Climate goals need people: the regional talent crunch slowing the green transition

The OECD warns that the green transition will stall unless regions can attract and retain the workers needed for new clean industries, as labour shortages are already delaying climate projects across most regions. Jobs alone are not enough: regions must invest in housing, services, connectivity and quality of life to compete for talent and turn climate ambition into lasting growth.

A new OECD paper produced by the Organisation for Economic Co-operation and Development’s Centre for Entrepreneurship, SMEs, Regions and Cities, with research led by its Regional Attractiveness and Migrant Integration Unit and support from the European Commission’s Directorate-General for Regional and Urban Policy, delivers a clear warning: climate ambition will falter if regions cannot find the people to deliver it. Across OECD countries, the push to decarbonise energy, transport, buildings and industry is creating strong demand for workers with green skills. Yet in almost nine out of ten regions, vacancies in green-task jobs already exceed the available workforce. These jobs range from engineers and technicians to construction workers and planners, and shortages are now delaying projects that are critical for meeting climate targets.

Why regions are struggling to hire

The problem is not just about skills; it is also about demography and geography. Many regions, especially rural and industrial ones, are ageing, losing population and shrinking their working-age labour force. At the same time, these places often host renewable energy plants, clean manufacturing sites or major infrastructure projects at the heart of the green transition. Training local workers is essential, particularly for those leaving carbon-intensive sectors, but training systems are already stretched and many green occupations require years of specialised education. As a result, regions increasingly need to attract workers from elsewhere and persuade them to stay.

Jobs alone are not enough

The OECD’s research shows that people rarely move for jobs alone. Affordable housing, fast internet, reliable transport, access to schools and healthcare, environmental quality and overall quality of life often matter just as much. Regions that struggle with housing shortages or weak connectivity may fail to attract talent even when jobs are available. To address this, the OECD encourages regions to assess their strengths and weaknesses using tools such as the Regional Attractiveness Compass, which looks beyond employment to the wider conditions that shape where people choose to live. Understanding how places are perceived by young people, families and international workers is just as important as analysing statistics.

A practical roadmap for regions

To help regions respond, the OECD paper proposes a clear policy roadmap. It starts with a better diagnosis of green labour needs using real-time labour market data and close cooperation with employers and training providers. This allows regions to anticipate shortages rather than react too late. The next step is improving coordination. Talent attraction cuts across housing, transport, education, migration and economic development, often involving multiple levels of government. Regions that build partnerships between industry and education, cooperate across municipalities and, where relevant, across borders, are better able to offer a coherent package to workers.

Implementation then requires a balance between short-term solutions and long-term investment. Welcome desks, relocation advisers and support for partners’ employment can quickly reduce the barriers to moving. But without sustained investment in affordable housing, transport infrastructure, broadband and public services, these measures will not lead to lasting settlement. Many regions are also investing in territorial branding, presenting themselves as places where people can build meaningful careers while contributing to climate action.

Making attraction fair and sustainable

The OECD stresses that attracting talent can create trade-offs. Inflows of workers can push up housing prices or strain public services, and benefits may not be evenly shared. This makes monitoring and evaluation essential. By tracking outcomes such as retention rates, labour shortages and housing affordability, regions can adjust policies and maintain public trust. Evidence also helps justify public spending and secure continued support from national governments and international funders.

The final challenge is capacity. Many regions lack the staff, data skills and institutional strength needed to design and deliver effective talent strategies. Targeted capacity-building, peer learning and technical assistance can make a decisive difference, particularly for smaller and rural regions.

The OECD’s message is simple but powerful. Capital and technology matter, but people are the binding constraint of the green transition. Regions that invest early in becoming attractive places to live and work will be better positioned to turn climate goals into durable economic and social gains. Those who do not risk watching green opportunities slip away, not because they lack ambition, but because they lack workers.