Shota Furuya

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Does electrotech really create jobs, or does it destroy the ones we have?

“Renewables create jobs” is a claim many people find hard to picture. The counter-worries are firmly held too: that EVs will shrink employment in the car industry, that retiring coal plants will take power station jobs with them. The argument about electrotech — the family of electrified technologies covering solar, wind, batteries, electric vehicles and heat pumps, a term Kingsmill Bond and colleagues at Ember put into circulation through a series of analyses — is usually conducted on instinct, with little organised data.

The short answer. (1) Electrotech is an industrial field creating jobs by the million worldwide. IRENA’s latest figures put global renewable energy employment at 16.2 million in 2023, roughly double 2012. (2) Jobs are lost in fossil industries, but the net figure is positive, which is the common conclusion of the major scenarios; the IEA’s 2030 net-zero pathway has a net gain of about 30 million jobs worldwide. (3) Employment is, however, distributed unevenly across regions, skills and wages, so doing nothing widens the gap between the places that win and the places that lose. What follows separates the numbers from the policy questions.

Where the world is: electrotech employment is expanding fast

IRENA’s Renewable Energy and Jobs 2024 edition puts global renewable energy employment at 16.2 million in 2023, about 18% above the 13.7 million of the previous year. By technology, solar leads with 7.2 million, followed by biofuels at 2.7 million, hydro at 2.3 million, wind at about 1.4 million, solar thermal at 800,000 and heat pumps at about 140,000 (IRENA, 2024). By region, China accounts for 7.6 million, about 46% of the total, followed by Brazil, India, the United States, the EU and Southeast Asia.

Counting electrotech more broadly, including EVs, the figures grow further. The IEA’s World Energy Employment 2024 estimates 35 million clean energy jobs worldwide and reported that they had overtaken fossil fuel employment (about 32 million) for the first time. Manufacturing and selling EVs and batteries, renewing grids, installing heat pumps and electric water heaters, retrofitting buildings for efficiency — add them together and more than half of the world’s energy employment now sits on the clean side.

Behind the growth lies the collapse in the cost of solar and batteries. IRENA puts the levelised cost of utility-scale solar about 90% below its 2010 level, at US$0.043/kWh (about ¥6.5/kWh) in 2024. BloombergNEF had the average lithium-ion pack price at US$108/kWh (about ¥16,000/kWh) in December 2024, an eighth of a decade earlier. The virtuous circle — costs fall, deployment grows, and manufacturing, installation and maintenance employment grows with it — has started turning.

The net effect: jobs lost against jobs created

The worry that renewables take fossil work away is a reasonable one. Global coal mining employment is about 20% below 2014, and the IEA estimates that about 2.6 million fossil-related jobs could be lost worldwide by 2030 (IEA, 2024). In Japan, where the phase-out of coal power and the electrification of the car industry proceed together, the effect is not to be dismissed.

What matters, though, is the net figure. Joint estimates from the ILO and IRENA, the IEA’s net-zero scenario and Princeton’s Net-Zero America study all agree that job creation substantially exceeds job loss. Three reasons stand out.

First, labour intensity. Renewables are weighted towards capital projects, construction and installation, and many studies find their employment per unit of investment 1.5 to 3 times that of fossil fuels. Lawrence Berkeley estimates 7.5 jobs per US$1 million invested in solar, 5.5 in wind and 7.7 in efficiency, against 2.7 in coal and 1.4 in gas (Garrett-Peltier, 2017).

Second, domestic content. With fossil fuels, much of the value added leaks abroad through extraction, import and refining. Japan spent about ¥27 trillion on fossil fuel imports in 2023, the combined bill for crude oil, LNG and coal (Agency for Natural Resources and Energy, 2024). Renewables import some equipment, but installation, operation and maintenance stay in the local economy, so a larger share of the same energy spending converts into domestic employment.

Third, the jobs on the electrification side — EVs, heat pumps, building retrofits — are not in the renewable generation statistics at all. In the two years after the United States passed the Inflation Reduction Act, about 400,000 clean energy jobs were announced, most of them in conservative states in the South and Midwest (E2, 2024). The EU’s Net-Zero Industry Act aims at the same spillover.

Adding these together, the IEA’s 2030 net-zero pathway has a net gain of about 30 million clean energy jobs, and the ILO estimates a net gain of 25 million worldwide on the way to carbon neutrality in 2050 (IEA, 2024; ILO, 2018). The intuition that renewables destroy jobs does not survive the data.

The car industry: Japan’s central question

The most contested field in Japan is the electrification of the car industry. On the Japan Automobile Manufacturers Association’s figures, the broad automotive sector including manufacturing and related services employs about 5.54 million people, 8.3% of all employment (JAMA, 2024). An EV has about 30% fewer parts than an internal combustion car, so suppliers of engine, transmission and fuel system components must shrink structurally. METI’s estimates put up to 15–20% of supplier employment at risk of substitution or loss under a rapid transition scenario.

At the same time, employment in the new fields — EVs, batteries, power semiconductors, charging infrastructure, software — is expanding fast. Toyota has planned ¥5 trillion of EV-related investment and about 10,000 new jobs at new battery plants by 2026, and Honda has announced large-scale redeployment to EV-only lines by 2030. BYD in China expanded to over 900,000 employees in 2024, making it the world’s largest automotive employer.

The problem is the speed of the transition and where it lands. Converting employment in Aichi, Shizuoka and Gunma, where engine component makers cluster, is a different proposition from Kyushu and Tohoku, where new battery plants are being built. METI’s green growth strategy and the report of its study group on the future of the car industry stress the need to combine support for supplier conversion, reskilling and regional economic measures — but on the ground, concrete measures have not kept up.

Just transition: making the change fair

Levelling job losses against job creation requires just transition policy. The concept was placed in the Paris Agreement in 2015 and in subsequent COP decisions, and the ILO has developed it as a framework for reconciling climate policy with workers’ rights. It rests on four pillars: (a) reskilling for affected workers, (b) income support through retirement or job change, (c) building alternative industries in affected regions, and (d) participation of workers, employers and communities in the decisions.

The international benchmark is Germany’s coal commission agreement. When the lignite phase-out by 2038 was decided in 2019, €40 billion (about ¥6.5 trillion) of structural transition funding was allocated to the old mining regions of the Ruhr, Lusatia and central Germany, combining renewables, hydrogen and research institutes with early retirement programmes for workers. Spain legislated a just transition strategy in 2018, with just transition agreements for the regions losing mines and coal plants.

In Japan, Yubari in Hokkaido, the Hamadori area of Fukushima and the nuclear-dependent communities of Fukui are the classic cases of structural change. The GX promotion act includes investment in industrial transformation, but direct just-transition measures for individual workers and their communities are thin next to the European versions, and that is a major policy question ahead.

Objections, limits and common misreadings

Several caveats belong here. First, the quality and wages of “renewable jobs”. Solar installation involves a good deal of short-term and seasonal work, sometimes paid below manufacturing or nuclear plant employment. Union density is low in the US renewable sector, which is why the IRA ties tax credits to prevailing wage compliance to lift job quality. Equivalent design is an open question in Japan.

Second, dependence on critical mineral supply chains. EVs and batteries depend on lithium, cobalt, nickel and rare earths, and much of the mining and refining is concentrated in particular countries. The international separation between regions that gain clean jobs and regions that carry the extraction burden is debated as a question of energy justice.

Third, employment intensity changes over time. The early phase of renewables is construction-heavy; once installed capacity is large, operation and maintenance dominate and the employment coefficient falls. Renewable employment does not rise forever; the composition changes as the industry matures, and that should be priced in.

Fourth, statistics are hard to compare. IRENA and the IEA count different things, and methods differ between institutions. Rather than taking any single headline number at face value, it pays to ask what is included and what is not.

Japan’s outlook: what is needed

Japanese renewable employment is on the order of 200,000–300,000 in 2023, putting together ISEP and METI-related statistics. That is an order of magnitude below world leaders (7.6 million in China, 3.5 million in the United States) — an underdeveloped field relative to the potential. Offshore wind, geothermal, batteries, building retrofits and EV charging infrastructure in particular are fields where small local firms and municipalities can be the actors, with the spillover staying in the regional economy.

Continue instead with an economy that imports fossil fuels, and ¥27 trillion a year keeps flowing out while domestic employment fails to shift — a double blow. Investing in electrotech addresses energy security and employment at the same time, and treating the two as separate arguments no longer matches reality.

Summary

  • Global renewable employment reached 16.2 million in 2023 (IRENA), and clean energy employment as a whole 35 million (IEA), overtaking fossil fuels for the first time.
  • Renewables create 1.5–3 times the employment per unit of investment that fossil fuels do, with higher domestic content, so the net employment effect is clearly positive.
  • The IEA’s net-zero scenario has a net gain of about 30 million jobs worldwide by 2030; the ILO has 25 million by 2050.
  • Japan’s car industry (5.54 million) faces structural change from electrification, alongside growth in batteries, charging and software.
  • Just transition policy — reskilling, income support, regional transition budgets — is the key to limiting the gap between winners and losers.
  • Japanese renewable employment, at 200,000–300,000, is underdeveloped potential by international standards.

“Electrotech destroys jobs” is an argument that looks only at the contraction on the fossil side. Taken as a whole, employment rises, stays local, and reduces import dependence — that is what a decade of data shows. The question is no longer whether to make the transition, but how to ensure nobody is left behind while it happens.

References and data sources

International statistics and scenarios

Employment intensity and labour market research

  • Garrett-Peltier, H. (2017). Green versus brown: Comparing the employment impacts of energy efficiency, renewable energy, and fossil fuels using an input-output model. Economic Modelling, 61, 439–447. https://doi.org/10.1016/j.econmod.2016.11.012
  • Larson, E., Greig, C., Jenkins, J., Mayfield, E., Pascale, A., Zhang, C., Drossman, J., Williams, R., Pacala, S., Socolow, R., Baik, E., Birdsey, R., Duke, R., Jones, R., Haley, B., Leslie, E., Paustian, K., & Swan, A. (2021). Net-Zero America: Potential Pathways, Infrastructure, and Impacts. Princeton University. https://netzeroamerica.princeton.edu/
  • E2 (Environmental Entrepreneurs). (2024). Clean Economy Works: 2-Year IRA Anniversary Report. https://e2.org/reports/

The car industry and EVs

Just transition and national frameworks

Japanese statistics and policy

Electrotech

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