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Macroscope | Like the pandemic, climate change fight will drive global shifts in jobs and investment
- The fight against global warming will drive reallocation as job types and investment patterns are expected to change worldwide
- Obstacles to this continue to be political will, the permitting process for innovative technologies, technology limitations and infrastructure
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The global economy has been beleaguered by runaway inflation, but that is now easing and should continue to do so. Central banks are committed to bringing inflation back nearer to target levels and are likely to succeed within a year to 18 months.
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Moving forward, we will need to be watchful of the labour market and the potential overheating of wages. This moves very slowly but can build to be a significant pressure over time.
The Covid-19 pandemic has had major implications for the organisation of firms and cities, and there will be a significant amount of reallocation. It has forced people to think about the status of work in their life.
But the fight against global warming will equally drive reallocation, too. Job types will change, for example the move to electric vehicles (EVs) will mean a reallocation of workforce in the automotive sector. There will also be huge increases in investment in the green transition with both public and private contributions.
The pandemic plus the disruptions to global energy markets have encouraged huge increases in lower carbon activity in Asia. Chinese manufacturing and purchases of electric cars is a good example, as is the rapid extension of renewable energy production. According to a recent article in the Financial Times, China accounted for almost two-thirds of global electric car sales in 2022.
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The implication is that the EV sector will create more jobs. It will require supply chains to adapt to providing components for this boom in production, as well as for the infrastructure needed in cities and on the national highway system to allow electric vehicles to become the predominant mode of private transport. In India, electric motorcycle sales are booming, creating new jobs around manufacturing, distribution and servicing.
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China’s largest shipment of electric vehicles sets sail from Shanghai port
China’s largest shipment of electric vehicles sets sail from Shanghai port
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