Energy transition and shipping skills development
As more investors and companies seek greater clarity and confidence in accounting for long-term climate risks and opportunities, businesses are adapting to the "energy transition" — a transformation of the global energy sector from fossil-based systems of energy production and consumption to renewable energy sources. Switching from nonrenewable energy sources like oil, natural gas, and coal to renewable energy is made possible by technological advancements and a societal push toward sustainability. As 2022 comes to a close, the energy transition seems more disorderly than ever. A world economy shaken by a global pandemic and the surging inflation that has accompanied the subsequent recovery has had to contend with a tragic conflict in Ukraine and its aftermath of human suffering, rising energy costs, and declining energy security. As we look forward to 2023 and COP28, the dual imperatives of ensuring energy resilience and affordability and of reducing emissions appear equally inescapable. Instead of delaying action, we believe these imperatives emphasize the importance of accelerating coordinated long-term action, at the same time as taking short-term measures.
Moving towards a low-emission global economy will create tens of millions of new ‘green jobs’ across sectors including shipping. The renewable energy industry alone is projected to generate 38.2 million jobs by 2030. The effects of the green transition on employment are also requiring workforces across multiple sectors to reskill and upskill. This, coupled with new technologies, such as artificial intelligence (AI) and digitalization, is leading to increased calls for investment in skills to ensure a thriving future workforce in 2030 and beyond. Shipping’s green transition is no different. Currently accounting for 3% of global greenhouse gas (GHG) emissions, shipping’s decarbonization is expected to bring with it green job creation opportunities across new value chains, with 87% of the infrastructure projected to be land-based. The International Energy Agency forecasts the world’s total renewable-based power capacity to increase 50% between 2019 and 2024. In response to this shift, utilities have begun a rapid energy transition away from coal. While some market observers expect that transition to slow, pressure is mounting on power generators to retire existing assets that depend on coal supplies and build out other forms of power generation.
Although federal subsidies for wind and solar energy are set to expire, the demand for renewable energy, driven primarily by corporations’ large-scale renewable energy purchases, will likely remain high. Despite growth in renewable energy, the use of fossil fuels is also expanding to meet growing demand for energy. Global energy demand grew by 14 percent from 2011 to 2022, fueled mainly by emissions-intensive sources. Governments from the world over are set to meet once again at the United Nations’ shipping arm, the International Maritime Organization (IMO). Here they’ll debate and adopt a revised GHG Strategy – a document that likely commits the world to a more ambitious target for cutting shipping’s carbon and other climate change-producing emissions. Industry organizations and many member states are calling for total zero emissions by 2050 with strengthened 2030 and 2040 targets to align to the 1.5ºC of the Paris Agreement, reinforced at COP27 in Sharm-el-Sheikh. While responsibilities for climate change policies often rest solely with a country’s environmental ministry, ensuring a successful and just transition to a green economy which leaves no one behind must involve multiple governmental departments – from labour and education to energy and trade.
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