Decarbonisation and labour markets
2 August 2021
The debate on the labour market effects of climate policies has been always highly polarized with advocates on both sides ignoring or exaggerating the effects. Advocates of carbon pricing and a green recovery tend to stress the creation of high-paying “green jobs”, while critics point to the job losses in energy-intensive industries exposed to international competition. The existing literature finds that the net effect of climate policies on employment is small,
especially when general equilibrium and offsetting effects are considered. However, job losses are concentrated in polluting industries, raising concerns about the political acceptability of climate policies in regions highly dependent on those industries. This policy brief assesses which types of workers and skills will be mostly affected by the creative destruction induced by climate policies.
INNOPATHS is a European Union Horizon 2020 research project running from 2016-2021, led by UCL, looking at the innovation required for large-scale reductions in greenhouse gas reductions in Europe and the rest of the world. It has published nine policy briefs on different aspects of its work, on Innovation; Power generation; Industry; Buildings; Transport; Finance; Labour markets; Biochar; and Decarbonisation Pathways.
- Visit the INNOPATHS website, where you can access all the publications from the project (the Deliverables and abstracts of over 50 journal papers).
- Read the other INNOPATHS policy briefs