Climate change is one of the existential threats of our times. Left unaddressed, 80 million full-time jobs could be lost by the end of this decade, and 132 million people could fall into poverty due to climate change.
The European Green Deal (EGD) represents the EU's commitment to reduce carbon emissions drastically and decouple economic activities from natural resource consumption.
However, the EGD aims to achieve more than simply addressing the climate challenge. It seeks to ensure a just transition, leaving no person or region behind.
Like in other transitions in history, some groups of the population or regions could struggle more than others. The recent World Bank report Making the European Green Deal Work for People shows that, with appropriate social policies, the green transition could minimise the transitions' effects on wage differentials between university graduates and the rest and reduce regional inequalities across Europe.
For instance, technological change will likely concentrate in a few places in Europe.
Cities like Brussels, Frankfurt, Milan, and Paris have the infrastructure and human capital to host successful firms whose technologies are closer to the green knowledge frontier. Firms in those places will likely innovate or absorb technological progress, leading to reduced greenhouse gas (GHG) emissions.
Those places also host the lion's share of human capital and the influx of technology will raise the demand for highly skilled workers. A human-centred approach must therefore include policies to mitigate the green transition's unintended distributional consequences and adapt households to the new green economy. Mitigation policies include income support, health assistance—particularly mental health — and, in some cases, early retirement.
Adaptation means effective programs for re-skilling workers. A task-based analysis of occupations in growing green industries and shrinking fossil-fuel-intensive industries could inform the most cost-effective jobs transition.
Our research provides an example of job transition using machine learning and artificial intelligence to analyse and match occupations in expanding and contracting industries at the task level: when tasks in a brown and a green job are similar, a more efficient transition is established.
For instance, an oil and gas processing controller's most efficient job transition —the one that makes the most of the skills the worker already possesses — is towards a process controller in fertiliser production, even though he or she can also become, at a higher cost and greater effort, a wastewater plant operator or a chemical reactor controller.
Public Employment Services (PES) could harness these tools to identify suitable career paths for workers transitioning between shrinking "brown" industries and growing green sectors.
Through education policies, human development also plays a critical role in shaping the long-term effects of the green transition. To reduce carbon emissions, the higher education institutions and research centres sector (HEIs) play a critical role in delivering the technologies that reduce GHG emissions. HEIs should also find new materials to satisfy our consumption needs without depleting valuable natural resources.
But technology alone is insufficient.
Central to addressing these challenges is developing a robust pool of science, technology, engineering, and math (STEM) graduates and strategy for advanced human capital (i.e., MSc and PhDs) to deploy and implement new R&D projects. For example, the Warsaw-based Collegium Civitas offers an MBA in climate and energy policy management.
Technical and Vocational Education and Training (TVET) systems in Europe will be key in adapting workers to the new demand for skills and a more dynamic, technology-driven, labour market.
Education systems should prioritize the provision of foundational skills (numeracy, literacy, and social skills) for all students, particularly for the relatively disadvantaged students in TVET systems. These core foundational skills enable life-long learning, crucial in a dynamic labor market characterized by changing needs and professional requirements.
A key aspect of sustaining the green transition is updating educational curricula to address the climate change challenges and promote individual action though behavioural change. The challenge is immense: in Hungary, over 80 percent of 15-year-olds worry about the global environment, yet less than half believe they can make a difference.
The green transition in Europe can take a significant step forward in addressing climate change, without leaving people behind.
We argue that policies across all levels of government need to be aligned to make for an effective transition; that leveraging private capital will contribute to mobilising the needed financing; that a sustainable transition requires addressing the concerns of the most affected; and that for a green transition to be attainable, a behavioural change altering our consumption patterns and way of living need to respect our planetary boundaries.
Fadia Saadah is currently the human development director for Europe and Central Asia Region at the World Bank. She held several leadership and managerial posts at the World Bank including as director, Global Practice for Health, Nutrition and Population (HNP); senior advisor for Europe and Central Asia Region; manager at the Operational Policy and Country Services; and manager for HNP for the East Asia and Pacific Region.
Gallina A. Vincelette is the World Bank’s country director for the European Union (EU), based in Brussels, Belgium. She is responsible for guiding the bank’s operational and knowledge engagement with client countries and the EU institutions. Prior to her position in Brussels, she was practice manager for Macroeconomics, Trade, & Investment in the Europe and Central Asia region of the World Bank.
Fadia Saadah is currently the human development director for Europe and Central Asia Region at the World Bank. She held several leadership and managerial posts at the World Bank including as director, Global Practice for Health, Nutrition and Population (HNP); senior advisor for Europe and Central Asia Region; manager at the Operational Policy and Country Services; and manager for HNP for the East Asia and Pacific Region.
Gallina A. Vincelette is the World Bank’s country director for the European Union (EU), based in Brussels, Belgium. She is responsible for guiding the bank’s operational and knowledge engagement with client countries and the EU institutions. Prior to her position in Brussels, she was practice manager for Macroeconomics, Trade, & Investment in the Europe and Central Asia region of the World Bank.