedcontributionsix–ThePhilippineshasparticularlyambitiousplansundertheParisAgreementcompatiblewithkeepingglobalwarmingbelow2°C.•ThePhilippineDevelopmentPlanx–Theplantakesalong-termapproachtopromotinggreenjobsandlinksittothecountry’ssustainabledevelopment.•TheGreenJobsActof2016xi–TheActprovidesalegalframeworkdesignedtogenerateandsustainthetransitiontoagreeneconomyandincentivizethecreationofgreenjobs.Whentheinitialresearcharoundgreenjobswasconductedin2010,therewerenoapparentskillshortages.xiiButthePhilippinesanticipatedtheimportanceofaskilledandcapableworkforceinenablingtheshiftinindustrial,agricultural,andservicessectorsandinprotectingcommunitiesfromclimatechangerisks.UndertheGreenJobsAct,theDepartmentofLaborandEmploymentwasresponsibleforthedevelopmentofaNationalGreenJobsHumanResourceDevelopment(HRD)Plan.Thissoughttoidentifyskillsandskillgaps,developtrainingprograms,andupskillworkersforjobsingreenindustries.TheplanintegrateswiththeILO’s“justtransition”policyguidelinestoprovidedecentworkforallandhasinvolvedextensiveconsultationandsocialdialoguewithworkersandemployers.xiiiTheDepartmenttookasectorapproach.Prioritywasgiventodevelopinggreenjobsinagriculture,fisheryandforestry,manufacturing,transportation,tourism,wastemanagement,energy,andconstruction.Tounderstandhowgreenjobsmaygrowandevolve,profilingofthesesectorswasconducted.Theresearchalsoidentifiedjobsthatwillbedisplaced,created,andtransformedinthetransition.Thisresearchunderpinnedamodernizationofthehighereducationandtechnicalvocationaleducationandtraining(TVET)programstosupporttheskillneedsofthegreeneconomy.Thisincludedgreeningthegeneralcurriculumbyaddingspecificgreencompetenciesintoexistingqualifications(forexample,thedesign,installation,andservicingrequirementsforsolar-powersystemsintheconstructionsectororintegratedpestmanagementinagriculture).xivAGreenTechnologyCenterwasestablishedforthedevelopmentofmorespecificgreenskillsthroughgreenskillstrainingcoursescateringtotheneedsofemerginggreenjobs.TheGreenJobsActalsosupportsgreengrowththroughincentives.Thisincludestaxdeductionsforbusinessexpensesforskillstrainingandresearchanddevelopment,aswellastax-freeimportationofcapital,whichsupportsthegrowthofgreenbusinessesandthecreationofgreenjobs.Zoomingin:GreenCollarskillsandjobsinthePhilippinesSource:AdaptedfromUNDPNDCSupportProgram(2018);RepublicofthePhilippines(2016)Workershavevaluableskills,knowledge,andexperiencethataretransferabletootherareasoftheeconomywheretheycanaddmoreordifferentvalue.Buttheabilityofaworkertotransferthatvalueiscontingentontheeconomydemandingtheirskills.Balancingthecostsandbenefitsoftransitiontonet-zeroismorethanaboutprovidingadisruptedworkerwithanewjobopportunity.Rather,it'saboutprovidinganemploymentpathwaythatisofequivalentorhigherqualitytoensuretheirlivingstandardsandengagementinworkaremaintained.Thismeansnewjobandskillpathwaysintransitionmustofferequivalentorbetteroutcomesintermsofwage,workingconditions,andjobsecurityandidentifywithaworker’scareerpurposeandambitions.Someworkersmaychoosetorelocateduringthetransitionperiodtomeettheseobjectives.Butforpolicytoachieveinclusiveandequitablegrowthintransition,thereshouldbeenoughjobopportunitiesinregionalandremoteregionstostabilizelocalworkforcesandmaintainpopulationsduringthehardesttransitionperiods.Ifpolicyallowsfortransitiontocreateregionaldeclineandsocioeconomicdisparities,thiswilllikelyreinforceentrenchedeconomicdisadvantagesandlowergrowthandstandardsofliving.Policyshouldaccountforthisandactivelyovercomesuchrisk.Thereisaneedforallpolicyareas,whetheritbeeconomicandindustrydevelopmentplanningorhealthandsocialpolicytoincorporatethinkingonwhatdecarbonizationmeansinrelationtothisfromtoday.Place-based"systemdeals"areonesuchmechanismthatcanbeusedtobalanceeconomicoutcomeswithinandacrossregionstocreatehigh-valuejobgrowththatprovidesskillpathways,regardlessofpolicyarea.Developingskillpathwaysintohigh-valuejobs818283Worktowardnetzero•Newcourses:Asnewoccupationsemerge,newtrainingandhighereducationcourseswillneedtobeestablishedtosupportthedevelopmentofaskillspipelineintotheGreenCollarworkforce.•Createnewmodesofdelivery:Neweconomicstructureswillrequireworkerstohavebothqualificationsasweknowthemtodayandanabilitytoobtainincrementalskillsrequiredtooptimizeproductivityandtheiremploymentpathwaypotential.Practically,thiswouldrequireeducationproviderstooffermoreflexible,modularcoursesthatcatertoawiderangeoflearnersandprovidetargetededucationopportunitiestogainpracticalskillstorapidlytransitionfromonecareertothenext.Fortunately,therearealreadyindicationsthattheeducationsystemisevolvinginthismannerinresponsetochangingconsumerpreferences(i.e.,microcredentials).Iftherightskillsarenotdevelopedinthelaborforce—particularlyforthosewhosejobsarehighlyvulnerabletoclimateandtransitiondisruption—economieswilllikelyexperiencehighercostsofmitigation,adaptation,andtransitionoverthelongterm.Theeducationandtrainingsectorisanimportanteconomicpolicylevergovernmentscanpulltoempowerpeopletoestablishnewandfulfillingvocationsinalow-emissionsfuture.Educationandtrainingsystemsgloballywillberesponsibleforupskillingandretrainingdisruptedworkersandhighschoolandcollegegraduatestofacilitatepathwaysintohigh-growthsectorswithin-demandskills.Thismeanstheeducationandtrainingsectorwillalsoneedtoevolveinlinewithdecarbonizationofeconomies.Suchchangemeanseducationandtrainingsystemswillneedtoconsiderthefollowing:•Increasescaleofdelivery:Understandthechangingneedsofindustryandupscaleenrollments(studentsandadults)asneeded.Thiswillbeparticularlyimportantforthecoursesthatcorrespondtothegrowing-demandjobs.•Coursemodifications:Expectedchangesindevelopment,technology,andpreferenceswillrequirecoursestobemodifiedinlinewithhowtheGreenCollarworkforceevolves.Thiswillbeparticularlytruefortransformedjobs,wheregraduateswillneedtobe“jobready”upongraduationandexistingworkerswillneedaccesstomicrocredentialstosupportupskilling(wherebusinessesdonothavethecapacitytoupskill).Ensuringanadaptiveskillsandeducationpipeline8485Worktowardnetzero•Workerswhoneedanudge:Policytocorrectformarketfailures,whereskilledindividualsarenotdirectedtotheareasoftheeconomy(eitherinoccupations,industries,orplaces)wheretheyareneededmost.ImprovingmarketsignalingforbothemployersandemployeeswillneedtobeacriticalpolicyfeatureofaGreenCollarworkforce.Policydirectsworkerstowheretheyaremostneededandaddthemostvaluetotheeconomy.TheportfolioapproachisnotjustaboutensuringequityintheGreenCollarworkforce;itisaboutprovidingindustryandbusinesseswiththeskillsneededtotransformonthepathtonet-zero.Importantly,howtheselabormobilitypoliciesaredesignedwillalsosupportmechanismssuchassystemdealsandeducation-sectorreformstoensurelong-termgrowthinemployment.Notallworkers,skills,orregionswillrequirethesamestrategicpolicysolutions.Activetransitionassistancecantargetimprovedeconomic,workforce,andskillingoutcomesbasedona"portfolioapproach"targetedtospecificcohortsintheeconomy.Thiswillbecoretoplace-basedandcohort-basedworkforcepolicydesignfordecarbonization.AportfolioapproachtopolicyfortheGreenCollarworkforceshouldconsiderthefollowingcohorts:•Workersinthewrongplace:Policytargetsworkerswhoarelikelytobedisruptedintheshort-to-mediumterm.Thiscanbeassimpleaspoliciestoimprovetheawarenessofjobvacanciesandthetransferabilityofskillstonewindustries;orpolicythatismoreinterventionalistcanbeadopted,suchasalabormobilitypolicy,whichprovidesfundingtoemployerstohireadisruptedworker;ortrainingpolicythatsubsidizestrainingfordisruptedworkersinprioritycourses.Someofthesepoliciesalreadyexisttodayandwillonlyneedminoradjustmentstotarget“workersinthewrongplace”basedontheimpactsofdecarbonization.Policytargetsdisruptedemissions-Intensiveandclimate-reliantworkerstofacilitatepathwaysintogrowingjobsimmediatelyorthroughupskilling.•Workerswiththewrongskills:Policytargetsworkerswhowillneedtobeupskilledtoremainintheirrolesortotransitiontonewjobs(wherethegoalisjobretentionandskilldevelopment).Thesetypesofpoliciesmayincludetheprovisionof“microcredentials”(discretequalificationsthatdemonstrateskillsandknowledgeinspecificsubjectsorcapabilities)toupskillexistingworkersorprovidefundingtobusinessestodeliveron-the-jobtrainingasskillingneedsaresospecialized.Policyupskillsworkersintransformedjobsandstudentsexpectedtopursueacareerinatransformedrole.•Workerswhoareunderutilized:Policytargetsunderutilizedordisengagedcohortsintheeconomy(suchaswomen,youth,migrants,indigenouspeoples,andpeoplewithdisabilities)todirectthemtoemploymentortrainingthatsupportsinclusionintheGreenCollarworkforce.PolicythatdoesnotdirectlyaddressunderutilizedworkersandtheirinclusionintheGreenCollarworkforcewillsignificantlyhindereconomicgrowthandprosperity.Policyaimstoincreasetheskillsandparticipationofmarginalizedcohortsintheworkforce.Applyingaportfolioapproachtoskillreallocation8687Worktowardnetzero07Endnotes8786Worktowardnetzero8889Worktowardnetzeroi)SonjaKlinskyetal.,“Whyequityisfundamentalinclimatechangepolicyresearch,”GlobalEnvironmentalChange44(May2017):pp.170–3.ii)PradeepPhilip,ClaireIbrahim,andCedricHodges,Theturningpoint:Aglobalsummary,DeloitteEconomicsInstitute,2022.iii)DeloitteEconomicsInstituteestimateusingD.Climate,whichmeasurestheglobalworkforceaspersonsemployedinfull-timeequivalent(FTE)roles.iv)Kraftfahrt-Bundesamt.2022.MonatlicheNeuzulassungen.Data.Kraftfahrt-Bundesamt-MonatlicheNeuzulassungen(kba.de)v)Carwow.de.2022.LieferzeitenfürElektroautoscarwow.de.LieferzeitenfürElektroautoscarwow.devi)GermanAerospaceCenter,IMU,bridgingIT.2019.“StructuralStudy–Transformationthroughelectricmobilityandprospectsofferedbydigitalization”.e-mobilBW.Strukturstudie-Summary_ENG.pdf(e-mobilbw.de)vii)Mercedes-Benz.2022.PressReleaseJuly22,2021.“Mercedes-Benzpreparestogoall-electric”.Mercedes-Benzpreparestogoall-electric-Mercedes-BenzGroupMedia.viii)Deloitte.2022.smartWorkforceTransformationforautomotivesuppliers.AutomotiveSmartWorkforceTransformation(deloitte.com).ix)UNDPNDCSupportProgram,“Philippines,”2018.x)RepublicofthePhilippines,UpdatedPhilippinedevelopmentplan2017–2022.xi)RepublicActNo.10771,PhilippineGreenJobsActof2016,April29,2016.xii)Dr.ReneE.Ofreneo,GreenjobsandgreenskillsinabrownPhilippineeconomy,InternationalLabourOrganization(ILO),2010.xiii)ILO,“Guidelinesforajusttransitiontowardsenvironmentallysustainableeconomiesandsocietiesforall,”2015.xiv)TechnicalEducationandSkillsDevelopmentAuthority,Greenskillsforgreenjobs:PreparingtheFilipinoworkforceforthegreeneconomy,LaborMarketIntelligenceReportissue1,June2018.xv)IntergovernmentalPanelonClimateChange(IPCC),ClimateChange2013:ThePhysicalScienceBasis,ContributionofWorkingGroupItotheFifthAssessmentReportoftheIntergovernmentalPanelonClimateChange(CambridgeUniversityPress,2013).xvi)TheNationalCenterforONETDevelopment,“ONET®greentaskdevelopmentproject,”November2010.1)AsiaPacificincludesChina,Japan,SouthKorea,India,SoutheastAsiaandTaiwan,PacificNations,Australia,andNewZealand.EuropeincludestheUnitedKingdom,France,Germany,Italy,allotherEuropeanUnioncountries,Belarus,Moldova,Russia,Ukraine,Iceland,Norway,Albania,Andorra,BosniaandHerzegovina,Montenegro,NorthMacedonia,SanMarino,Serbia,Liechtenstein,Monaco,andSwitzerland.TheAmericasseriesincludestheUnitedStatesandSouthAmerica.2)196PartieshavejoinedtheParisAgreement,whichrepresentsalmostallcountriesintheworldcommittedtosubstantiallyreducingglobalemissionstolimittheglobaltemperatureincreaseto2°Cinthiscenturywhilepursuingeffortstolimittheincreaseevenfurtherto1.5°C.Notingthereremainsadifferencebetweenjoiningandratifyingtheagreement.3)DeloitteEconomicsInstituteestimateusingD.Climate,whichmeasurestheglobalworkforceaspersonsemployedinfull-timeequivalent(FTE)roles.4)Thetotallevelofglobalemployment,accountingforFTEs,part-time,andcasualworkers,ismuchlarger.5)DeloitteEconomicsInstituteestimateusingD.Climate,whichmeasurestheglobalworkforceaspersonsemployedinfull-timeequivalent(FTE)roles.ThehighlyvulnerableUSregionsincludetheEnergyNorth,EnergySouth,andGreatLakesregions.Afulllistofstatesisprovidedinthetechnicalappendix.6)Thisglobalnet-zeroscenarioandpathwayalignstotheDeloitteEconomicsInstituteanalysisintheTurningpoint(italicise)seriespresentedfortheglobaleconomy,AsiaPacific,theAmericas,andEurope.SeeDeloitte’sTheturningpoint7)RefertothetechnicalappendixfordiscussiononthedefinitionofactivetransitionassistanceanditsapplicationintheD.Climatemodelingpresentedinthissectionofthereport.8)IPCC-adoptedemissionscenariosvarywidely,dependingonsocioeconomicdevelopmentandclimatemitigationpolicysettings.SSP2-6.0ischosenasoneofthemostfrequentlyused“baseline”scenariosintheliterature.Itdescribesanintermediatebaselinescenarioasitcarrieshistoricalsocial,economic,andtechnologicaltrendsforwardandincludesnospecificorsignificantclimatemitigationpolicyeffort,makingitanappropriatebaselineforreference.9)Pre-industrialisdefinedinIPCCassessmentsasthemulti-centuryperiodbeforetheonsetoflarge-scaleindustrialactivityaround1750.10)Theassociatedclimatedata(suchasannualtemperatureincreasesandatmosphericconcentrations)isestimatedusingMAGICCasdescribedinMeinshausenetal.(2011)andMeinshausenetal.(2020)andconfiguredbyNichollsetal.(2021).Seethetechnicalappendixforfurtherdetail.EndnotesFootnotes9091Worktowardnetzero08Technicalappendix9190Worktowardnetzero9293Worktowardnetzero5.Thekeyvariablesoftime,globalaveragetemperatures,andthenatureofeconomicoutputacrossindustrystructurescombinetoofferalternativebaselineviewsofeconomicgrowth.Specificscenarioanalysisisthenconducted,referencingabaselinethatincludesclimatechangedamage.ScenarioscouldalsoincludepolicyactionsthateitherreduceorincreaseemissionsandglobalaveragetemperaturesrelativetothecurrentSSP2-6.0baselineview.6.Therearetwonet-zerotransitionscenariosdevelopedandappliedinreferencetothebaselineinthisreport.ThefirstreflectsasimilarscenariototheTurningpointserieswheretheworldrapidlyacceleratestomitigateclimatechangeandcoordinatestotransitioneconomiesawayfromemissions-intensiveactivityandprocesses.Thisfirstscenariolimitsglobalaveragewarmingtowellbelow2°Cbymid-centuryandaccountsforelementsofanequitabletransitionviatheroleofgovernmentandbusinessestotransitioninanorderlymanner.Thesecondscenariofollowsasimilarnarrativeandglobalaveragewarmingoutcomebutdoesnotincludeanorderly,planned,orequitabletransitionviatheroleofgovernmentsandbusinessestomitigatedisruptionandminimizetransitioncosts.ThismodelingframeworkinvolvessignificantresearchonclimateandeconomicimpactsacrossAsiaPacific,Europe,andtheAmericas,whichareusedasinputsforDeloitte’sD.Climatemodel(refertothetechnicalappendicesforthoseregionalreportsatdeloitte.com/global-turningpoint).Modelingclimatechangeandnet-zerotransitionimpactsToquantifyitsconclusions,theDeloitteEconomicsInstitutemodeledtheeconomicimpactsofachangingclimateonlong-termeconomicgrowthusingthefollowingprocess:1.Themodelprojectseconomicoutput(asmeasuredbyGDP)withemissionsreflectingacombinedSharedSocioeconomicPathway(SSP)-RepresentativeConcentrationPathway(RCP)scenario,SSP2-6.0,totheyear2100.8Thesocioeconomicpathway,SSP2,isthe“middleoftheroad”amongfivebroadnarrativesoffuturesocioeconomicdevelopmentthatareconventionalinclimatechangemodeling.Theclimatescenario,RCP6.0,isanemissionspathwaywithoutsignificantadditionalmitigationefforts(abaselinescenario).xvThisresultsinaprojectedemissions-intensiveglobaleconomy.2.IncreasedatmosphericGHGscauseaverageglobalsurfacetemperaturestocontinuerisingabovepre-industriallevels.9IntheSSP2-6.0baselinescenario,globalaveragetemperaturesincreasemorethan3°Cabovepre-industriallevelsbytheendofthecenturyaccordingtotheModelfortheAssessmentofGreenhouseGasInducedClimateChange(MAGICC).10(Notethatpresent-daytemperatureshavealreadyrisenmorethan1°Cabovepre-industriallevels.)3.Warmingcausestheclimatetochangeandresultsinphysicaldamagetothefactorsofproduction.Deloitte’smodelincludessixtypesofeconomicdamage,regionalizedtotheclimate,industry,andworkforcestructureofeachdefinedgeographyacrossAsiaPacific,Europe,andtheAmericas.Thesedamagescapturethetrendorchronicimpactsofglobalmeansurfacetemperatureincreases.Theapproachdoesnotexplicitlymodelindividualacuteeconomicshocksdrivenbyextremeclimateevents,suchasnaturaldisasters,althoughtheseareimplicitlycapturedinanincreasingtrendofclimatechangedamage.4.Thedamagetothefactorsofproductionisdistributedacrosstheeconomy,impactingGDP.Anychangeinemissions(and,correspondingly,temperatures)overtimeresultsinachangetotheseimpactsandtheirinteractions.Theeconomyimpactstheclimate,andtheclimateimpactstheeconomy.9495WorktowardnetzeroTableA.1:SectorsintheJobVulnerabilityIndexthatareexposedtophysicalclimatedamageandnet-zerotransitionriskLabelGTAPindustryAgriculture•Rice•Wheat•Othergrains•Vegetablesandfruit•Oilseeds•Sugarcrops•Fibrescrops•Othercrops•Cattle•Otheranimalproduct•Rawmilk•Wool•FishingConventionalenergyandmining•Coal•Oil•Gas•ElectricitygenerationfromfossilfuelsHeavyindustryandmanufacturing•Petroleumandcokemanufacturing•Chemicalmanufacturing•Mineralmanufacturing•Metalmanufacturing•Technologymanufacturing(e.g.,machineryandequipment)•Transportmanufacturing•OthermanufacturingTransport•Landtransport•Watertransport•AirtransportConstruction•ConstructionSource:DeloitteEconomicsInstitute;GTAPTheglobalworkforcevulnerabilityindexwasinformedfromemploymentcompositiondatafromtheD.Climatemodelandinformedbyvariousstatisticiansofficesfromrelevantcountries.Theemploymentcompositiondatareflectsthefull-timeequivalentworkerswhoareemployedinanindustry.ConsistentindustrieswereusedacrossregionsusingtheGlobalTradeAnalysisProject(GTAP)classification.Theincludedindustriescaptureallglobaleconomicactivity.Theindustriesidentifiedasmost“vulnerable”toextremetemperaturesandeconomictransitionimpactswereselectedfortheIndexbasedonanassessmentonhowincreasedtemperaturesandacarbonpriceimpactlabormarketdynamics.ThiswasinformedbyresearchandassumptionsintheD.ClimatemodelundertakenintheTurningpointseries.Theindustriesidentifiedasmost“vulnerable”tophysicalclimatedamageandnet-zerotransitionriskarepresentedinTableA.1.JobVulnerabilityIndex94Worktowardnetzero9697WorktowardnetzeroCountryModeledregionMalawiCentralSouthAfricaMauritiusCentralSouthAfricaMozambiqueCentralSouthAfricaRwandaCentralSouthAfricaTanzaniaCentralSouthAfricaUgandaCentralSouthAfricaZambiaCentralSouthAfricaZimbabweCentralSouthAfricaBotswanaCentralSouthAfricaNamibiaCentralSouthAfricaRestofSouthAfricanCustomsUnionCentralSouthAfricaEthiopiaEastAfricaKenyaEastAfricaMadagascarEastAfricaRestofEasternAfricaEastAfricaIndiaIndiaKazakhstanRestofAsiaKyrgyzstanRestofAsiaAregion’svulnerabilityrankingwasdeterminedbycalculatingtheproportionofemploymentthatsitsintheindustrieslistedinTableA.1.Regionalworkforceswithahighvulnerabilitytoclimateextremesandeconomictransitionimpactsweredefinedashavingmorethan40%ofemploymentin“vulnerable”Theseproportionswereestimatedtorangebetween20%and50%inregionalworkforces.industries.AlistofcountriescapturedinthesemodeledregionsispresentedinTableA.2.TableA.2:RegionalworkforceswithahighvulnerabilityCountryModeledregionChinaChinaHongKongChinaBeninCentralSouthAfricaCameroonCentralSouthAfricaCentralAfricaCentralSouthAfricaSouthCentralAfricaCentralSouthAfricaJobVulnerabilityIndexIncreasingvulnerability9899WorktowardnetzeroStateModeledregionAlaskaEnergyNorthColoradoEnergyNorthIdahoEnergyNorthMontanaEnergyNorthNorthDakotaEnergyNorthUtahEnergyNorthWestVirginiaEnergyNorthWyomingEnergyNorthLouisianaEnergySouthNewMexicoEnergySouthOklahomaEnergySouthTexasEnergySouthIllinoisGreatLakesIndianaGreatLakesMichiganGreatLakesOhioGreatLakesWisconsinGreatLakesTableA.4:USworkforceswithahighvulnerabilityCountryModeledregionTajikistanRestofAsiaRestofWesternAsiaRestofAsiaBurkinaFasoWestAfricaCoted'IvoireWestAfricaGhanaWestAfricaGuineaWestAfricaNigeriaWestAfricaSenegalWestAfricaTogoWestAfricaRestofWesternAfricaWestAfricaSouthAfricaWestAfricaCountryModeledregionAlgeriaGabonAngolaGambiaBurundiGuinea-BissauCaboVerdeLesothoCentralAfricanRepublicLiberiaChadLibyaTheUSregionwiththehighestproportionofworkersin“vulnerable”industrieswastheEnergySouthat32%.Thedefinitionof“highly”vulnerablewasadjustedwhenlookingattheregionalUSview.Assuch,regionalworkforceswithahighvulnerabilitytoclimateextremesandeconomictransitionimpactsweredefinedashavingmorethan25%ofemploymentin“vulnerable”industries.AlistofstatescapturedinthesemodeledregionsispresentedinTableA.4.WhereindustryemploymentdatagapswerepresentintheGTAPdatabaseforparticularcountries,aglobalaverageindexscoreof2wasused.DatagapsexistedinGreenland,IcelandandtheCaribbeanandPacificIslands.TherewerealsoindustryemploymentdatagapsforlargepartsofAfrica(SeeTableA.3).JobvulnerabilityformissingAfricancountrieswasassumedastheaverageofthemodelledAfricanregionwheredataisavailable,Indexscoreof3.7.TableA.3:IndustryemploymentdatagapsinAfricaCongoMaliCongoDRCMauritaniaCôted’IvoireNigerDjiboutiSierraLeoneEquatorialGuineaSouthSudanEritreaSudanEswatini100101Worktowardnetzero101IntheD.Climatemodel,activetransitionassistancereflectsaviewofgovernmentrevenues,collectedviaashadowemissionpricemechanism,beingredistributedtorepresentpolicyactionsthatbothdelivertheemissionsabatementandoffsetthecostsoftheabatement.ThisconceptisappliedinD.Climatetoestablishabetterrepresentationofeconomicimpacts(costs)ofthestructuraladjustmentpathwayeconomieswillundergoastheydecarbonizetonet-zeroemissions.D.Climateimposesashadowpriceonemissionstodelivertheemissionreductionsinlinewiththeemissionsconstrainttonet-zeroemissionsbymid-century.InD.Climate,theshadowpriceisnotthesameasalegislatedemissionstax,oratradedemissionsprice,butitisanalogousinthatitrepresentstheprojected“economicprice”atwhichagivenreductioninemissionscanbeachieved.TheDeloitteEconomicsInstituteviewstheshadowpricemechanismtorepresentthevariousmixofactions,policies,investments,incentives,regulations,orpenaltiesanygovernmentmayimposetomeetitsstatedemissionstarget—andtheimpliedeconomiccostoftheseactions.Butdespiteitnotbeinganexplicitmarket-basedmechanismimposedbygovernment,thereisarevenuestreamcollectedbygovernmentasrequiredbythemodeltosolve.Thatis,wherethereisapriceimposed,itcreatesarevenuestreamagovernmentmustcollect.TransitionassistanceisamechanismdesignedtobeimposedintheD.Climatemodeltoboth:•Offeraviewtothegovernmentpolicies,actions,andinvestmentsthatdeliverabatementthatdrivestheemissionprice(beyondtheconstraint);and•Betterreflectthestructuraladjustmentcostsinindustriesandregionsasdecarbonizationacceleratesbyoffsettingthem.Thatis,assuminggovernmentpoliciesthatdeliverthetransitionwilleitheraccountforaredistributionoftransitioncostsinimplementationorthosetransitioncostswillbeoffsetelsewherebyothermeasurestosecureeconomicgrowthandjobcreation.Employmentimpactsof‘activetransitionassistance’Transitionassistanceisimplementedasa“shock”totheD.Climatemodel.A“shock”referstoanimposedchangeinthemodelviaalternativeassumptionsbeyondwhatthemodelwouldautomatically(endogenously)solvefor.Inthisway,theshockrepresentsaspecificvariablechange,usuallytocreateadifferenceinscenariooutcomesandeconomicimpactsinalignmentwithascenarioframingornarrative.Transitionassistance—ortherevenuedistribution—istypicallyresearched,designed,andappliedtoindustriesthatareneitheremissions-intensivenorinhighdemandasaneconomydecarbonizes.Thismeansgovernmenteffortdoesnotdisproportionallygotowardemissions-intensiveconventionalenergyoremergingcleanenergy,asbothprimarilyrespondtopriceandchangingdemand—andadditionaltechnologicalproductivityparametersimposedinthemodeltoreflecttheassumedchangingenergyandtechnologymix.Forexample,inanemissions-intensiveregion,transitionassistanceistargetedtodiversifyeconomicactivityintoareassuchasconstruction,private-sectorserviceindustries,retail,andpublicservices.Thissmoothsthestructuraldisruptiontoeconomiesandtheirworkforces,resultinginincreasedjobcreationearlierinthephasesofdecarbonization.Governmentinvestmentsareimplementedthrougheffectivetaxreductionsand/orsubsidiesoncapitalandlaborwithintargetedindustriesandareconstrainedatthenationallevelbygovernmentrevenuethatiscollectedduringtransition.Investmentsaredistributedacrossregionsaccordingtotherelativecostsincurredthroughtransition.Absenttransitionassistance,modelingresultsnarrowlydemonstratetheeconomicimpactsoftheshadowpriceasa“blunter”instrumentandtheimpactsofachangingenergyandtechnologymix.Resultsalsoinherentlyassumethereisnodefinedroleforgovernmentinfacilitating,coordinating,anddeliveringthetransitionoutcomesoftheeconomy.Whereassumed,suchresultsarenotafittingrepresentationoftheproposedpolicymixandeconomicobjectivesofmanycurrentgovernmentsgloballyinrelationtonet-zerotargets.Thatis,jurisdictionshavecommittedtodeliveringpolicymixes(regulation,investments,incentives,penalties,etc.)thatdeliverstatedabatementtargets.Withitsinclusion,transitionassistancebothreducestheaggregateeconomiccostsoftransitionovertimetonet-zeroandchangesthecost-benefitprofileatcertainpointsintime.Thatis,theoverallcostoftransitionislowerintermsofeconomicgrowthandjobdisruption,andthepointatwhichthe“dividend”oftransitionoccursisearlier.102103WorktowardnetzeroSeparatecategorieswerealsoaddedforoccupationsthatwereexpectedtobedisruptedbythestructuralemploymentshiftsofanet-zerotransition(occupation-andsector-basedimpacts)andtheoccupationsthatrelyheavilyontheclimateforproduction(occupation-andsector-basedimpacts).ThiscategorizationisbasedontheDeloitteEconomicsInstitute’slabormarketanalysisandseveralstudiesusingD.Climateandotheroccupationalforecastingmethodologies.Althoughitisexpectedthatalloccupationswillbeaffectedinsomeway—eitherthroughtheimpactsoflocked-inwarmingorthetransition—theoccupationsdiscussedtheoreticallyintheemissions-intensiveandclimate-reliantcategoriesarethosethatarehighlyvulnerabletothestructuralemploymentshiftsthatwillresultfromwarmingandtransitionimpacts.Itisexpectedthatduetothenatureofimpactsinthesecategories,theproportionofemissions-intensiveandclimate-reliantjobsinaneconomyissomewhatreflectedinaregion’sJobVulnerabilityIndexscore.Indevelopingthegreencategories,ONETinvestigatedtheimpactofgreeneconomyactivitiesandtechnologiesonoccupationalrequirementsandthedevelopmentofnewandemergingoccupations.Itfoundthatthetransitiontonet-zerowilllikelyresultinchangestoworkandworkerrequirementsandthegenerationofuniqueworkandworkerrequirementsforgreenenhancedskillsandgreennewandemergingoccupations.Asaresultoftheresearch,atotalof1,369greentaskswereincludedintheONETGreenTaskFile.TheGreenTaskFileincludestheentiretasklistsforeachofthe138occupationsthatfitintogreenenhancedskillsandgreennewandemergingoccupationcategories,whichincludedbothgreenandnon-greentasks.xviTheDeloitteEconomicsInstituteleveragedthisdatabase,andourmodelingofthetimingofglobaloccupationimpactsinthetransitiontonet-zero,toestimatetheproportionofexistingskillsthatcanbeleveragedinthecurrentworkforcetofacilitatethetransitiontonet-zeroby2050.•Greenincreaseddemand–Theimpactofgreeneconomyactivitiesandtechnologiesisanincreaseintheemploymentdemandforanexistingoccupation.However,thisimpactdoesnotentailsignificantchangesintheworkandworkerrequirementsoftheoccupation.Theworkcontextmaychange,butthetasksthemselvesdonot.•Greenenhancedskills–TheimpactofgreeneconomyactivitiesandtechnologiesresultsinasignificantchangetotheworkandworkerrequirementsofanexistingONET-StandardOccupationalClassificationoccupation.Thisimpactmayormaynotresultinanincreaseinemploymentdemandfortheoccupation.Theessentialpurposesoftheoccupationremainthesame,buttasks,skills,knowledge,andexternalelements,suchascredentials,havebeenaltered.•Greennewandemerging–Theimpactofgreeneconomyactivitiesandtechnologiesissufficienttocreatetheneedforuniqueworkandworkerrequirements,whichresultsinthegenerationofanewoccupationrelativetotheONETtaxonomy.Thisnewoccupationcouldbeentirelynovelor“born”fromanexistingoccupation.ONET:Definitionsof‘green’jobs102Therearenouniversaldefinitionsforoccupationsthatwillbeimpactedbyclimatechangeanddecarbonization.Forthisresearch,theDeloitteEconomicsInstituteusedGreenCollarworkforceoccupationdefinitionstheONETdevelopedgreenworkforcecategoriesasastartingpoint,refiningtheoccupationswithinthesecategoriestoaglobalcontext.Source:ONETResourceCenter,OccupationalListings:GreenNewandEmergingOccupationsWorktowardnetzero104105WorktowardnetzeroEmilyHaywardManager,DeloitteAustraliaDeloitteEconomicsInstituteehayward@deloitte.com.auAuthorsDr.PradeepPhilipPartner,DeloitteAustraliaDeloitteEconomicsInstitutepphilip@deloitte.com.auClaireIbrahimPartner,DeloitteAustraliaDeloitteEconomicsInstitutecibrahim@deloitte.com.au106107WorktowardnetzeroGlobalcontactsAcknowledgementsJenniferSteinmannGlobalSustainability&ClimatePracticeLeaderjsteinmann@deloitte.comDavidBarnesGlobalRegulatory&PublicPolicyLeaderdjbarnes@deloitte.co.ukSteveHatfieldGlobalFutureofWorkLeadersthatfield@deloitte.comCedricHodgesSamuelCollinsNicholasO’HaraMaiNguyenKyraKaszynskiTessBoyerAspecialthankstothefollowingindividualswhoprovidedthesupporttomakethisreportpossible:RachaelBallardStuartKerrBlytheAronowitzElizabethPayesKarenCunninghamCrystalUpperman-ChristinaBrodzikDerekPankratzKateHardinBevinArnasonDeloitteEconomicsInstituteThepaceandscaleofglobaleconomic,social,environmental,anddigitaldisruptionisrapid,andweallnowoperateinaworldwenolongerreadilyrecognize.Thiscreatesaneedtounderstandhowstructuraleconomicchangewillcontinuetoimpacteconomiesandthebusinessesinthem,andthelivelihoodsofourcitizens.Inpursuitofeconomicprosperity,progressiveorganizationsneedfuture-focused,trustedadvisorstohelpthemnavigatecomplexityanddeliverpositiveimpact.TheDeloitteEconomicsInstitute(the“Institute”)combinesforesightwithsophisticatedanalysistoshapeandunlockeconomic,environmental,financial,andsocialvalue.Connectingleadingglobalinsightandlocalknowledgewithanindependentperspective,theInstituteilluminatesfutureopportunitiesanddrivesprogress.TheInstitute’seconomicrigorcomesfromitscutting-edgeanalytictools;experienceworkingwithbusinessesandgovernments;andtheexpertiseofDeloittefirmpractitionerswhohelpshapepublicpolicy,deliverbusinessinsights,andinforminvestmentstrategy.TheInstitutesharespracticalpolicy,industryknow-how,andevidencebasedinsightstohelpbusinessesandgovernmentstacklethemostcomplexeconomic,financial,andsocialchallenges.Withover500economistspracticinginDeloittefirmsacrossAsiaPacific,theAmericas,andEurope,theInstitute’sdepthandbreadthofexperienceismatchedbyastrongunderstandingoftrendsinglobaleconomiesandtheireffectonbusiness.ItsdedicatedteamofeconomistsworkscloselywiththeDeloittenetwork’sindustryleadersacrosstheglobetoapplyeconomicthinkingandcommercialacumentoeverydaybusinessproblems.TheInstitutepridesitselfonrigorousqualitativeandquantitativeanalysis,andissupportedbyproprietaryandspecialistmodelsrefinedovermanyyears.Ourhighlyqualifiedeconomistsandpractitionershaveastrongreputationforobjectivityandintegrity.AllclientservicesofferedbytheDeloitteEconomicsInstituteareperformedbypractitionersatDeloittefirms.FormoreinformationontheDeloitteEconomicsInstitute,pleasevisitourwebsite:www.deloitte.com/deloitte-economics-institute108WorktowardnetzeroDeloittereferstooneormoreofDeloitteToucheTohmatsuLimited(“DTTL”),itsglobalnetworkofmemberfirms,andtheirrelatedentities(collectively,the“Deloitteorganization”).DTTL(alsoreferredtoas“DeloitteGlobal”)andeachofitsmemberfirmsandrelatedentitiesarelegallyseparateandindependententities,whichcannotobligateorbindeachotherinrespectofthirdparties.DTTLandeachDTTLmemberfirmandrelatedentityisliableonlyforitsownactsandomissions,andnotthoseofeachother.DTTLdoesnotprovideservicestoclients.Pleaseseewww.deloitte.com/abouttolearnmore.Thiscommunicationcontainsgeneralinformationonly,andnoneofDTTLortheDeloitteorganizationisbymeansofthiscommunication,renderingprofessionaladviceorservices.Beforemakinganydecisionortakinganyactionthatmayaffectyourfinancesoryourbusiness,youshouldconsultaqualifiedprofessionaladviser.Norepresentations,warrantiesorundertakings(expressorimplied)aregivenastotheaccuracyorcompletenessoftheinformationinthiscommunication,andnoneofDTTL,itsmemberfirms,relatedentities,employeesoragentsshallbeliableorresponsibleforanylossordamagewhatsoeverarisingdirectlyorindirectlyinconnectionwithanypersonrelyingonthiscommunication.DTTLandeachofitsmemberfirms,andtheirrelatedentities,arelegallyseparateandindependententities.©2022.Forinformation,contactDeloitteGlobal.

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