Shift to a low carbon economy could create millions of jobs but risks widening global divides

The shift to a low carbon economy is expected to reshape labour markets across the world over the next five years, with almost 14.4 million jobs set to be affected by 2030, according to a new report from the World Economic Forum. The research suggests that while 2.4 million roles will be phased out, the emergence of new industries and technologies will generate around 12 million new positions, resulting in a net gain of 9.6 million jobs. Yet the report warns that the scale of disruption, combined with persistent economic and geopolitical pressures, could deepen existing inequalities both within and between countries.

The Making the Green Transition Work for People and for the Economy report was developed in collaboration with McKinsey and Company and published ahead of COP30, where governments are placing increased emphasis on the social and economic implications of climate policy. The study argues that although more than four in five business leaders expect the transition to have a positive economic impact overall, uneven access to finance, rising energy costs and growing regulatory demands are creating new competitive pressures. Without more targeted intervention, these challenges are likely to fall hardest on lower income countries, smaller businesses and communities already facing economic strain.

Attilio Di Battista, Head of Economic Growth and Transformation at the World Economic Forum, said the findings underline the need for climate strategies that take account of local conditions and the realities of different labour markets. He said that effective climate action depends on recognising the socioeconomic differences between countries and communities, and that businesses and governments have a shared responsibility to adapt their plans accordingly so that the transition supports wider human development.

One of the report’s central themes is that businesses are struggling to balance the ambitions of the green transition with the immediate demands of economic competitiveness. More than a third of companies globally say that rising energy and commodity costs are already making it harder to compete, a figure that rises to nearly half in low income economies. Many firms expect these cost increases to be passed on to consumers, raising concerns about the affordability of essential goods and services. Half of businesses across all regions say they worry that the transition will contribute to greater financial pressure on households at a time when living costs are already elevated.

The research also finds significant disparities in access to finance. A third of companies say that limited investment capacity is holding back their ability to compete in emerging green industries, while almost half of firms in low income economies report similar barriers. Executives across all income levels express concern that unequal access to green finance could leave some sectors or regions unable to keep pace, widening the gap between economies that can fund decarbonisation and those that cannot.

The rapid expansion of green technologies is also creating new forms of inequality. Businesses in lower middle and low income countries face greater obstacles in securing access to green technologies, supply chains for sustainable products and workers with the necessary skills. More than one in five companies in these economies say they lack access to the technologies required to meet emerging climate standards. By contrast, companies in higher income economies report greater challenges around regulatory uncertainty, growing compliance burdens and the complexity of adapting existing business models at speed.

Concerns about labour market disruption are widespread. One in three businesses worldwide say they expect job displacement in at least one major industry in their country. Even where the transition is expected to lead to job growth overall, significant changes in the types of skills required will place pressure on employers and workers. The report notes that countries with strong social protection systems and long term investment in education and healthcare tend to express fewer concerns about the labour impacts of the transition, suggesting that broader socioeconomic resilience plays a key role in securing public support.

The Forum’s analysis groups countries into six broad archetypes that reflect their structural strengths and vulnerabilities. These range from advanced economies with established social systems and strong service sectors to low income nations facing acute challenges around financing, skills and affordability. Advanced economies such as Australia, France and the UK are described as inclusive green adopters, early movers in green technology but increasingly concerned about rising energy costs and regulatory pressures. Industrial powerhouses such as China, Germany, Japan, South Korea and the US are labelled green developers, benefiting from deep financial markets but grappling with volatile supply chains and access to critical materials.

Manufacturing economies such as Italy and Türkiye are described as emerging green adopters, where businesses are more cautious about the potential economic benefits of the transition. Rapidly industrialising nations including Brazil, India, Mexico and South Africa face the additional challenge of balancing green investment with the need to ensure affordable access to energy. Fossil fuel dependent economies such as Saudi Arabia confront the long term challenge of diversifying away from hydrocarbons while developing the skills base required for new sectors. Meanwhile, frontier economies such as Bangladesh, Nigeria and Pakistan face the greatest barriers, including limited access to finance, technology and skilled labour, and require international support to align climate and development goals.

The report argues that businesses have an important role to play in managing the socioeconomic consequences of the transition. By considering the impact of climate plans on workers, communities and consumers, employers can help reduce inequalities and support more sustainable growth. Hemant Ahlawat, Senior Partner and Co leader of McKinsey Sustainability, said that organisations will need a clearer view of how their strategies affect people and that companies which embed social and economic considerations into their climate planning will be better positioned to achieve inclusive growth.

The findings will inform work under the Forum’s Equitable Transition Initiative and will guide country level action through its Accelerators Network. The authors emphasise that the transition offers significant economic potential but warn that without proactive efforts to address emerging inequalities, the benefits of a greener economy may not be shared evenly. They conclude that businesses and governments must act with greater urgency to ensure the transition works not only for the climate but also for the people and economies most affected by the profound changes it will bring.