Best Practice Report


Policy design and implementation / Labor and skills development policy

4. Labor and skills development policy

Work with the private sector to anticipate, and address the effects of green growth policies on employment, using labor market and skills development policies to enable the reallocation of workers from declining to growing sectors and help prevent bottlenecks to green growth.

Well-targeted skill development policies, such as support for marginalized or lower skilled workers, can reduce social inequalities. A transition to green growth brings significant potential for creating new green jobs. In Korea, the development of green technologies is expected to result in one million additional jobs by 2020 (ILO, 2011). At the global level, the International Labor Organization (ILO) has estimated that green jobs have the potential to employ 100 million people worldwide over the coming decade in sectors ranging from agriculture to construction and renewable energy to sustainable tourism (ILO, 2013).

The largest structural changes accompanying green transformation are likely to take place in fossil fuel based and renewable energy industries, with the former experiencing the steepest decline in employment and the latter the sharpest increases (OECD 2012a; and 2013a).

Labor market and skills development policies can play an important role in supporting the reallocation of workers from declining to growing sectors and help prevent bottlenecks to green growth. A goal of labor market and skill development policy is to smooth the green transition in particular for workers in sectors that will lose out as a result of green growth, such as the fossil fuel industries. At the same time, without well-designed policies to ensure that workers and firms have adequate green skills, skill bottlenecks can arise in expanding green sectors and industries and be a serious impediment for growth and investments (OECD, 2013a). Modeling results indicate that the restructuring of the energy system to low carbon intensity can be accomplished with only minor effects on economic growth (GDP), if labor markets adjust smoothly to structural employment changes (OECD, 2012a). Forward-looking policy interventions that anticipate structural change are, therefore, crucial to accompany the transformation. Figure 3 shows the role of labor market and skill policy for green growth.

Governments should seek to assess, anticipate, and address the effects of green growth policies on employment. This can often best be done through joint initiatives with the private sector. Anticipating structural changes and providing the support needed to shift workers to new occupations is central to inclusive green job creation and to avoid bottlenecks (ILO, 2011). In the Brussels region, for example the construction sector, trade unions and public authorities established the Professional Reference Centre for Construction (PRCC) to address skills shortages in eco-construction, renovation and retrofitting by bringing together employment and training services, educational institutions and the construction sector. It offered employers a cost-free training opportunity and targeted marginalized and low skilled workers for integration in the labor market (Bruxelles Environment, 2010).

However, such active labor market policies are a particular challenge in many developing countries, where the information gathering capacity is low, where training opportunities are limited, and trainers are almost non-existent in the emerging green sectors (such as wind turbine installation and efficient building construction). Capacity building among government staff is therefore crucial (OECD, 2013b). To anticipate changes and needs effectively and to enhance co-ordination and coherence, green labor market and skill policies should therefore actively engage partners from the private sector, from organized labor and from local constituencies. The cases included in this chapter provide examples of joint efforts. Table 3 summarizes a number of other programs and initiatives that involve skills development and are implemented jointly by government, private sector and other stakeholders to create green jobs.

Countries are implementing labor market and skill development policies across three main categories: (i) general education, (ii) vocational training, and (iii) re-skilling and up-skilling policies. The measures target worker groups in either new occupations, such as solar technicians, or existing occupations, which need to adapt to changing requirements, such as within the automotive industry and agricultural sector. The re-skilling and up-skilling policies are aimed primarily at mid-career workers in this latter grouping. Case 3 illustrates how a combination of such policy measures is implemented in the Republic of Korea.

Close collaboration between government and private sector – at the enterprise, industry and sector level – is central for effective and efficient labor market and skills development policies. A recent ILO study (ILO, 2011) highlights that it may be appropriate to start at enterprise level. These are the fastest and most effective means of meeting company-specific needs related to changes in production methods, technological requirements or consumption patterns in greening growth. However, these small-scale responses, though cost-effective in the short-term, are rarely coordinated and have rather limited influence on the overall greening of the economy and on the regular skills supply.

At an industry level, considerable progress has been made in improving training programs and certification schemes together with industry skills councils or Chambers of Commerce. The QualiCert standard for a ‘common approach for certification or equivalent qualification of installers of small-scale renewable energy systems in buildings’ is one of these examples (EREC, 2011).
The Government of India has adopted a thematic, sectoral approach to addressing green skill shortages. To promote energy efficiency in buildings, the Indian Green Building Council and the Bureau of Energy Efficiency are conducting training programs and a national certification examination for energy managers and energy auditors respectively. Agricultural training institutes provide skill development courses on plant protection, pest management and locust control. The Indian Council of Agricultural Research has developed training programs in new and emerging areas such as organic farming, which have boosted farm productivity and enabled farmers to secure higher prices for agricultural products (Sanghi and Sharma, 2012). The Indian experience illustrates that well-targeted skills development policies, such as support for marginalized or lower skilled workers, can reduce social inequalities.

 As illustrated in Case 4, in South Africa the government established an accord with business representatives, organized labor, and community groups to promote green jobs creation.


Figure 3:
Labor market and skills development to support green transformation
Case 3: Labor market policies in the Republic of Korea

In the Republic of Korea, promoting green growth is very much a government driven agenda leading to ambitious centrally coordinated efforts. To realize the green job potential, the government has invested in greening education policies for university students as they have been identified as primary target group for skill development and education policy in the green economy transition. The government also provides support for vocational training with industry and youth education and public awareness raising initiatives. Korea faces several challenges, including the lack of a national information infrastructure for anticipating and coordinating green jobs and skills requirements. With many green technologies and innovations scaling up from early stages, the country faces shortages of experts and vocational training teachers for the field. The ILO (2011) recommends that Korea strengthen co-ordination between educational institutions and training facilities and with industry.

Case 4: The Green Economy accord in South Africa

The Green Economy Accord aims to create at least 300,000 green jobs by 2020 with a target of 80 percent of new jobs to go to young workers, who face high levels of unemployment. The Accord agreed between business representatives, labor unions, and government involves 12 commitments, including support for biofuels through regulatory measures and assistance to small farmers; waste recycling; retrofitting buildings; increased use of renewable energy; investment in mass transit; and various green finance facilities (ILO, 2013; and South Africa Government, 2012).