Net Zero Won't Repeat The Job Destruction Of Deindustrialisation - But It Will Mean Significant Change For 1.3 Million Workers In Emissions-intensive Jobs
22nd June 2022
The UK's decarbonisation drive will involve major change across the economy, particularly for the 1.3 million workers in carbon-intensive ‘brown' jobs who will need to adapt to cleaner technologies and processes. It will not destroy jobs in the way that episodes of structural change have done in the past, according to new Resolution Foundation and LSE analysis published on Monday 20 June 2022.
Net zero jobs - the 25th report for The Economy 2030 Inquiry, a collaboration with the LSE, funded by Nuffield Foundation - examines how the UK's transition towards net zero will affect the types of jobs people do, and the opportunities and challenges that this will present for the labour market.
The UK’s ‘green jobs revolution’ has barely begun, with the share of ‘green jobs’ having grown by just 1.3 percentage points over the past decade. But change will accelerate over the course of this decade as firms replace emissions-intense processes with clean technologies and practices.
The sheer pace of change coming has led some to claim that the decarbonisation drive of the 2020s and 2030s will lead to a repeat of the job destruction of deindustrialisation that saw manufacturing shrink as a share of employment by 5 percentage points a decade in the 1970s and 1980s.
But the research shows this is not an accurate way to think about the impact of decarbonisation on the labour market, because its main effect will be to change existing jobs rather than to destroy them. It identifies sets of ‘green’ and ‘brown’ jobs that are expected to face the most significant change.
Decarbonisation will disproportionately affect the UK’s 1.3 million ‘brown job’ workers who are most exposed to the impacts of the transition, as they are most prevalent in emissions-intense sectors. This includes HGV drivers and energy plant operatives who will be driving different kinds of vehicles and producing electricity in different ways in the decades ahead.
The other key group affected are the 4.3 million workers in ‘green jobs’. Some of these are likely to grow - including wind turbine engineers and environmental and conservation professionals – while others will see their jobs change – including technicians and managers of various types.
The real challenge, it says, is to ensure that low and mid-skilled workers can benefit from the net zero transition with most areas of job growth being higher skilled.
There are strong incentives to move to ‘green job’ sectors, which are set to grow in size, and already carry an average wage premium of 8 per cent over non-green jobs. And with two-in-five ‘green’ and ‘brown’ jobs found in overlapping sectors – construction, manufacturing, agriculture and energy – calls for brown-to-green job moves are common.
But the report cautions that it is all too rare for workers to switch from ‘brown’ to ‘green’ jobs – largely due to the significant differences between the tasks that ‘green’ and ‘brown’ workers complete.
‘Green job’ workers are over three times more likely to be in higher-qualified, professional jobs compared to ‘brown jobs’ (83 per cent versus 26 per cent), with the majority of ‘brown’ workers in lower-qualified, manual jobs (54 per cent).
These differences help explain why more than a quarter of the highest-paid workers are in ‘green jobs’ (27 per cent) while ‘brown’ workers are concentrated in the middle of the income distribution.
Furthermore, the limited growth in ‘green jobs’ so far has predominantly been driven by middle-aged workers moving from non-green jobs into similarly skilled ‘green jobs’, rather than employing a wide variety of workers.
This diversity challenge can also be seen in the ethnic mix of these jobs, with over 14 per cent of white working-age adults in a ‘green job’, compared with 8 per cent of black working-age adults. ‘Brown jobs’ are somewhat less concentrated among white workers, however, with 4 per cent of white adults in a ‘brown job’ and 3 per cent of black adults.
The authors note than rather than worry about job destruction, policy makers must focus instead on ensuring that lower-skilled workers in ‘brown jobs’ can adapt to clean technological change, or receive the skills and training required to move to expanding sectors, including largely higher-paid ‘green job’ sectors.
Otherwise, the risk is that the benefits of the UK’s coming ‘green jobs revolution’ will accrue largely to already high-skilled, higher-paid workers – leaving other workers behind.
Kathleen Henehan, Senior Research and Policy Analyst at the Resolution Foundation, said, "The UK’s net zero transition has begun to affect the labour market, but more rapid change is expected this decade given enhanced commitments in policy and business strategies.
"This has led some to warn that decarbonisation could be as damaging as deindustrialisation in terms of job destruction. Some transitions into new jobs will be required, but the reality is most workers will feel the net zero transition through changes to the jobs they already do, rather than redundancies and completely new types of work."
Anna Valero, Senior Policy Fellow at the Centre for Economic Performance, said, ""Securing a ‘green job’ is likely to lead to higher wages, but entry into those jobs is dominated by those with higher skills. Policy makers should prioritise supporting workers to adapt to new technologies and tasks, either in their current jobs, or by moving to ‘green’ jobs through an expansion of skills and training. That will hold the key to ensuring that decarbonisation can lead to better jobs and pay for as many people as possible."