How does the green transition impact the Nordic labour markets?
The green transition is already taking place and it impacts the Nordic countries and regions in several different ways as we will see in the following sections.
Most definitions of the green transition refer to a transformation or shift to a low-carbon economy, while most definitions of a just green transition focus on the socioeconomic aspects and impacts of the transition to a low-carbon economy and a more sustainable society.
The concept of a just transition goes back to the 20th century labour movement in the US. It was later incorporated into the outcome of the Rio+20 Earth Summit 2012 and referred to in the preamble to the Paris Agreement 2015:
“Taking into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities.”
The ILO-UNEP report 2008 concluded that the green transition is a structural change expected to result in new jobs as well as greening of jobs, but also potential job losses in some economic sectors and regions (ILO, 2023). That was followed by an ILO resolution in 2013 focusing on sustainable development, decent work and green jobs and guidelines for a just transition in 2015.
The ILO resolution on a just transition adopted in 2023 states:
“A just transition promotes environmentally sustainable economies in a way that is inclusive, by creating decent work opportunities, reducing inequality and by leaving no one behind. (...) Just transition involves maximizing the social and economic opportunities of climate and environmental action, including an enabling environment for sustainable enterprises, while minimizing and carefully managing challenges. It should be based on effective social dialogue, respect for fundamental principles and rights at work, and be in accordance with international labour standards. Stakeholder engagement is also important.”
In research, the green transition is described as a multi-dimensional sociotechnical change involving markets, infrastructure and technology, with institutional, cultural, social, behavioural and spatial aspects. Sociotechnical transitions are often not linear or incremental, which makes their trajectories hard to predict. A just green transition can be analysed according to different understandings of justice, such as distributive, recognitional, procedural or cosmopolitan justice. (Cedergren et al. 2022).
Varying emission trends in the Nordic countries
Although the Nordic countries face many similar challenges with regard to reducing CO2 emissions, for example in terms of transport and consumption, there are also differences due to the diverse economic structures and energy mixes in the respective Nordic countries. Furthermore, the differences in industry profiles between the Nordic regions and municipalities make them vulnerable to green transition and climate mitigation policies to varying degrees.
- The Swedish Climate Policy Council (Klimatpolitiska rådet)
- The Danish Council on Climate Change (Klimarådet)
- The Finnish Climate Change Panel (Suomen Ilmastopaneeli)
- The 2050 Climate Change Committee in Norway (Klimautvalget 2050)
- The Icelandic Climate Council (Loftslagsráð)
– track climate change developments and countries’ progress towards attaining the goals under the Paris Agreement and the national climate goals.
Sectors
■ Waste management
■ Other fuel combustion sectors n.e.c.
■ Other fuel combustion sectors
■ International navigation (memo item)
■ International aviation (memo item)
■ Industrial processes and product use
■ Fuels, fugitive emissions
■ Fuel combustion in transport
■ Fuel combustion in manufacturing industries and construction
■ Fuel combustion in energy industries
■ Agriculture
Source: Eurostat env_air_gge:
Greenhouse gas emissions by source sector (source: EEA)
Greenhouse gas emissions by source sector (source: EEA)
The green transition and digitalisation – a twin transition
The green transition and digitalisation have sometimes been described as a twin transition (European Commission, 2020). Depending on their industry mix, some regions and municipalities are more impacted than others by automation, digitalisation and the green transition.
Map 1. Share of jobs at “high risk“ of automation
High employment rate, strong gender balance and skills shortage
The employment rate in the Nordic Region is high, although it has varied over time depending on shocks and economic cycles. The Nordic model and welfare systems are based on high labour market participation.
A large majority live in areas with above 80% employment in the working-age population. The number of people in employment in the Nordic Region has increased and has never been higher. The Nordic countries have a more gender-balanced labour market than the EU average, although the Nordic labour market is still gender-segregated. After the pandemic, a strong demand for labour in all of Europe has led to a skills shortage in many industry sectors.
Map 2. Employment rate 2022
Figure 1. Total number of employed (15-74) by quarter.
Note: Index: 100=Q21995
GL: Index: 100=2008
EU27: Index: 100=Q1 2000
Data sources: Eurostat & NSIs
Note: Index: 100=Q21995
GL: Index: 100=2008
EU27: Index: 100=Q1 2000
Data sources: Eurostat & NSIs
Figure 2. Employment rate by gender 2021 (November).
Data source: Nordic Statistics. Åland: ÅSUB
Data source: Nordic Statistics. Åland: ÅSUB
Green and polluting jobs in the Nordic countries
The European Union Green Deal is expected to result in 2.5 million new jobs in 2030 (Cedefop 2022). The green transition is widely supported by governments, business organisations and trade unions. The impacts of the green transition in terms of new jobs and job losses may, however, differ between different industries, countries and regions.
One way to understand the impact of the green transition is to distinguish between green jobs, white jobs and brown jobs. The vast majority of the jobs in the European Union are considered "white jobs", i.e. jobs which will see only moderate changes in tasks related to the greening of jobs. “Green jobs” include more tasks related to the green transition and are expected to grow, and “brown jobs” belong to the major polluting industry sectors (Vandeplas et al. 2022).
The Organisation for Economic Cooperation and Development (OECD) uses a similar terminology, namely “green-task jobs” and “polluting jobs” (OECD, 2023). Less than a fifth of the workforce in the OECD holds a green-tasked job, while in the Nordic countries, the corresponding figure ranges from 22% in Iceland to 27% in Sweden. Some regions are impacted by both green jobs and brown jobs. For example, in the north of Sweden, thousands of new green jobs are being created at the same time as the region has many brown jobs, some of which will also be turned into green ones.
Map 3. Share of green-tasked jobs 2021
Map 4: Share of polluting jobs 2021
Perceptions of the impacts of the green transition on the labour market
To understand how people are impacted by climate change and the green transition, many surveys have been conducted, including a Nordic survey in 2022 with more than 5000 respondents from the Nordic countries and territories (Tapia et al, 2023).
Will the green transition entail job losses?
A total of 71% of the respondents in the Nordic survey agree that climate change is a serious or very serious problem. 27% worry that some jobs in their country or region may be at risk due to the green transition.
Respondents in Greenland (39%), Norway (36%) and Finland (34%) are more likely to be worried or very worried about the risk of potential job losses. Women are less likely to be worried about potential job losses than men (23% vs. 31%), as are people under the age of 30 (46%), people in larger cities (22% compared to 31% in rural areas) and respondents with a university education (47% compared to those with primary (31%) and secondary (37%) education).
To what extent do you agree or disagree with the following statement: I am worried that some jobs in <country, region> may be at risk due to the transition to a low-carbon economy (%)
Will the green transition lead to new jobs?
31% of the Nordic population think that initiatives to combat climate change will help create new jobs in their area. However, 35% do not think that climate initiatives will have a positive impact on the labour market. Men are more likely to disagree that such initiatives will help create jobs than women (39% and 30%).
To what extent do you agree or disagree with the following statement: Initiatives to fight climate change will help create new jobs in the area where I live (%)
■ 5 Fully agree
■ 4
■ 3
■ 2
■ 1 Fully disagree
■ Don't know / No answer
Will the green transition improve the quality of work?
The population in the Nordic Region holds divided opinions about how climate policies will affect working conditions, with respondents from Greenland being the most optimistic and those from Norway and Finland being the most pessimistic. While 24% believe that climate initiatives will have positive effects on working conditions, over a third (34%) do not believe that working conditions will improve. Those who live in cities are more likely to expect climate-positive effects compared to those in rural areas (28% and 19%) and men are a little less likely to expect improvements than women (23% and 26%).
To what extent do you agree or disagree with the following statement: Initiatives to fight climate change will improve working conditions in the area where I live (%)
Further surveys have been conducted, such as the Eurobarometer on Climate change (2023), according to which 77% of Europeans think climate change is a very serious problem, while 37% maintain that they are exposed to environmental and climate-related risks and threats. There are also examples of surveys from the Nordic countries, such as the Central Organisation of Finnish Trade Unions (SAK), which involved their member trade unions in studies of how the green transition impacts the labour market and working life. Another example is the Danish Confederation of Trade Unions, which created its own Climate Panel representing 10 different sectors and trade unions and whose final report “Green transition together” included eight recommendations for a greener future and workplace involvement.