The year 2022 set a number of alarming records as a result of climate change and environmental degradation. It was one of the warmest years on record in many countries, widespread draught took its toll on nature and economic activities, and contamination of our environment and air continues. Encouragingly, OECD governments are taking action and momentum is growing for the green transition.

Tackling climate change and environmental degradation is one of the most formidable tasks the world faces. Yet, a lack of workers with relevant skills could hold back the green transition. The environmental and climate challenges of our time call for new sustainable solutions and significant reductions in emissions, which will affect industrial production, consumption and energy provision globally. This shift to a sustainable and net-zero economy will result in a significant transformation of local labour markets, as workers move into different occupations and sectors. The green transition compounds megatrends such as digitalisation and demographic change that have also been reshaping the geography of jobs and the world of work.

This chapter provides an overview of the concept of green jobs used in this report. It describes the evidence of the effects of green policies on the economy, including the labour market. It reviews and explains the main approaches commonly used to define green jobs and describes their advantages, caveats, and limitations. Finally, it describes how the share of green jobs can be estimated at the regional level to shed light on the green transition’s impact on local labour markets and to inform policy.

This chapter sheds new light on the effect of the green transition on local labour markets. It provides novel estimates for green and polluting employment across OECD regions. It analyses if and why regional labour markets differ in the extent to which their jobs comprise green tasks. It also examines whether green-task jobs differ from non-green task jobs and how that might impact socio-economic divides within local labour markets. Finally, it uses information on recent labour demand to assess in which regions a greater share of new vacancies is green.

This chapter examines past labour market transitions that affected regional labour markets and communities. It analyses how digitalisation, globalisation and the transition out of coal compare to the green transition. Furthermore, it examines local success drivers of managing past labour market transitions and aims to draw policy lessons for the green transition. The chapter combines macro analysis of transformations, such as globalisation or the shift away from coal, with local case studies from around the OECD.

This chapter examines how local skills systems need to adapt to enable a green transition and, at the same time, deliver it in a socially just way. The chapter focuses on four skills policy dimensions that complement local economic development efforts and are vital to achieve these goals. First, it lays out strategies for building effective green skills coalitions through improving collaboration across government and beyond. Second, it discusses the importance of sound regional labour market intelligence that reflects the impact of the green transition. Third, it offers recommendations on tailoring local adult learning systems to produce green skills and talent. Fourth, it examines the role of Public Employment Services in their local actions to promote a just transition that supports displaced workers and other vulnerable groups.