Why a Green Transition Is a Local Labour-Market Problem

The green transition changes the setting in which occupational polarization unfolds. This chapter focuses on the gap between national employment statistics and the local labour markets where workers actually seek their next job. The key judgment is that a vulnerable occupation is not automatically a disappearing job, a green occupation is not automatically an accessible destination, and a vacancy somewhere in the economy is not necessarily an option for a worker whose entry pipeline has narrowed in a particular place.

The distinction matters because emissions, industries, occupations, skills, vacancies, and workers are distributed unevenly. A country can have a small national share of employment in carbon-intensive activity while a single region depends heavily on a plant or sector exposed to the transition. At the same time, new green-task work can grow in other regions or require a wider set of skills. The result is not one national queue for green jobs. It is a set of local opportunity systems with different starting points and different bottlenecks.

A small national exposure can be a large regional shock

The OECD paper begins by separating national employment from local concentration. In the European Union in 2019, four sectors with the highest carbon dioxide emissions accounted for almost 61% of overall CO2 emissions but employed only 1.4% of the total workforce. In the United States, about 1% of workers were employed in fossil-fuel-related industries. Those figures can make the labour-market effect appear small when averaged across a country.

The local picture is different. High-emission manufacturing is often organised around large, tradable plants, so employment is concentrated in particular regions. In some European regions, the combined employment share of several high-emission manufacturing sectors reaches 11%; in others it is as low as 2.5%. A national average treats those regions as observations in one distribution. A worker in the more exposed region experiences the transition as a change in the main local employer base, not as a small adjustment spread across millions of jobs.

The same logic applies to occupational polarization. If the jobs that historically supplied entry, training, and progression are concentrated in a local industry, the loss of that industry's demand can change the pipeline into routine or production work even when national employment remains stable. Workers may not be displaced immediately. Firms can alter tasks, reduce hiring, or recruit for a new skill bundle. The entry margin can shift before the stock of incumbents visibly collapses.

The OECD's classification of occupations vulnerable to the green transition is designed to identify this exposure, not to predict that every job in the group will vanish. Vulnerable occupations are associated with high-emission industries and occupational concentration within those industries, with occupations containing green tasks excluded from the classification. The regional share of vulnerable employment can reach 27%, compared with a European regional average of about 14%. Between 2011 and 2024, the average national share fell by 1.2 percentage points across European countries, but some countries, including the United Kingdom, saw the share rise.

“Vulnerable” therefore means that the occupation is exposed to a transition in its sectoral environment. The job may disappear, but it may also be transformed.