As global labour markets go green, Latin American and the Caribbean (LAC) countries could seize a unique opportunity. LAC countries house abundant renewable resources for sustainable energy – ecosystems that absorb carbon and a dynamic workforce to power change.
The green transition is set to generate up to 15 million net jobs in the LAC region by 2030. The OECD estimates employment in green sectors in the region could grow by 15% by 2030 relative to a baseline if countries implement high-impact green policies. Job creation, however, will not be even across LAC’s cities and regions. The share of green jobs is already 11% in the Central region of Costa Rica, and 7% in the Santiago metropolitan area in Chile, according to upcoming IDB research.
Across OECD countries, green jobs tend to concentrate in urban areas. In Colombia, municipalities account for over 26% of investment in climate adaptation and mitigation projects, driving greater skills needs in certain areas.
Green jobs tied to LAC’s primary sectors are also set to grow in sectors with a strong presence in rural areas. In a scenario in which LAC countries meet COP emission targets, by 2030, jobs in sectors such as agriculture and plant-based foods and renewable electricity are set to grow by 54% and 22% respectively.
Investments in nature-based solutions and biodiversity protection efforts across LAC will also drive new occupational needs. In total, an estimated 13% of workers in LAC could be part of the green economy, according to IDB estimates for green-task jobs in 11 countries.
Meanwhile other jobs are at risk. Employment in fossil-fuel electricity generation is expected to fall by half by 2030. Rising temperatures and extreme weather events also threaten jobs, with coastal areas at risk of flooding, agriculture at risk of drought and all areas at risk of lower productivity and more hazardous working conditions. Meanwhile, the degradation of natural resources threatens jobs in LAC’s raw material-intensive sectors such as farming, fishing and forestry, which rely heavily on ecosystem services.
Left unchecked, these trends threaten to widen existing inequalities. In LAC countries, green jobs are concentrated among men (74.9%) aged 25 to 49 years (63.1%) living in urban areas (83.5%). More than 80% of workers in non-green jobs similar to green jobs in LAC will have to make three or more transitions to move into a green job, requiring new adult learning tracks. This contrasts with the U.S., where 8 out of 10 workers in non-green jobs can transition directly to a green job, although this transition is rare for those in carbon-intensive jobs.
Due to spatial differences in the locations of green and non-green jobs, green career shifts may also require workers to commute, relocate or leverage remote work options.
Resetting LAC skills
To maximise the positive impacts of this transition, LAC needs to get on the front foot.
First, LAC governments need to align environmental and labour market policies to address skills mismatches and shortages during the green transition. Effective collaboration across ministries responsible for environmental policies and those responsible for skills and labour market policies ensures regulations and incentive schemes are designed considering skills availability and labour market implications. In 2022, Costa Rica created a High-Level Committee on the Just Transition, bringing together the Ministry for Environment and Energy, the Ministry of Labour and other public bodies. The committee identifies sectoral focus areas for just transition policies, including ways to strategically align training programmes.
The private sector also has a role to play in developing green skills programming. Investing in green skills is essential to maximising job creation from green sectoral development. For example, as part of an Inter-American Development Bank (IDB) project in Chile, business actors in Green Hydrogen (GH2) projects in Antofagasta and Magallanes developed a human capital roadmap. As part of the roadmap, a High-Level Coordination Roundtable brings together public and private stakeholders to align industry needs with workforce development.
Second, LAC policy makers require timely and accurate local labour-market information on the impact of environmental policies on current and future skills supply and demand. Skills adaptation requires disaggregated, region-specific data to help workers adjust career paths and training decisions, and firms to adapt investment decisions and production processes. In Belize, the Chamber of Commerce and Industry, with the support from IDB, prepared a skills road map including regional data combining quantitative and qualitative insights to identify job creation potential and skills needs as businesses develop more sustainable tourism activity.
Third, vocational education and training (VET) institutions in LAC can develop training honed to the greening needs of Small and Medium-sized Enterprises (SME) with limited resources to train. In the province of Manabí, Ecuador, the Spanish Agency for International Cooperation (AECID), the Ministry for Urban Development and Housing (MiDUVi) and other actors support a Workshop School (Escuela Taller) programme which provides training for sustainable bamboo construction, a strategic sector for sustainable development in Manabí. Workshop School graduates are well placed to enter community- or cooperative-based building activity, including within indigenous communities.
LAC bursting with talent
National governments in the LAC region need to work across ministries and with their territories, social partners and vocational education systems to develop workforce policies that foster an inclusive green transition. Many countries are already adopting far-sighted policies to turn climate challenges into opportunities. But all are now in a race against time to tap into that talent before fossil fuels are phased out.
Want to learn more about workforce development trends in Latin America and the Caribbean? Watch “Workforce development and local green investments: A focus on Latin America and the Caribbean”, a joint IDB-OECD session hosted during OECD Local Skills Week 2024.
