Weekly Economic Briefing: Work towards net zero | Deloitte Australia has been saved
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The last two weeks saw policymakers and world leaders converge on Sharm el-Sheikh, Egypt to take part in global climate talks at COP27. Amongst talks on adaptation and mitigation, achieving a just transition remained a top priority to ensure no one is left behind as the global economy decarbonises.
At the centre of these equity discussions are people, their work, and their livelihoods.
A new report – Work Toward Net Zero – released at COP27 by Deloitte provides a policy framework which identifies workers and their skills as a driver, rather than the consequence, of economic transition.
According to the report’s analysis, more than 800 million jobs worldwide—around one quarter of the global workforce today—are highly vulnerable to both climate extremes and economic transition impacts.
Countries with highest job vulnerability were identified to be in the African and Asia Pacific regions, with many workforces in these regions having more than 40% of employment in highly exposed industries.
Chart 1: Global Job Vulnerability Index
Source: Deloitte Economics Institute
Note: figures are in FTE
The Index is not a measure of job losses. Rather, it indicates relative “job vulnerability” based on a region having the most to lose (economically and socially) if policy does not mitigate both climate change impacts and the costs from the economic transition to net zero.
Relative to the rest of the world, Australia is less exposed, but it is not immune to the impacts of disorderly transition.
According to the Index, around 3 million full-time equivalent jobs—around one-quarter of Australia’s workforce today—are employed in industries that are highly exposed to both climate extremes and economic transition impacts. These workers are employed in sectors such as agriculture, conventional energy and mining, manufacturing, transportation, and construction.
The report demonstrates that an active transition with the right policy support from governments, means more jobs and better outcomes for workers, in comparison to a passive, uncoordinated transition to net zero.
A coordinated and rapid transition to net zero is expected to deliver more than 300 million additional jobs globally by 2050. This employment dividend can only be achieved by active policy support from governments globally in workforce and decarbonisation policy efforts.
Each region will have its own pathway with a range of unique challenges and opportunities. Understanding these variations and nuances is critical to informing the level and type of government support needed.
To help guide decision makers, the Deloitte Economics Institute has developed a Green Collar workforce policy agenda focused on five clear action areas:
Ambitious decarbonisation targets aligned with the latest climate science and investments in rapid decarbonisation
Strategic industrial policy that targets traditional strengths and new areas of economic growth
High-value job creation that establishes secure career pathways for workers and graduates
An adaptive education and skills system to produce a skills pipeline that aligns to industry demands for transition
Active skills reallocation through policies that direct skills to where they are needed.
Developing and harnessing green collar workforce skills will be vital if we are to effectively transition to a net zero economy.
This blog was co-authored by Sam Collins (Graduate Economist, Deloitte Access Economics).
David is a macro economist with extensive experience in applied economic and quantitative analysis of the Australian economy, along with considerable experience in labor market analysis. David is a regular commentator on macroeconomic trends, and prepares a weekly economic briefing newsletter.