Photo by Sigmund on Unsplash

By: Filda Citra Yusgiantoro, Vivi Fitriyanti

A pressing need to assess human capital readiness in the energy transition is a priority. Human capital is considered intangible capital that can become a country’s competitive advantage. The concept of human capital explains that people are a vital asset that can contribute to the rapid progress of development in a country.

Under an ambitious energy transition, a 2018 International Labor Organization (ILO) study concluded that decarbonization could lead to a net positive impact on employment at the global level.

Changes in energy production and use to achieve net-zero emissions can create around 18 million jobs worldwide by shifting to renewable energy and efficiency in various sectors. This net job growth is predicted to result in the creation of some 24 million new jobs and the loss of around 6 million jobs by 2030.

According to a report from the International Monetary Fund, the projected population for the Southeast Asian region in 2023 makes up 8.09 percent of the global population, which equates to 680 million individuals. In the ASEAN region, Indonesia has the largest population, with around 277 million people, or about 40.8 percent of the total population in the region.

On the one hand, Indonesia’s National Energy General Plan (RUEN) is also predicted to create more than 1 million jobs in 2050 due to the transition. This includes 99,603 workers in geothermal, 44,641 in hydropower, 125,280 in bioenergy, 826,440 in solar, 166,848 in wind and 57,623 in other renewable-energy sectors​.

On the other hand, jobs in carbon-dependent sectors, like fossil fuels, mining, construction, heavy industries and traditional car manufacturing, might face challenges due to rapid regulations, financial instability or intense competition, potentially leading to layoffs or industry relocation.

Approximately 1 million workers are at risk of job losses due to the decline of the coal sector. The current policy has not adequately accommodated such things and is in urgent need of further reform to make the energy transition just and with no one left behind.

According to the ILO, it presents a threat to the world of work, as jobs may be vulnerable to local environmental risks that have the potential to destroy ecosystems and communities, with decreases in agricultural incomes and rural jobs due to changing weather patterns, increased risk of heat stress and health risks due to rising temperatures and damage to the marine ecosystem threatening the fisheries sector. Measures to mitigate the risk to employment due to climate impacts also need to be considered for the transition to a green economy.

Comprehensive strategies and plans should be developed to facilitate this transition. It is crucial to identify specific areas where human capital can be developed. We suggest six recommendations that can be applied to prepare the readiness of human capital for the energy transition.

First, the need for labor-protection measures should be optimized. While there have been positive developments in social-protection programs, including the recent implementation of unemployment benefits, the overall program still needs to be improved to provide enough cushion for affected workers and communities in a time of major transition. This protection involves providing training and skills-development programs to equip individuals with the necessary expertise in the renewable energy field.

Second, higher education institutions (HEIs) must mainstream energy-transition issues into the curriculum and research innovation. Such initiatives should be collaborative and trans-disciplinary in nature. Hence, an urgent change in the structure of faculties in universities needs to be made. Indonesia can learn from universities in other countries where they have transformed their courses to respond to the energy transition, i.e., green chemistry, energy and the environment, sustainable energy engineering and energy economics, where there are multi-faculty and industrial collaboration in the courses.

Third, there is also a lot that the private sector could contribute. It could provide more internship programs and facilitate and create green job opportunities for students at university to participate in real-world problems, especially climate change and energy problems in their supply chains. They can apply problem-based learning to students’ thesis projects.

Fourth, an internship program in solar photovoltaic installation like Gerilya from the Energy and Mineral Resources Ministry must be appreciated. However, the program should also include more opportunities for social science students, as this gives more exposure to all students from all backgrounds and interests.

Fifth, the process should be inclusive and leave no one behind. While addressing the human capital gap in the national curriculum and learning outcomes, the government must ensure equal distribution of infrastructure and education access.

Lastly, a tripartite social dialogue process is anchored in the legislative system and serves as an effective mechanism to maintain good industrial relationships and to handle disputes concerning employment issues.

Informality, skills gaps and enterprises’ readiness to respond to transition must be well addressed and carefully planned to seize the momentum and mitigate the socioeconomic risks arising from the transition.

The opinion has been published on The Jakarta Post.
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