The green transition is changing jobs, skills, and local economies. It poses new challenges but also opportunities, both of which will differ across places within countries. This report, Job Creation and Local Economic Development 2023: Bridging the Great Green Divide, provides novel evidence on those risks and opportunities across regions in 30 OECD countries. It examines the geography of green-task and polluting jobs and examines the impact of the green transition on gender and socioeconomic inequality by identifying the characteristics of workers in those jobs. Furthermore, the report tracks the progress regions have made in greening their labour market over the past decade. The report provides actionable policy recommendations that can help deliver a green and just transition. It looks at past and other ongoing labour market transitions and identifies local success drivers that can help communities prepare for and manage the impact of the green transition. Finally, it points out actions for ramping up and adapting local skills development systems to meet the demands of the green transition and equip their workforce with the right skills for the future.

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BRIDGING THE GREAT GREEN DIVIDE
JOB CREATION AND LOCAL ECONOMIC DEVELOPMENT 2023
Dr. Lukas Kleine-Rueschkamp
OECD Centre for Entrepreneurship, SMEs, Regions and Cities

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Bridging the Great Green Divide
Part 1
The green transition and
jobs, what do we know?
Part 2
Implications for local jobs
and skills
Part 3
Lessons from past
transitions
Part 4
The way forward: local
actions for a green future

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What do we know
about green policies
and labour markets?
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The push for green growth
Across the OECD,
green policies
abound
• Clear ramifications for
jobs and economic
development
But labour market
impacts are less clear
• Who will benefit or face
risks?
• Where will be the impact
largest?
• What is a green job?

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How do we measure green jobs in regions?
Green jobs can be
classified in two ways
Our approach is bottom-up.
We measure jobs with green tasks.
Top-down
Industry/Sector
Industries/GHG
Bottom-up
Occupations
Tasks or skills
Main advantages:
• Captures regional information
• Captures the entire economy
• Directly linked to policy

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What are green jobs?
Green jobs have
at least 10%of tasks
directly supporting
sustainable development

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The geography of
green-task and
polluting jobs
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The geography of green jobs
Around 18% of workers in the OECD have jobs with a
significant share of green tasks
Share of green-task jobs
Green regional
employment
shares
7% in
South
Dakota, US
35% in
Stockholm,
Sweden
Within-country
disparity
2 pp in
Austria
17 pp in
the United
States

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The geography of polluting jobs
Share of green jobs
Australian Capital
Territory: <4%
Central Moravia,
Czech Republic: 28%
Regions relying on high-emission sectors face greater risks of job losses

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Labour markets are getting slightly greener
Little change in share of green jobs… … but the demand is becoming increasingly green
0
10
20
30
2
0
1
1
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
2
0
1
6
2
0
1
7
2
0
1
8
2
0
1
9
2
0
2
0
2
0
2
1
Share
of
green-task
jobs
(%)
Median OECD 25th percentile OECD 75th percentile OECD

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What explains regional differences?
Over- and underrepresentation of green-task and
polluting jobs in capital regions
Regions’ ability to benefit from the green
transition depends on:
• Industrial composition
• Educational attainment of the workforce
• Innovation activity
• R&D investments
In capital regions green-task jobs are over-
represented and polluting jobs underrepresented

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A new gender divide?
Women are significantly under-represented in green-
task jobs

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Inequalities in local labour markets
Employees in green-task jobs have:
• better education
• higher average skills levels
• 20-30% higher wage premium
• but are as likely to participate in training
Workers in polluting jobs are least
likely to train and learn

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Green jobs are concentrated in large firms
Large firms account for
31% of green jobs
compared to other jobs

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Lessons from past
transitions
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Similarities in transitions:
Large adjustment costs
Uneven effects: geographically and
demographically.
Mitigation requires decisive and proactive
measures.
Inaction risks resentment.
Globalisation:
Driven by deregulation and competitiveness
Exit from coal
Highly market-driven (natural gas, oil,
automation),
The phase-out of coal affects a significantly
smaller fraction of the labour market.
Exit from coal
•Market-driven
•Affects a significantly
small fraction of the
labour market.
Digitalisation
•Affects vast majority
of jobs in OECD
countries
Globalisation
•Driven by
deregulation and
competitiveness
Green transition
•Policy-driven
•Positive externalities
of the exceed
employment and
economic gains.
Similarities in transitions
Large adjustment costs | Uneven effects | Mitigation measures | Inaction risks resentment
Lessons from past transitions

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Local and national success drivers
Share a clear
and long-term
vision and
strategy
Anticipate and
pursue
proactive
measures
Build strong
coalitions
focussing on
social inclusion
Invest in local
re-skilling and
re-education
programmes
Invest in
attractiveness
of the region
and innovation

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The way forward:
local actions for a
green future
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Local actions for a green future
Local adult
learning
systems that help
workers adapt to
the changing labour
market
C
E
A
Green skills
coalitions
for environmental
policies to be met
with labour market
interventions
Labour Market
Intelligence
that informs
effective green
policies
B
Public
Employment
Services that
ensure a just
transition
D
Local development
efforts that help firms
create green jobs and
boost local economic
growth

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Collaborating with stakeholders
Better alignment of
environmental and
labour market policy
through collaboration
across ministries
Engagement of
regional and local
governments
to reflect the place-
specific impact of the
green transition
Local green skills
coalition
for better-informed
policy response and
to secure buy-in

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Labour market intelligence
Reflect the impact of
environmental
policies in models used
to produce LMI
Collect regional and
sectoral data given the
differences in the
impact of the green
transition
Include users of LMI
in their governance
structure to ensure
good alignment with
policy use
Carry out
complementary,
targeted studies e.g.,
on individuals at high-
risk of unemployment
•For students, workers
and employers
•To avoid green skills
shortages and mismatches
•For policy makers, training institutions and PES
•To enable the green
transition
•To effectively support
displaced workers
What can be done?
Why is it needed?

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Local adult learning systems
Comprehensive
strategy
Sectoral
approach
Local strategies
for regions
Support and
incentives for
employers
•Adult learning
systems struggle to
keep up with labour
market changes
•Green transition
will increase the
need to re-skill and
up-skill workers
STRATEGIES
CHALLENGES

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The role of Public Employment Services
Role 1:
Support
the transition
of workers in
polluting jobs
Role 2:
Offer services
that reflect
the effects of the
green transition
Proactively
identify workers
at risk of
displacement
Offer career
guidance and
training tailored
to individual
needs
Collaborate with
employers when
designing and
delivering training
Use up-to-date
LMI to reflect the
impact of the
green transition
in services
Provide green
skills training,
especially in
sectors with
shortages
Consider the
double-dividend
of placing
workers in green
jobs

24. Thank you!
lukas.kleine-rueschkamp@oecd.org
ada.zakrzewska@oecd.org
agustin.basauri@oecd.org
tijs.creijghton@oecd.org