Targeted labor market policies needed for increasing labor demand through CO2 reduction measures

An additional 23,000 to 28,000 workers are needed to meet the climate goals. However, the labor supply of people with relevant technical qualifications is low. If no action is taken, this supply will increasingly decline further. A targeted labor market policy is needed to make sufficient labor supply available. These are some findings from our research into the employment effects of CO2 reduction measures, commissioned by the Dutch Sustainable Energy Association (NVDE).

The study we conducted provides insight into the employment effects of two scenarios. The first scenario involves an additional package of measures leading to a 49% CO2 reduction in 2030, as agreed in the Climate Agreement. The second scenario involves an additional package of measures leading to a 55% CO2 reduction in 2030, the new overall EU target. We also make recommendations for optimizing the relevant labor supply.

Labor demand
The additional measure packages create a labor demand of 23,000 to 28,000 workers. These jobs are in addition to existing job growth from current policies based on the Climate and Energy Outlook (KEV), which realizes a 34% CO2 reduction by 2030. An important note is that jobs are also lost due to the additional measure packages. These are not included in the figures. This is therefore not net, but gross job creation.

Labor supply
Against this growing demand for personnel, there is a tight labor supply. Especially for people with technical vocational training, the labor market is tight, and it will only get tighter. The number of MBO students in engineering is expected to decrease by about 25,000 between 2020 and 2030.

Targeted policy
In order to steer the labor market transition in the right direction, the government must therefore pursue a targeted labor market policy. Particular attention needs to be paid to retraining and retraining people from other sectors who are losing their jobs due to the corona crisis or as a result of climate policy. Employers must also clarify their labor demand and educational institutions must provide the necessary training(s). Government agencies such as the UWV must facilitate the matching of supply and demand. This requires a guiding and coordinating role of the government.

For more information, read the full research report (in Dutch).