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The green collar revolution

How the net-zero economy will shape the workforce of the future

New Zealand’s recent labour shortage has brought into sharp focus the need to carefully look ahead and plan for future workforce needs. An appropriately skilled workforce will also be at the heart of transitioning to a net-zero carbon economy and unlocking the enormous economic opportunity it represents.

Our report, Aotearoa New Zealand’s Turning Point, shows decisive action by New Zealand and the world on climate change represents an enormous economic opportunity for New Zealand. Aside from GDP impacts, our report also considered how a net-zero transition and climate change could affect employment or jobs. Our economic modelling shows 40,000 additional jobs could be created by 2050.

But that is only if New Zealand decarbonises at pace and scale to prevent a potential of nearly 3,000 job losses by 2050 caused by inadequate climate action. More than 12,000 jobs are vulnerable to climate change and economic transition impacts by 2070. The estimated job losses are conservative and do not take into account impacts such as individual natural disasters and extreme events, water availability and ocean acidification.

Reaching net-zero emissions will fundamentally change New Zealand’s economy. It will involve hard shifts in policy, energy systems and consumer behaviour. These shifts will contribute to a decline of emissions-intensive industries and associated jobs as new technologies and emerging industries develop to disrupt that activity. This will have flow-on impacts for our workforce. But transition does not mean the people, or their skills, will disappear. In fact, workers and their skills will be vital to achieving net-zero and delivering on the expected job creation.

Yes, rapid decarbonisation is expected to result in a shift away from emissions-intensive jobs. As New Zealand’s economy decarbonises, it could see a shift away from workforce needs in sectors such as the fossil energy sectors. Jobs are likely to be disrupted or there will be no job to return to, as reduced demand for fossil fuel energy has the expected flow on-impact on the demand for labour in this sector.

However, we see the rise of the ‘green collar’ workforce across three categories:

Rapid decarbonisation with decisive action, is expected to create new “net-zero” jobs

As new technology and processes are adopted during the transition to net-zero, new net-zero jobs will emerge. For example, the emergence of a fuel cell engineer as the hydrogen industry grows, hydrogen technicians, including engineering and maintenance, as well as more general supply chain support services, including making parts, assembly, construction, refurbishment, and recycling. These jobs are beginning to emerge but are yet to be formally recognised by most economies.

Rapid decarbonisation with decisive action, is expected to transform existing roles

Roles with tasks typically tied to emissions-intensive activities are expected to transform with rapid decarbonisation. An example of this is how mechanics will need to learn how to service electric vehicles instead of internal combustion-powered vehicles. This transformation of tasks will require workers to learn new skills. For many of these occupations, this upskilling can be done on the job or through a short course. As the skill requirements of these roles transform, the education and training sector will need to be responsive so new graduates have the skills in demand by the industry.

Rapid decarbonisation with decisive action, is expected to grow demand for existing jobs

The impact of decarbonisation is not expected to fundamentally change the requirements of workers in these roles but increase the overall demand for jobs with these skills. Examples include areas of the economy that directly benefit from expanding renewable energy, such as construction and services sectors. An expanding renewable energy sector will result in more construction and the need for more designing, planning and management services to build renewable energy plant and equipment. This will result in growing demand for a large cohort of occupations. Many of these jobs already exist in the economy, such as project managers, some engineers, laborers, scientific services, and trade workers.

New Zealand will need a unique pathway to achieve net-zero by 2050. Carefully constructed and adaptive workforce policies will be crucial. New Zealand policymakers have committed to a “Just Transition” to a low-carbon economy – one that is fair, equitable and inclusive. Through the Just Transition framework, the Government is seeking to work in partnership with iwi, communities, regions and sectors to manage the impacts and maximise the opportunities of the changes brought about by the transitioning to a low emissions economy.

Whilst the ‘Just Transition’ policy is a step in the right direction, more efforts are required to guarantee New Zealand’s lower carbon future. Possible actions can include:

  • Developing tailored policies from a systems perspective. First, collaboration and coordination across central government, industry bodies, specific firms, research, and workforce development councils to collectively design, fund, and deliver on a defined economic outcome in relation to decarbonisation. For example, consideration and tailored policies should be adopted in a systems view of what the energy, mobility, manufacturing, agriculture, and land use systems look like by 2050. Consideration of needs to change today to ensure the workforce can deliver growth in these systems is also important.
  • Identifying investment in areas of demand that deliver both decarbonisation and job creation to ensure a successful transition. For example, the Government can set “open door” challenges to industry to develop proposals that look to transform systems and investments to support emissions reduction and the workforce.
  • Identifying transitioning occupations, i.e., those roles most exposed under a scenario of decisive action (emissions-intensive jobs), those that will be in greatest demand as the economy decarbonises, and those requiring upskilling or creation.
  • Emphasising the change required for upskilling and retaining. The education and training sector will need to evolve in line with the decarbonisation of our economy. We will need targeted education and training systems for upskilling and retraining disrupted workers, traditionally disadvantaged communities, and new students to facilitate pathways into high-growth sectors with in-demand skills. This may include course modifications, developing new courses and alternative modes of delivery.
  • Providing transition assistance, targeted at specific cohorts in the economy, to reallocate workers, to upskill workers or to address workers who are underutilised. Active transition assistance can target improved economic, workforce, and skilling outcomes targeting specific cohorts in the economy.

Implementing these actions provide an opportunity to enable equitable outcomes in the New Zealand workforce. It is crucial workers, households, businesses, Māori, Pasifika, and regional communities are supported through this period of transition. In doing so, New Zealand can ensure it has the appropriate skills and workforce to achieve net-zero, which is essential to unlocking the potential 40,000 job dividend by 2050 as well as ensuring the cost of transition for workers is minimised.

  1. Ministry of Business, Innovation & Employment, Economic Development, Just Transition Policy. 15 November 2021 - Just Transition | Ministry of Business, Innovation & Employment (

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