How shifting investment towards low-carbon sectors impacts employment: three determinants under scrutiny

Quentin Perrier () and Philippe Quirion

No 2018.13, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: The threat of climate change requires investment to be rapidly shifted from fossil fuels towards low-carbon sectors, and this shift generates heated debates about its impact on employment. Although many employment studies exist, the economic mechanisms at play remain unclear. Using stylized CGE and IO models, we identify and discuss three channels of job creation resulting from an investment shift: positive employment impacts arising from targeting sectors with a high labour share in value added, low wages and low import rates. Results are robust across both models, except for the last, which only occurs in IO. We then undertake a numerical analysis of two policies: solar panel installation and weatherproofing. These investments both yield a positive effect on employment, a result which is robust across models, due to a high labour share and low wages in these sectors. The results are roughly similar in IO and CGE for solar; for weatherproofing, the results are higher in IO because of low import rates, by a factor ranging from 1.19 to 1.87. Our conclusions challenge the idea that renewable energies boost employment by reducing imports, but they also suggest that an employment double dividend might exist when encouraging low-carbon labour-intensive sectors.

Keywords: Renewable energies; Investment; Employment; CGE; Input-Output (search for similar items in EconPapers)
JEL-codes: C67 C68 E24 Q42 Q43 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2018-10
New Economics Papers: this item is included in nep-agr, nep-cmp, nep-env and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (18)

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http://faere.fr/pub/WorkingPapers/Perrier_Quirion_FAERE_WP2018.13.pdf First version, 2018 (application/pdf)

Related works:
Journal Article: How shifting investment towards low-carbon sectors impacts employment: Three determinants under scrutiny (2018)
Working Paper: How shifting investment towards low-carbon sectors impacts employment: three determinants under scrutiny (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2018.13

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