Job creation and deep decarbonization

Kelly Sims and Soyoung Oh

Oxford Review of Economic Policy, 2023, vol. 39, issue 4, 765-778

Abstract: This paper explores whether economic viability is the key to achieve deep decarbonization or net zero emissions. The hypothesis tested is that popular support for decarbonization policies is conditional upon most people’s belief that their economic well-being will improve, or at least not suffer with these policies. While GDP growth is the typical metric for economic health, a more useful socio-economic indicator for gauging the political viability of climate policies may be job creation. Specifically, the paper reviews the existing evidence about whether climate policies are more successful in achieving deep decarbonization in the long run if policy-makers include job creation as well as emissions reductions when designing and implementing climate policies, because, to date, climate policy-makers have often focused on emissions reductions as the primary criterion for policy choice. While empirical evidence remains thin, we find that job creation in low-carbon industries appears to lead to greater political support for the climate policies that contribute to decarbonization, but employment factors are not always the most salient factor in a voter’s decision. We also find empirical evidence that clean energy deployment policies, such as feed-in tariffs, have led to significant net gains in employment in the countries that have been studied. The review points to several policy implications, including the need to assess competitive advantage, develop plans, design and execute industrial policy, and develop a low-carbon workforce.

Keywords: decarbonization; job creation; climate policy; just transition (search for similar items in EconPapers)
Date: 2023
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