New Zealand markets open in 4 hours 59 minutes
  • NZX 50

    11,617.14
    +6.15 (+0.05%)
     
  • NZD/USD

    0.6374
    +0.0021 (+0.33%)
     
  • ALL ORDS

    7,369.40
    -53.80 (-0.72%)
     
  • OIL

    71.98
    -0.03 (-0.04%)
     
  • GOLD

    1,802.10
    +4.10 (+0.23%)
     

Climate change: These jobs are set to boom amid the green transition

With the urgency of combating climate change increasing each year, more companies and governments are prioritizing renewable energy sources.

In 2021, 18 million people worked in the energy sector globally, an industry that is projected to grow to 26 million by 2050. Although 9.5 million jobs could potentially be lost in the transition to greener energy, the process won’t create mass unemployment, according to a study published in the One Earth journal. Instead, it will create an additional 17.4 million jobs in renewable energy.

“The biggest increase we see is in manufacturing renewables equipment like wind turbines, solar PV panels, etc., and installation and maintenance of these technologies,” Dr. Johannes Emmerling, a scientist at the European Institute on Economics and the Environment, told Yahoo Finance. (He was co-author of the study.)

The main reason why is due to the "much more granular technology" that will require large quantities of materials, space, and maintenance "per GW [gigawatt] of capacity installed," he said, adding that those jobs could outnumber those lost by a factor of 2-3.

Texas added approximately 4,000 oil field service jobs in April, but throughout the country employment around the oil sector remains below pre-pandemic levels. (Photo by Brandon Bell/Getty Images)
Texas added approximately 4,000 oil field service jobs in April, but throughout the country employment around the oil sector remains below pre-pandemic levels. (Photo by Brandon Bell/Getty Images)

Clean energy jobs

The Biden administration has touted job creation as a central goal of the energy transition in the U.S. Executive actions announced this year include building more wind farms, increasing electric vehicle (EV) manufacturing, purchasing clean construction materials, and incentivizing innovative agricultural practices.

As of 2021, jobs in net-zero emissions-aligned areas made up approximately 40% of total energy jobs, the Department of Energy stated in an annual report. And these areas are expected to grow even more rapidly in the coming decades.

According to the Bureau of Labor Statistics, wind turbine service technicians make up the second-fastest growing occupation in the U.S. behind nurse practitioners with a 44% growth rate projected in the next decade.

Wind turbine technicians earned a median salary of $56,260 in 2021, and the typical job required a certificate but no college degree. The states with the highest employment of wind turbine technicians are Texas, California, and Oklahoma.

Solar photovoltaic installers were also cited as one of the fastest-growing jobs in America. This job typically requires a high school diploma and pays $47,670 a year. California, Texas, and Arizona are the states with the most solar PV installers.

Other occupations have also gained momentum. For instance, automakers retooling and building plants for electric vehicles have promised job creation on the other side of their investment.

Fossil fuel reliance

Despite a potential job boom on the horizon, the energy transition is still in the early stages.

About 81% of the primary energy sources in the U.S. are fossil fuels like oil, coal, and gas — and America relies heavily on them. After China, the U.S. consumes the most fossil fuels annually.

The U.S. is also the top producer of fossil fuel-based energy production overall, accounting for 20% of the world's total energy production from hydrocarbons.

According to the Energy Information Administration (EIA), just 24% of the national electricity generation in the first half of this year came from renewable sources.

Yet, the fossil fuel industry has been on the decline since 2014. For instance, jobs in the mining industry fell at an annual rate of 3.5% from 2011 to 2021, and it is projected that the annual growth rate will only increase by 1.2% by 2031.

About 50 coal mining companies have filed for bankruptcy over the past decade at a time when China has broadened its production of natural gas, plus imports, according to the EIA.

Overall, jobs tied to fossil fuel extraction fell by 12% in 2021, even as production increased.

Rural America's role

According to Emmerling's analysis, 40% of the lost jobs can be easily moved to renewable energy jobs with fewer restraints. But experts say implementation is key, especially in the rural areas that are producing and supplying energy.

While the transition will be a net gain for jobs, it could still create sizable disruptions in some communities. Emmerling agreed that one of the biggest challenges in the green transition would be local pushback.

“While there is no master plan, fiscal and social policies to assist affected workers, considering and encouraging relocation, [and] providing compensation including to local policymakers and constituencies for the economic loss is vital to ensure a just and feasible transition in these areas,” he said.

In other words, a smooth transition won't just entail job creation but ensuring that tax dollars are invested back into the communities supplying the nation's energy. That hasn't always been the case historically.

Employees with Ipsun Solar install solar panels on the roof of the Peace Lutheran Church in Alexandria, Virginia on May 17, 2021. (Photo by Andrew CABALLERO-REYNOLDS/AFP)
Employees with Ipsun Solar install solar panels on the roof of the Peace Lutheran Church in Alexandria, Virginia on May 17, 2021. (Photo by Andrew CABALLERO-REYNOLDS/AFP)

A recent report from the Center for American Progress (CAP) found that between 2011 and 2020, the federal government collected on average $10 billion each year from extraction contracts with oil and gas companies on public land and water, but only $2 billion went back to the states where the extraction plant is located.

“Communities will resist the transition away from fossil fuels if drilling continues to be the only revenue available to support their schools, infrastructure, and other essential services,” the report stated.

The authors proposed that using taxes and royalties from coal mining and oil companies could aid in building and improving the infrastructure of these rural regions — such as schools and roads — so that the communities will be more receptive to alternative sources of revenue.

"This policy framework will give communities the resources to plan for the future and the revenue to maintain essential services," the CAP report stated. "It will also remove a major barrier to climate action, as these communities will not be left behind in a transition to a clean energy future."

Grace O'Donnell contributed to this report.

Tanya is a data reporter at Yahoo Finance. Follow her on Twitter.

Click here for the latest economic news and economic indicators to help you in your investing decisions

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube