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Jobs and skills in the transition to a net-zero economy: A foresight exercise

There is a growing consensus on the benefits of transitioning to a net-zero economy beyond simply controlling global temperature rises. These are often referred to as co-benefits, and a significant one is job creation. Jobs are created through a net-zero transition as a result of changes in technologies and demand, modes of production, macroeconomic conditions, and international trade.

While the transition’s overall impact on jobs is expected to be positive, it will be spread unevenly across sectors. This report led by the Smart Prosperity Institute and supported by the Diversity Institute and the Future Skills Centre uses innovative foresight tools to explore different scenarios and the implications for employers.

Two construction workers in hardhats installing a solar panel for the net-zero economy

Key Findings

Decarbonization has little impact on employment in the majority of sectors. The growth of fully 75% of jobs in the economy is not directly affected by these decarbonization scenarios because they are in sectors that are neither energy-intensive nor GHG-intensive (e.g., retail, finance, healthcare, education, and services).

Non-technical skills are as important as, if not more important than, technical skills in a net-zero green transition. Even where technical skills like operations monitoring and quality control are necessary, the score for importance of non-technical skills is higher. This does not render technical skills inconsequential, but underscores the importance of broad-based skills profiles needed for jobs in a decarbonized future. In fact, technical skills combine with non-technical skills to form “green literacy,” which is essential for the workforce in a low-carbon future.

Workers across provinces have different skills development needs as they transition. Those in resource-dependent regions are particularly vulnerable to this transition as resource jobs are likely to decline in all the three decarbonization pathways modelled for this analysis. However, these losses would be offset through job growth in other sectors, implying that one way to support these workers would be to provide skills training that allows workers from the oil and gas sectors to transition to greener occupations.

The business case for a decarbonized economy rests on the successful transition of workers from jobs expected to disappear to those that will emerge and grow. The questions that follow have to do with how these changing jobs across sectors will affect the demand for skills and how policy-makers should respond by creating skills policy that enables clean and resilient growth across a range of net-zero emissions futures.

To answer these questions, this report presents a foresight exercise that models the jobs and skills that would be required in a net-zero economy across a set of distinct futures. There are many ways that Canada could reach net-zero emissions. In this report, we consider three:

  • A lower-carbon-intensity pathway with high rates of fuel switching in favour of end-use electrification
  • A higher-carbon-intensity pathway that relies less on fuel switching and more on carbon capture or direct air capture (DAC) technologies
  • A middle-ground that contains elements of both and a greater reliance on carbon offsets

While all three pathways take us to a net- zero emissions goal by 2050, the key features varying across these scenarios are the stringency of greenhouse gas (GHG) emissions reduction policies, market conditions, and technology parameters.

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