1. Overview: Guidelines to assess and anticipate skills for the green transition
Policy makers can foster a greening of the economy by avoiding bottlenecks in skill supply and by facilitating job transitions. To do so, they require up-to-date and reliable evidence on changing skill demands related to the green transition. These guidelines provide actionable steps for decision makers to set up approaches for assessing and anticipating skills, and then using the insights generated for policy making that promotes the green transition.
The need to act on climate change is pressing. A reduction of greenhouse gas emissions globally is required to reach carbon neutrality and prevent the steady rise of global average temperatures. Public policies that aim to foster the transition to a cleaner economy and reduce the adverse human impact on the climate and ecosystems are critical to drive the green transition and the pathway to a net-zero economy. At the same time, as individual consumer demands are changing and businesses are taking action to lower their emissions, the green transition will have profound economic and social implications. Job losses are likely to occur in high-emission and polluting sectors, while new jobs will be created in cleaner industries. The green transition will also bring about potentially large changes in the demand for skills. Skills gaps and shortages are already recognised as bottlenecks in green sectors, constraining innovation and technology adoption (Keese and Marcolin, 2023[1]). In this context, governments can take action to promote the development of skills for which the demand is rising due to the green transition, to prepare adult learning and training systems, and to facilitate job transitions.
Research and policy initiatives focusing on skills for the green transition have been undertaken since the 2010s and have received increasing attention in recent years. The policy agenda is relatively novel and comes with significant uncertainty about the effects of green growth on skill needs. The green transformation itself is a complex and evolving process, with technologies and policies continually advancing and changing. The pace of adoption of “green technologies” across sectors and their impact on skills requirements remains therefore difficult to quantify. Many changes in skills demand may be localised and depend on existing economic structures of a region or country.
While the urgency of climate change requires swift policy responses, solid evidence on changes in skill demands due the green transition is still relatively scarce, and so is policy action in OECD countries. Research in this field still suffers from a lack of commonly agreed definitions on what green skills, tasks and jobs actually are. And while there is a range of studies available on how the green transition will affect skills (OECD, 2023[2]; Vona et al., 2018[3]; Kwauk and Casey, 2022[4]) they tend not to be complementary and apply different methods. Policy activity in the area of green skills is often initiated on the ground and is driven, for instance, by forward-looking adult education institutions. At a national level, efforts are often not systematic. Continuously improving and updating the research to generate better evidence will be crucial to make sure that the right skills for the green transition are available where and when they are needed.
In contrast to the adoption of digital technology and the globalisation of supply chains, which are mostly led by the private sector, many changes related to the green transition are driven by public policy. Governments are key actors in setting long-term objectives and making sure they are complied with. Across the OECD, policy makers will have to ramp up efforts to anticipate and prepare for the changes in the labour market brought about by their environmental policies. They are facing the task of taking a proactive and collaborative approach to generate information on skills needs, which can be used to design evidence-based policies.
In addition to the central role of government, all actors in the skills ecosystem need to take action towards a common goal of facilitating skills development for the green transition. Firms, for instance, can assess changes on their own skills and training needs, and invest in the corresponding training programmes. Adult learning providers play a vital role in offering suitable and targeted training that equips individuals with the right set of skills to support the green transition across sectors. Regional public authorities are well-placed to identify local skills needs, mobilise stakeholder networks, or fund pilot projects on green skills training. Importantly, collaboration and co-ordination between the government, social partners, and education and training providers is crucial to develop the skills needed for a more sustainable future.
To ensure that workers are equipped with the right skills, policy must be based on solid assessments of skills needs and build on strong links between education and training institutions and firms. The goal of these guidelines is to provide actionable insights for policy makers on how to develop an evidence-base on skills for the green transition and take action to foster these skills.
There is no standard approach to measuring skill needs for the green transition. However, when undertaking an SAA exercise, most decision makers are following the steps outlined in Figure 1.1. The first step is a mapping of available information and the definition of objectives, such as phasing out of emission intensive sectors or emission-based targets. In a second phase, the skills analysis as such is executed to create new, complementary evidence, ideally with a well-defined scope and with the involvement of stakeholders. Lastly, the results generated by the analysis are used in policy making and feed into dialogue with stakeholders and social partners. These steps are developed in the following sections.
One key finding of this publication is the lack of shared international definitions of green skills, tasks and jobs. Rather than focusing only on a relatively small sample of jobs that are in the green economy, the view emerging from desk research and the workshops organised in the context of this report is that policies should focus more broadly on tasks and skills required across different job families as a result of the green transition, and on the consequent imperative to upskill and reskill all adults affected, directly or indirectly, by these changes.
Another important message emerging from the research carried out for this report is that whole-of-economy approaches using mixed methods deliver a good compromise between scalability and actionable insights.
Source: Authors’ elaboration.
Phase 1 – Planning
The design of an SAA exercise starts with mapping the existing evidence and deciding on key objectives and terminology. Many crucial decisions are made before the analysis is conducted, so it is important for policy makers and researchers to devote sufficient time to embedding their analysis into the existing landscape of information on skills for the green transition, and how the definitions and policy targets will impact the applicability of its findings.
Map information on skills needs for the green transition
Skills assessment and anticipation exercises are initiated because there is a lack of information on a specific skills or labour issue. As policy making for the green transition is increasingly focusing on skills implications, more and more green SAA exercises are being executed – both by the private and public sector. This contributes to the knowledge creation on skills for the green transition. As the knowledge base expands continuously, researchers can support their SAA exercises by leveraging information already generated. A mapping of existing approaches to assessing and anticipating skills can: 1) provide an overview of the type of skills that have been analysed (e.g. technical skills versus transversal skills), the sectors covered (e.g. industry or whole of economy) and the policy areas that have been explored (e.g. training, migration, employment etc.); 2) shed light on which benchmarks, policy targets and definitions researchers are using when investigating the green transition; and 3) identify relevant stakeholders.
Getting an overview of SAA exercises conducted in the country can be challenging. Few countries have a full mapping of ongoing assessments. This is partly due to the large number of organisations producing skills intelligence, and lack of co-ordination in the field. Several countries have taken action to minimise the information asymmetry. In France, the newly formed General Secretariat for Ecological Planning (Sécrétariat général de la planification écologique, SGPE), under the authority of the Prime Minister, will co-ordinate policy planning related to the green transition across government ministries. The Secretariat will build on the mapping of the SAA exercises previously done by the National Observatory of Jobs and Occupations in the Green Economy and will be charged with continuously keeping the list up to date. In Norway, the Committee on Skills Needs has compiled an extensive overview of existing SAA exercises that will contribute to a publicly available evidence base on the green transition. Jobs and Skills Australia are maintaining a public Resource Library under the umbrella of the Clean Energy Capacity Study, which compiles existing research and analysis on the green transition and will be updated throughout the course of the study.
Adopt a common target for skills for the green transition
A plethora of definitions of skills for the green transition and sustainability targets (such as Fit for 55, circular economy, net zero economy etc.) are used internationally. While there is an increase attention paid to labour market policies for the green transition, the field suffers from convoluted definitions and vague objectives, particularly when carrying out skills analysis. The challenge is twofold: on the one hand, researchers and policy makers are struggling with pinning down a definition of skills for the green transition (are they technical skills, knowledge of sustainability, or soft skills?); and, in parallel, definitions tend to vary depending on what the SAA exercise sets as its green target (emission targets, sustainable extraction of raw materials, circularity/recycling of resources, green technology etc.).
Researchers and policy makers point to insufficient guidance from international bodies on green targets and definitions as a challenge when designing and implementing an SAA exercise. Nonetheless, SAA exercises for the green transition can be grouped along some common characteristics.
SAA exercises featuring quantitative analysis often analyse the labour market impact of several green scenarios, to obtain insights on what scenario might be preferable from the policy maker’s perspective.
A large number of SAA exercises focus on industries or sectors rather than the whole economy, because defining key terms and targets for a narrow industry is often more straightforward. An industry that consumes a lot of energy and therefore needs to become more energy efficient is a simpler concept to pin down compared to the complex and diverse interventions that would be needed to promote sustainability in the whole economy. In addition, there is less diversity in occupations (and skill needs) in one industry compared to the whole economy, making it easier to identify key jobs and skills that need to be targeted.
As the results of approaches to SAA are increasingly being used as an input into policy making, stakeholders in some OECD countries are starting to converge to common targets (often emission-based targets) and definitions at the national level. For example, in Australia, current research is focusing on the ‘clean energy transition’ in line with the policy priorities of the federal government, while in Austria, several SAA exercises are organised under the Just Transition Plan and have some common targets and definitions. Depending on targets and definitions selected, SAA exercises may focus on industries, occupations or skills as the main unit of analysis.
Phase 2 – Implementing
Policy makers and researchers have to ensure that the SAA exercise is carried out in a manner that produces results which are useful for policy making. Increasing the relevance of the exercise requires careful consideration of both the scope of the analysis and the stakeholders involved.
Use a well-defined scope and sound methodology
What constitutes a “sound” methodology for skills analysis will depend on different factors such as the purpose of the analysis, availability of data, funding and resources, and governance models. However, there are some characteristics that, combined, strengthen the analysis and more useful produce results for policy planning.
The most influential SAA exercises are those designed specifically to focus on the green transition. Often, the green element features as a small part of a broader skill analysis, but this yields too little information on the labour market impact of the green transition to result in any substantial policy change. SAA focused only on the green transition is preferable although it misses out on the potential interactions between the green transition and other drivers of labour market change, such as digitalisation.
Existing ‘green’ SAA exercises can be divided roughly into two main types: broad analyses intended to create a knowledge base on the topic, and narrow analyses intended to be used for targeted policy making. Both types serve an important role: the broader analyses are often the first generation of studies that kickstart policy thinking around sustainability and the labour market, while targeted studies can provide more disaggregated data to be used in concrete policy planning. Often, what is observed is that policy makers or research institutions will commission wider, whole-of-economy studies that provide an overview of the state of the labour market and the green transition and identify key areas of the economy that can benefit from a more targeted study. Then, a second SAA exercise is carried out, where the scope is tailored to a specific policy objective and can provide more disaggregate and granular information on the skill needs resulting from a specific policy initiative in the context of the green transition.
Of the SAA exercises reviewed, those that used mixed methods were more likely to influence policy. On the one hand, quantitative data allows for the measurement of emerging skill needs by comparing skills across occupations, enabling policy makers to allocate resources for green skills and to regularly update SAA exercises so as to identify trends in green sectors. Quantitative approaches are also easier to scale, as the same methodology can potentially be applied across sectors, regions and even countries. On the other hand, qualitative data gathering promotes co-operation and support from key institutions and stakeholders, which is crucial during implementation. Qualitative approaches to SAA also take a more holistic approach and allow discussing concepts that are more difficult to quantify, notably they allow for a discussion that is directly focused on skills as opposed to estimating needs in terms of occupations or qualifications. By combining quantitative and qualitative approaches, SAA exercises can have a stronger impact on policy making, stakeholder co-ordination, resource allocation, and efficient service delivery for green transition initiatives.
Skills assessments and anticipation should be ongoing and regularly updated to capture changes in skill needs and the progress of the green transition. This ensures that policies remain relevant and aligned with current demands and challenges. Moreover, validating findings is a necessary step in producing high-quality SAA. Good practices include discussing the findings with external experts during workshops, focus groups or other expert meetings, to ensure that the results, and the assumptions they are based on, are considered plausible before they are published.
Ensure stakeholder involvement in the execution of the SAA exercise
Ensuring stakeholder engagement when carrying out skills assessment and anticipation exercises is crucial for every policy phase, but particularly during the implementation of SAA exercises. While involving stakeholders during the planning phase is a well-established practice and brings together different types of decision makers to find common solutions, it is often not sufficient to convince stakeholders of the validity of the findings. Stakeholders might not be aware of, or not agree with the methodology used in the particular approach to SAA and thus hesitant to use the results. They are also in a good position to contribute to SAA exercises with crucial information and data. As a result, it is key to involve stakeholders even when carrying out SAA.
There are several steps both policy makers and institutions commissioning SAA exercises can undertake to promote stakeholder engagement. Stakeholders can be involved throughout the analysis and validate results to confirm findings and steer the SAA exercise in a useful direction. Stakeholders can serve as industry experts for technical interviews, or test results within their organisations. In Norway, the Commission on Skills Needs assembled a research group comprising representatives of the government, employers’ organisations, trade unions, and researchers in various fields that together carried out a SAA exercise for the green transition. The report included a wide range of topics and used many different types of data, enabled by the involvement of a variety of stakeholders. Institutions can also create multi-stakeholder platforms or task forces comprised of representatives from various stakeholder groups, for instance government officials, employer and employee groups, education and training institutions, industry associations, trade unions, and civil society organisations. These platforms provide a forum for dialogue, collaboration, and decision-making on SAA exercises for the green transition, as well as ensuring that each stakeholder understands the skills intelligence produced to better tailor their services and aid all the key actors in the green transition. In Sweden, the Talent 25 000 Council (T25) is a platform comprising industry representatives from the biggest employers in the battery and steel industry in the region, a technical university, and a recruitment and relocation company. The Swedish Public Employment Service (PES) co-operates with T25 and other stakeholders (employers, regions, and municipalities), and as a result has one of the most diverse range of policies and initiatives to tackle the employment needs of the region. Their success is in large part related to the diversity of actors that collaborate to increase employment and skills for the green transition.
Phase 3 – Applying
Once countries have generated evidence on skills changes linked to the green transition, this evidence should feed into stakeholder dialogue and feed into the design and update of policies on skills. Many actors, within and outside government, stand to benefit from the output of SAA exercises.
Using SAA results in policy making
In terms of areas of use, results of SAA exercises on skills for the green transition can potentially inform policy in a range of different areas, including adult training, formal education, career guidance, employment policies, industrial policies and migration policies. Nowadays, general SAA information is already used in these fields, for example, to design training incentives for workers, improve career guidance services, or update occupational standards. In the future, evidence on skills for the green transition can be used more strategically to prepare for expected changes in these areas.
While national-level policies stand to benefit from up-to-date information on skill needs, policy making on skills for the green transition has an important local element, also due to the unequal impact of the green transition across regions. Regional and local actors are well placed to act in a very targeted way to facilitate the green transition. In the area of skills, it is thus crucial that they have access to information on changing skill demand and supply, and that this information is sufficiently disaggregated. Local governments and public authorities, vocational training providers and educational institutions, businesses and community organisations are therefore essential to translate the findings of SAA exercises into concrete application and facilitate the right skills supply for more sustainable local economies.
Ensuring that SAA results are well known to all relevant actors can be achieved by making reports publicly available, sharing their results through online platforms or feeding them into existing labour market information systems to reach decision makers, employment or education professionals, and individuals themselves. The dissemination of SAA results to a wider public is well established in Finland, for example, where the PES runs a web-based system called ForeAmmatti. It provides comprehensive and up-to-date labour market information system that can be used by anyone to better understand regional labour markets, available training, competences required for different jobs, and labour market forecasts.
Ensure stakeholder dialogue
Stakeholder involvement is important for conducting an SAA exercise. It matters even more when putting its findings into practice. SAA provides a common language and shared concepts to address potential skills gaps and may also help to identify policy priorities at a national, regional or local level. Evidence generated through SAA exercises can be most impactful if it feeds into a dialogue with all actors in the skills ecosystem, including government agencies, businesses, training institutions, or civil society organisations. Social dialogue and stakeholder engagement, which in some countries already has a long tradition, helps to align efforts and foster collaboration when implementing evidence-based policies. It may also ensure that relevant initiatives are identified, supported, and well-co-ordinated across different sectors and organisations.
Ongoing exchanges with stakeholders provide an opportunity to understand different perspectives, and to identify potential for action. Stakeholders bring unique insights and experiences to the table, which can help to design tailored solutions on the basis of a common evidence basis. By incorporating the results of SAA exercises, stakeholders can collectively develop comprehensive strategies that unlock the skills potential needed for a greener economy. Actively taking part in a collective effort will foster trust and ownership among actors in the skills ecosystem. This ownership may translate into greater acceptance, commitment, and impact of policy action. For example, the PES in Sweden is relying on information from a SAA exercise that assesses the skills impact of a large expansion of sustainable energy companies in the north of the country. On the basis of the evidence that is widely disseminated, the PES co-operates with VET institutions, private firms, local and regional government institutions.
All of the countries covered in this report have taken steps to measure how skill needs linked to the green transition are changing. They face similar challenges such as a lack of support, co-ordination and political will, although these challenges have been manifested in different ways. Some countries, such as Australia and France, have more experience conducting skills assessment and anticipation but have not yet seen all results translated into policy response. Others, such as Norway and Sweden, have only recently embarked on exploring skills-related topics for the green transition, but have not yet pushed the policy issue forward enough to see large changes. Austria, which is in the very beginning stage of green-related policy making, can learn much from the experience of its peers in setting up a system for assessing and anticipating skills for the green transition. The following boxes provide an overview of the specificities of each country’s SAA exercises along with some priorities for further development.
Australia has taken several steps in establishing a system for assessing and anticipating skills for the green transition. The push for evidence-based skills policies is supported by the federal government’s commitment to reach net-zero by 2050, and the Powering Australia plan which focuses on creating jobs, cutting power bills and reducing emissions by boosting renewable energy. This has sparked public debate, and initiatives to measure labour market changes can be found at both federal and state levels. The most notable exercise, the Clean Energy Capacity Study conducted by Jobs and Skills Australia, is starting to influence policy making. In addition, Jobs and Skills Australia has well-established collaboration with other institutions and existing pathways to use skills-level data in policy making which can be leveraged also when focusing on the green transition. However, translating information on skills changes related to the green transition into policies is still at an early stage in Australia.
Australia could do more to bring employers onboard in planning for the green transition. Though there are a few SAA exercises conducted by private companies and industry-bodies, these have not translated into action. Involving employers in large-scale SAA exercises through tripartite networks would strengthen the work on the green transition not only by pooling together knowledge from all the parts of the labour market, but also by bringing onboard different stakeholders and directly communicating with groups that will have to implement and adjust to the new policies.
Australia should analyse existing evidence to get an overview of what is known on changing skill demands linked to the green transition. Australia has the most SAA exercises of the countries featured in the report, and Jobs and Skills Australia has created a resource library of existing SAA exercises for the green transition. The next step should be to analyse this wealth of information to identify useful information for policy making and key gaps in knowledge on skills for the green transition.
Compared to the other countries reviewed in this report, Austria has fewer approaches to assess and anticipate skills for the green transition. The implementation of existing SAA exercises has mostly been outsourced to external research centres. While the information generated was validated and discussed in the context of the Just Transition Action Plan in Austria, there seems to be a lack of established mechanisms to feed evidence on green skills back into policy making. At the time of writing, the use of the existing evidence for adult training, career guidance, or employment policies was rare. In two out of three SAA exercises examined for this review, the focus of analysis was industries rather than skills, with a particular focus on renewable energy sectors. A few innovative policy initiatives on fostering skills for the green transition have been started, such as the Environment Foundation (Umweltstiftung) or the regional Climate Protection Training Centre (Klimaschutz Ausbildungszentrum) in lower Austria, which can provide important lessons to build on in the future.
Austria could do more to understand and prepare for the skill implications of the green transition. SAA can help to understand skills gaps and support the Just Transition process. While most existing studies in Austria focus on certain industries, SAA exercises with a more specific skill focus, and with results differentiated by region, would be valuable.
The tradition of social dialogue in Austria can be leveraged to share knowledge and build collaborations. Austria could build on developed systems of policy co-operation between the government, employers’, and workers’ interest groups to better disseminate existing evidence on changing skill needs for the green transition. Social partnership would also facilitate collaboration at a local level and help strengthen and scale up approaches to develop relevant skills for the green transition.
France has undertaken a range of studies on skills needs related to the green transition, with different methods and approaches. SAA exercises are conducted by a broad range of actors, including NGOs, government ministries and agencies, research institutions, or private companies. Mostly, their focus lies on forecasting the occupational impact of the green transition. Existing studies rely on very diverse assumptions, meaning that they are often not consistent and difficult to compare. The creation of the National Observatory for Employment and Occupations in the Green Economy (Observatoire national des emplois et des métiers de l’économie verte, Onemev) in 2020 has brought momentum to the policy agenda. Its responsibility is to produce, collect and disseminate evidence on employment and skills changes linked to the green transition. The Observatoire acts as valuable central unit that generates trustworthy information and at the same time collaborates with relevant stakeholders for the green transition, including adult training institutions.
France could make existing evidence on skill needs for the green transition more visible. While many studies on the impact of the green transition on the French labour market have been undertaken, their use in policy making remains relatively limited. More efforts could be made to disaggregate and communicate findings of SAA exercises for the different regions in France in order to make them more practicable for local decision makers and stakeholders in the skills ecosystem.
More emphasis should be placed on the skills implications of the green transition. While many programmes are focused on the green economy, policy action based on evidence about changing skills needs is yet scarce. Focusing on skills changes and requirements linked to the green transition would involve actors in the French skills ecosystem more fully to ensure a close link between employment and training policy.
Skills intelligence for the green transition is relatively recent in Norway. In the past few years, the ‘green’ dimension has featured as a part of larger, more general SAA exercises, such as those conducted by the Committee for Skills Needs and the largest employer organisation, the NHO. Efforts to perform more comprehensive assessments had been made by the Federation of Norwegian Enterprise (Virke), but the most substantial analysis came in mid-2023 in the form of a report on the future skills needs of the green transition, developed by the Norwegian Committee for Skills Needs. The report featured comprehensive analysis on online job vacancies and new training programmes. However, due to the relatively recent developments in the field, no major skills initiatives or programmes on the green transition have been implemented so far.
Norway could give greater visibility of the new report on skills needs for the green transition by the Committee of Skills Needs to ensure the results are used in policy making. Further efforts are required by public bodies to develop information systems that disseminate skills and employment-level information generated by SAA exercises. This has the potential to facilitate their use in policy making.
Employer and employee associations should create and adjust existing policies on training and career guidance to reflect the changes in the labour market brought forward by the green transition. Associations in Norway are strategically positioned to build capacity and support employers in adapting to the green transition and ensure their employees are keeping up with changing skill needs through investment in training.
Sweden has only very recently turned their attention to the labour market needs of the green transition but has made good progress since. Much of the research has been industry-driven or led by private research organisations. The Swedish Innovation Agency, Vinnova, is emerging as the public body with the most extensive overview of developments in the field. The public employment services in northern Sweden are collaborating with industry players as well as education and training institutions to respond to the impending labour shortages generated by the greening of the battery and steel industry, and have initiated a number of skills and employment-related programmes. By contrast, in other parts of the country, the public employment service does not devote yet significant attention to skills for the green transition.
The Public Employment Service in Sweden should include analysis of the green transition to their existing portfolio of SAA exercises. There needs to be more attention from public bodies on skills for the green transition, and more awareness-raising on the wider labour market impact of moving towards a cleaner economy. Thus far, the public employment service has focused on changes in skills needs related to electrification, batteries, and mining, and there is not sufficient understanding of how the green transition will impact other jobs and industries. Taking a skills approach to analyse labour market developments will help to unlock the information for a wider range of occupations and sectors.
Sweden should improve the co-ordination of work on skills for the green transition. There are currently many actors that have started analysing skills needs and designing small-scale policies to promote the green transition; however, many initiatives suffer from lack of institutional support which undermines the opportunities for scaling up. A central body should help co-ordinate different efforts and ensure information exchange and capacity building among key stakeholders.
References
[1] Keese, M. and L. Marcolin (2023), “Labour and social policies for the green transition: A conceptual framework”, OECD Social, Employment and Migration Working Papers, No. 295, OECD Publishing, Paris, https://doi.org/10.1787/028ffbeb-en.
[4] Kwauk, C. and O. Casey (2022), “A green skills framework for climate action, gender empowerment, and climate justice”, Development Policy Review, Vol. 40/S2, https://doi.org/10.1111/dpr.12624.
[2] OECD (2023), Job Creation and Local Economic Development 2023: Bridging the Great Green Divide, OECD Publishing, Paris, https://doi.org/10.1787/21db61c1-en.
[3] Vona, F. et al. (2018), “Environmental regulation and green skills: An empirical exploration”, Journal of the Association of Environmental and Resource Economists, Vol. 5/4, pp. 713-753.