Policy Research Reports
Potential Employment Generation Capacity of Renewable Energy in MENA
No.
PRR 47
Publisher
ERF
Date
May, 2024
The Middle East and North Africa (MENA) region, globally renowned for its vast reserves of fossil fuels, is undergoing a significant paradigm shift towards embracing renewable and green energy sources. This transition is not only driven by environmental objectives but also by the recognition of the substantial employment and economic diversification opportunities inherent to renewable energy solutions. The MENA region, with its abundant solar radiation and wind resources, is poised to leverage these natural assets to propel its economy into a greener and more sustainable future.
This study provides a comprehensive analysis of the employment impacts, societal challenges, and economic opportunities associated with the adoption of renewable energy technologies. The study particularly focuses on the variety of benefits, barriers and the complexities inherent to the transition to renewable energy in the six target countries—Egypt, Jordan, Lebanon, Morocco, Sudan, and Tunisia.
The adoption of renewable energy technologies, such as solar power, wind energy, biomass, green hydrogen, and hydropower, catalyzes the emergence of new industries and job opportunities across the MENA region. With its abundant solar and wind resources, the region is primed to capitalize on renewable energy projects, thereby fostering employment growth in sectors ranging from engineering, manufacturing, construction, to project management. The construction, installation, and maintenance of renewable energy infrastructure requires a skilled workforce, offering added direct employment opportunities and stimulating ancillary industries.
Investments in green energy initiatives have historically stimulated research and development (R&D) activities, driving innovation and technological advancements. The MENA region is witnessing a similar trend, with governments and private entities increasingly investing in clean energy R&D. This influx of investment not only creates job opportunities for scientists, engineers, and technicians but also promotes knowledge transfer and enhances the region's technical expertise, positioning it as a hub for renewable energy innovation.
The production and installation of renewable energy equipment, such as solar panels and wind turbines, also necessitates the development of a robust local supply chain and manufacturing capabilities. By supporting the production of renewable energy components within the region, MENA countries can reduce dependence on imports and gain a competitive advantage in the global green energy equipment market. This, in turn, will lead to job creation in manufacturing, assembly, logistics, and related support services. Moreover, the rapid expansion potential of Electric Vehicles (EVs) manufacturing presents additional employment opportunities, with several MENA countries already making progress in this direction.
Transitioning to renewable energy is complemented by promoting energy efficiency measures and retrofitting existing infrastructure for improved energy performance. This too can generate employment opportunities in the MENA region. As countries seek to optimize energy consumption and mitigate greenhouse gas emissions, the demand for professionals specializing in energy-efficient solutions such as, energy audits, building retrofits, and energy management can be expected to rise. This creates opportunities in several new industries involved in the production and installation of energy-efficient equipment, fostering job growth and sustainability.
Governments, MSMEs and educational institutions in the MENA region can and should play a pivotal role in providing training programs and vocational courses focused on renewable energy technologies. By equipping individuals with the necessary skills, the region can enhance its human capital, fostering employment opportunities and sustainable development in the green and renewable energy sector.
An added opportunity that is unique to renewable energy given that it is less transportable than fossil fuels, is the opportunity to attract energy intensive industries to agglomerate near the sources of renewable energy. This agglomeration effect augurs well for creating manufacturing hubs that generate substantial employment.. This clustering effect promotes economic diversification, job creation, and industrial growth, laying the foundation for a sustainable, diversified and resilient economy.
The structure of the report is designed to provide a comprehensive understanding of the potential employment impacts of renewable energy in the MENA region. It begins with an introductory section, setting out the overarching objectives and scope of the study. Then the report transitions into an in-depth analysis of the energy supply and demand dynamics in the MENA region, with a particular focus on the six selected countries. Each country-specific section provides an exploration of its energy landscape, highlighting past trends, present dynamics, and future projections. The report ventures into a broader discourse on the transition to green and renewable energy, delineating the importance for MENA economies to capitalize on the green transition. It presents the complex relationship between renewable energy adoption, job creation, job quality, and job distribution, underscoring the transformative potential of renewable energy for economic rebasing and social transformation. Through a synthesis of theoretical frameworks and analytical models, the report navigates the complexities of estimating the employment impacts of renewable energy, offering insights into alternative approaches and methodological considerations. Moreover, the report embarks on an exploration of emerging paradigms in renewable energy, such as the economic potential and impacts of EVs and green hydrogen.
The conclusion is devoted to provide a synthesis of key findings and recommendations emphasizing its role in economic diversification, job creation, reduced carbon footprint and inclusive growth.
Transitioning to renewable energy aligns with global trends and offers possible solutions challenging regional problems such as the high regional unemployment rates, particularly among youth and women. By strategically investing in renewable energy infrastructure, fostering innovation, and promoting skills development, the MENA region can unlock the potential promoting prosperity, sustainability, resilience and inclusivity. The transition to renewable energy represents not only an opportunity to mitigate climate risks but also a pathway towards a more equitable and prosperous future for the peoples of the region.
Research Fellows
Atif Kubursi
Professor, McMaster University
Research Fellows
Hala Abou-Ali
Professor of Economics, Faculty of Economics and...