GUILLERMO MONTT

Guillermo Montt has been a Senior Economist at the Research Department of the International Labour Office (ILO) since 2016. He leads research on the relationship between employment, decent work and the transition to a green economy. Prior to joining the ILO, Guillermo worked for the OECD at the Directorate for Education and Skills and the Directorate for Employment, Labour and Social Affairs. A Chilean national, he holds a PhD. in Sociology from the University of Notre Dame.

 

Climate change, driven by forces such as deforestation and fossil fuel use, defines today’s global challenges. With the Paris Agreement, countries have agreed to takeaction to limit global warming to 2°C.

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Emissions related to the use of fossil fuels to meet energy demand (e.g. electricity, heat, transportation and industry) are the largest contributor to greenhouse gas accumulation (IPCC 2014) [1]. Indeed, action in the energy sector alone can achieve the goals laid out in the Paris Agreement. This includes reducing the share of fossil fuels in the energy mix, increasing the share of renewable energy sources (e.g. wind, solar photovoltaic, biomass and geothermal), and improving energy efficiency across the economy (IEA, 2015) [2], as depicted in Table 1. [3]

The energy sector is tightly linked to other sectors of the economy; changes in the energy sector will not only affect employment in the sector itself (direct effects) but will also affect other sectors (indirect effects) because of these tight linkages (see, for example, Cassar, 2015 [4]; Garrett-Peltier, 2017 [5]; OECD, 2010 [6]; Stehrer & Ward, 2012 [7]; WEF & IHS CERA, 2012 [8]; Wild, 2014 [9])

Using EXIOBASE, a multiregional input-output table that serves as a model of the worldwide economy, the ILO (2018) [10] estimated the potential impact on worldwide, economy-wide employment of the adoption of the changes suggested to specific countries and regions by the International Energy Agency (2015) [11]. By 2030, a global economy that acts to limit climate change will have 0.3 per cent more employment than an economy that follows the business as usual path. That is, some 18 million jobs could be added to the economy following steps to limit global warming to 2°C. Because of efforts to increase energy efficiency and renewable energy, job creation will take place in the construction sector, the manufacture of electrical parts and machinery, the mining of copper ores, and the renewable energy sector (e.g. solar photovoltaic, wind and hydro). As a result of this transition, jobs will also be lost; losses are concentrated in sectors closely related to fossil fuel extraction and the generation of electricity from fossil fuels (e.g. petroleum and coal) [10].

On a regional scale, Asia and the Pacific, the Americas and Europe will experience net job creation. Africa and the Middle East, given their reliance on fossil fuels, will experience net job losses. The job losses predicted for the Middle East and Africa can be avoided with policies to diversify their economies. Similarly, net job creation will only occur if emerging industries find adequately skilled workers to satisfy demand [10].

The projected changes, and the assumptions therein, highlight the complementary policies needed to maximise the creation of decent jobs and to protect workers who may lose out from these changes. These complementary policies include, as highlighted by the ILO’s Guidelines for a just transition to environmentally sustainable economies and societies for all, skills development policies, industrial policy, macroeconomic policy, active labour market policies, social protection policies and policies to promote social dialogue (ILO, 2015) [12].