Climate Action Can Be One of the World’s Biggest Job Creators
We are in the midst of a great economic shift — one that will shape livelihoods and growth for decades to come.
The rise of AI and digitalization, geopolitical changes, uneven population growth, and the urgent need to cut emissions and adapt to climate impacts are combining to profoundly reshape economies — particularly the labor market. Unlike geopolitical and technological shifts, which are likely to result in net job losses, the transition towards resilient, low-carbon economies could be a powerful engine for expanding the workforce.
Our new research shows the low-carbon transition could create nearly 375 million additional jobs over the next decade in four key sectors: energy, construction, manufacturing and agriculture. This midpoint estimate reflects a 20% increase in jobs in those sectors at a time when AI and other factors threaten to shrink the labor force.
Which Jobs Will Grow in a Resilient, Low-carbon Economy?
Jobs in climate adaptation have received far less attention than those in clean tech, yet our research shows they could make up 280 million of the total. As the world warms, there is an urgent need for a multitude of workers to shore up the resilience of our crops and fisheries, revive biodiversity hotspots, and restore our terrestrial and wetland ecosystems. Similarly, there is growing demand for technicians to retrofit our buildings into energy-efficient shields against extreme heat and other climate threats.
Like any great economic shift, some sectors will benefit more than others. Agriculture and land use could be one of the largest sources of employment, with regenerative agriculture and nature-based solutions generating 195 million new jobs — equivalent to about 17% of the sector’s current workforce. Construction could see the largest percentage growth, adding 175 million jobs. That’s roughly 70% of today’s construction workforce.
This is a significant opportunity — but one that’s not guaranteed.
Securing hundreds of millions of good jobs requires governments and businesses to invest now in workforce development. This means equipping workers with the skills they need to install wind turbines and solar panels, retrofit buildings to reduce energy use, shift from conventional to sustainable farming, and more. It means re-skilling people whose jobs may disappear, such as fossil fuel workers, while creating new opportunities for the labor force of the future. It means developing entrepreneurship to enable job growth. And it means righting some of the wrongs of the past, like expanding roles for women and others historically boxed out of job markets.
Prioritizing people and their livelihoods can deliver so much more than job growth — it makes the transition to a resilient, low-carbon economy politically durable. If we get this transition right, it can ultimately create stronger economies, improve social cohesion as well as curb climate change.
While the low-carbon transition is likely to generate net job gains, it will involve substantial job churn. A total of 630 million workers will potentially be affected by job transitions. This is particularly evident in the energy space. While the sector will ultimately add 20 million jobs in electrification, renewable energy development, and power grid expansion, there will be less demand for jobs focused on fossil fuel extraction.
That’s why investing in workforce development and re-skilling is so essential. Opportunities and risks will need to be managed as jobs will be gained and lost across sectors and geographies. The transition can’t leave anyone behind — and with the promise of so many new jobs, it doesn’t have to.
But countries that potentially have the most to gain in terms of job creation are also the least equipped to seize the opportunity due to their labor market structure and lack of skills readiness and social protection measures. This includes many low-income countries in Africa.
Against this backdrop, closing the widening skills gaps in foundational, technical and transversal skills must become a much greater priority. The scale of the challenge is staggering: More than 760 million adults aged 15 and older do not possess basic numeracy and literacy skills; meanwhile, and 70% of children in low or middle-income countries cannot read by age 10. And while data on skills are relatively weak, estimates show that nearly three-quarters of youth aged 15-24 are off track in acquiring employment-relevant skills.
While these foundational skills are lagging, demand for green skills grew at a rate of 12% from 2023 to 2024 — twice the rate of supply.
Unless we take action to prepare now, the world will be hurtling toward a massive "talent crunch" that threatens to hold the global economy back and put a safe and sustainable future out of reach.
For example, a projected 14% shortfall in the number of renewable energy workers needed by 2030 could significantly slow the deployment of low-carbon technologies and delay emissions reductions. Over time, such delays would translate into higher cumulative emissions and increase the risk of additional warming, estimated at up to 0.7 degrees C. Every tenth of a degree of warming matters, increasing the risk of floods, droughts, wildfires and other dangerous impacts.
Creating the Workforce of the Future
So what will it take to reshape the labor force for the better while confronting climate change?
For one, governments and businesses will need to be intentional about putting people’s livelihoods at the center of their economic and climate strategies. They’ll need to improve labor market data and analysis and mobilize a better funded and more integrated policy response. This isn’t yet happening widely. Only half of countries’ national climate plans, or “NDCs,” reference workforce development strategies; only 1% offer concrete means of financing them. Corporate strategies are similarly scant on green skill-building.
The Philippines offers a model for others to follow. The country made green jobs a legislative priority, enshrined in policies like the Green Jobs Act, the Philippine Development Plan and the Labor and Employment Plan. It has also brought federal agencies together through the Inter-agency Committee on Green Jobs, led by the Department of Labor, to align education, environment, trade and finance around a shared goal: prioritizing green workforce development and skill-building. This is the sort of coordinated planning and policymaking that can integrate low-carbon jobs across all parts of the economy.
Innovation is also key. Governments and businesses need to test, identify and scale a new generation of workforce development programs that are fit for purpose, flexible and modular, often working with delivery and implementation partners to translate policy objectives into effective programs. This should include building smart accreditation and job matching platforms that offer pathways to jobs and livelihoods. Programs should prepare people for new and emerging low-carbon, climate-resilient jobs, as well as re-skill existing workers whose jobs are evolving. They should also include those typically left out of workforce development programs, like informal workers, women and rural communities.
In Pakistan, energy utility company K-Electric’s Roshni Baji program is one example of innovative workforce development. The program helps women from low-income areas become certified electricians, a historically male-dominated field. Alongside technical skills, women receive education in motorbike riding, self-defense, communication and stress management. It has already trained 200 women with electrical skills that are easily transferable to solar installation, microgrid maintenance, energy audits and other activities essential for greening the energy system. This is the type of innovation that can ensure the low-carbon transition benefits everyone.
And finally, none of this will happen without sustained investment. Workforce development and education are chronically underfunded, often treated as an expense rather than a high-return investment. Lower-income countries spend less than 0.1% of GDP on labor market programs. While high-income countries spend more, the percentage share has been declining over the past 2 decades. Governments and corporations alike must work together to align fiscal policy with employment goals and create the right incentives for businesses to invest in the capabilities of their workers. There’s a role for financial institutions like the multilateral development banks, too, in embedding workforce investments into climate and development finance.
Kenya’s plans show promise in this area. The country’s draft Green Fiscal Incentives Policy Framework seeks to mobilize private investments for a low-emissions, resilient economy — particularly in agriculture, which supports nearly 25% of Kenya’s GDP and is highly vulnerable to the impacts of climate change. The framework proposes tools to attract and de-risk private finance. They include: a Green Investment Bank and Credit Guarantee Scheme to unlock loans for agribusinesses and green small- and medium-sized enterprises; a Green Bonds framework to channel capital market investments; and capacity-building to equip the workforce with relevant green skills. If effectively implemented, these mechanisms could stimulate job creation across sustainable farming, renewable energy for irrigation, and agricultural processing — sectors that are vital for both climate resilience and rural employment. This is the type of finance that can create multiple benefits at once.
Seizing the Moment
The economy is changing. Countries that adapt quickly will attract investment, lower costs, and create good, steady jobs. Those that hesitate simply risk falling behind.
The transition to a new and more resilient, low-carbon economy is ultimately about improving people’s lives, both today and in the future. This is true for so many things — breathing cleaner air, reducing energy bills, easing traffic congestion, and protecting communities from escalating storms, wildfires and withering heat. And if we seize this enormous opportunity, we can also deliver well-paid jobs, stronger local economies, and a more secure future for workers and their communities.