Hi, I’m Eve. Proponents of the Green New Deal tout the great jobs that will be created by the energy transition. They overlook the job losses, or simply assume that these workers will be able to move into new roles. The post below suggests that this may not be the case, given the differences in skills. And the “just train them” solution has not been very successful.
Article by Orsetta Causa, Senior Economist, OECD, Maxime Nguyen, Consultant, OECD and Emilia Soldani, Economist, OECD. Originally published in Vox EU
Greening the economy will be accompanied by a shrinking of polluting jobs. This column presents a new OECD study using labour force data for a large European country. The study suggests that green and polluting jobs are unequally distributed across socio-economic groups. Green jobs are associated with higher education, polluting jobs with lower education, and women are underrepresented in both green and polluting jobs. Minimizing transition costs – targeted policies that promote reskilling and match workers with in-demand jobs – will be crucial to accelerate decarbonization while mitigating the turnover penalties for affected workers.
Greening the economy refers to the transition to more sustainable and environmentally friendly practices across a range of sectors (Pisu et al. 2022). This can have significant implications on labour market outcomes and inequalities, including job creation and transformation, skills demand and training, and regional disparities. While the impact on total employment is likely to be relatively small, the combination of policies and technological innovations required to bring about decarbonization will require a reallocation of production factors, which could have distributional effects and widen inequalities.
One lesson from the impacts of globalization/technological change is that moderate aggregate effects, or even aggregate gains, can result in concentrated losses for certain groups of workers and their communities, especially if the changes occur rapidly (Ottaviano et al. 2021). Preventing this in a green transition requires understanding labor market dynamics and crafting appropriate policy responses. Such policies will improve worker allocation and deployability, for example, to perform green tasks, as well as work to manage and minimize scarring effects associated with job losses in polluting industries. Understanding and addressing the distributional impacts of climate policies is also essential for political acceptability (Stantcheva et al. 2022).
In this column, building on our two recent papers (Causa et al. 2024a, 2024b), we present new evidence and stylized facts on the incidence of green and high-polluting jobs in selected European countries, their geographic distribution, and their incidence among different categories of workers. Identifying the characteristics of affected workers provides insights into how public policies can support them and deliver a just transition to a low-emission economy.
A new empirical framework for studying the labour market impacts of the green transition
The starting point is a new empirical framework for studying the labor market impacts of the green transition, which contributes to the literature and debate along the following aspects: (1) a cross-country comparative perspective, (2) the use of individual/worker-level data, and (3) a detailed empirical analysis.Most of the empirical literature in this field focuses on single countries, especially the United States, due to the availability of high-quality, readily available data, or on cross-country aggregate data.
The analysis is based on well-established measurement approaches for identifying “green” and “highly polluting” jobs, in particular the US-based O*NET (2010). This framework is developed and reviewed to make it applicable to harmonized European Labour Force Survey data. To overcome limitations in applying US-based metrics, this paper proposes a new approach for identifying “highly polluting” jobs, based on European emissions data by country and industry. The main advantage of relying on country-specific data on emissions is that it allows capturing cross-country heterogeneity in emissions intensity by industry. The analysis shows that these differences can be quite large. For example, for electricity, gas, steam and air conditioning supply activities, the most polluting countries emit four times more GHG per worker than the least polluting countries.
Stylized facts about green and polluting jobs
The Big Picture
Based on a newly developed empirical approach, Figure 1 shows the estimated shares of green jobs and highly polluting jobs in European countries for the period 2011 to 2019. Key highlights include:
- The estimated share of green jobs averages 8% across the countries considered: The incidence of green jobs varies from around 10% in the UK and Estonia to 5% in Greece.
- The share of highly polluting jobs is estimated to be around 4% on average across the countries considered, ranging from around 9% in the Czech Republic and the Slovak Republic to 2% in Austria and Portugal.
- Over the past decade, labour markets have not become significantly greener on average across the European countries surveyed: there has been no significant change in the share of green and polluting jobs, and some countries have actually seen an increase in the incidence of polluting jobs.
Figure 1 Green jobs and high-polluting jobs in European countries, 2011-2019
Percentage of total employees (%)
A) Green Jobs
B) highly polluting jobs
