Greening the economy to safeguard growth and employment

During COP30, one truth became clear: the cost of inaction is measured not only in degrees of warming, but in lost growth and rising unemployment.

Policymakers are increasingly recognizing that postponing climate action is not just an environmental risk—it is also a macroeconomic one. The Network of Central Banks and Supervisors for Greening the Financial System (NGFS) warns that delaying the transition could substantially dampen global output and raise unemployment, undermining the very stability and prosperity monetary and fiscal authorities aim to preserve.

The latest NGFS modelling suggests that if climate policies are postponed, global GDP in 2030 could fall by 1.2 per cent relative to a baseline scenario, while unemployment could rise by 1.3 percentage points, as a result of extreme weather events and associated supply chain disruptions. That translates into an additional 50 million women and men out of work.

These figures are not abstract projections; they represent livelihoods lost, communities strained, and fiscal systems tested.

Furthermore, the burden would continue to fall unevenly. Developing economies, already grappling with weak decent job creation and limited fiscal capacity, would continue to bear the heaviest blows. Climate inaction, thus, threatens to widen global inequalities, weakening both economic resilience and social cohesion. [1] For economies whose central banks also carry a full-employment mandate, the implications are particularly stark. [2] Concerted climate action is no longer peripheral to macroeconomic policy—it is central to safeguarding price stability, jobs and growth.

Climate inaction, thus, threatens to widen global inequalities, weakening both economic resilience and social cohesion.

This is not to say that scaling up climate action will be free of disruption. The transition will bring significant shifts in labour markets, requiring investments in green job creation, more effective active labour market policies, expanded reskilling and upskilling, and stronger and better-financed social protection systems to cushion adjustment costs. If well-designed and suitably financed, these policies can turn the climate transition into a driver of sustained economic and employment growth, innovation and inclusion.

*The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of ILO.

Kee Beom Kim is the Macroeconomic and Employment Policies Specialist at the Employment Policy, Job Creation and Livelihoods Department of the International Labour Office (ILO), based in Geneva, Switzerland. During his twenty year tenure at the ILO, he was also based in Bangkok and Jakarta. His work focuses on undertaking research on key macroeconomic and employment issues and on providing technical support in the design and implementation of economic, employment and labour market policies.