THE transition to the green agenda needs to be done gradually as rapid changes can potentially bring negative spillover effects such as job losses, Finance Minister Tengku Zafrul Abdul Aziz said.

He said as many companies strive to achieve their green agenda, the transition somewhat poses a threat to businesses and livelihoods, particularly in Asean countries.

Citing an International Labour Organization report, he said Southeast Asia could potentially lose about 500,000 jobs in the fossil fuel sector by 2050, but it could gain around five million jobs, mainly in the renewable energy sector.

“Job losses due to the shift to a green economy as well as indirect job losses related to the industry will have a significant negative impact on labour markets,” he said at The Cooler Earth Sustainability Summit 2022 in Kuala Lumpur today.

Tengku Zafrul was speaking at a ministerial panel titled “Accelerating Climate Action and Justice” during the summit, alongside his Indonesian counterpart, Sri Mulyani Indrawati.

He cited national oil and gas company Petronas and utility giant Tenaga Nasional Bhd (TNB) as examples for their green agenda initiatives.

He said Petronas employs close to 50,000 workers all over the world where most are involved in upstream and downstream oil and gas businesses.

“Transitioning or changing their business model entirely to solar hydrogen, for example, without any gradual approach, will displace a large number of workers,” he said. 

“And this does not include their full ecosystem; there are 4,000 vendors and suppliers, which of course employ their own workers… this will no doubt lead to a negative spillover impact over the economy and the local communities which they are based in, and of course, the industries as well.”

TNB, which employs about 40,000 workers and has around 3,200 vendors that are involved in the power generation business, has so far been gradually converting about 50% of its power generation that uses coal, he said.

Therefore, he said to mitigate the negative impact of the phasing out of coal and hydrocarbons, governments must implement a just transition policy for the affected population. 

“So there is a need to keep jobs in areas where coal production or hydrocarbon are concentrated, and it is critical to conduct dialogue among governments, workers and employers at all levels of policy development to ensure social protection, green recovery and skills redevelopment,” he said.

“This can be addressed, for example, through the reskilling of workers and reducing the risks for a stranded workforce as we shift to the green economy and then demonstrating a fundamental commitment to human rights by identifying and managing (such) risks.” – Bernama, September 20, 2022.