Project 1c – Green Growth and employment in advanced economies 

Project staff: Alex Bowen

Work under this heading is focusing on (i) understanding the relative importance of structural shifts across industries and decarbonisation within industries for aggregate emissions and changes in employment, and (ii) green jobs and skills.

Structural change and decarbonisation

Decomposing a country’s aggregate carbon emissions into its sectors’ carbon intensity and share in GDP, and aggregate GDP yields valuable insights. Using a cross-country panel, counterfactual emissions scenarios can be constructed under different assumptions about these components. Comparing observed and projected scenario emissions, it is shown that both changes in economic structure and in carbon intensity have typically been climate-friendly, but some counterexamples are evident. Sectors with high carbon intensity (HCI) produced a smaller share of GDP and a larger share of emissions than those with low carbon intensity. The large differences in the intensity of a given HCI or LCI sector across countries have been documented. Moreover, a sector’s carbon intensity and its share in employment have been shown to be inversely related. Value-added, employment, capital stock and multifactor productivity grow faster in LCI sectors. The growth rates of multifactor productivity in both HCI and LCI sectors are greater in developing countries.

Outputs: A draft working paper is being circulated for comments.  Interest has been shown by the IMF among others.

Green jobs and skills

To achieve a green economy, policy-makers have to manage the transition to green economy and promote green growth.  One of the crucial elements of an assessment of the transition to the green economy is to examine the effects of environmental policies on labour markets. But for the green economy, it is also critical that people have `right skills`. Are `green` skills specific to green jobs, or do `green skills` reflect the type of job to which these skills are applied? The similarity of skills used in green and non-green jobs is important, particularly in the context of re-training programmes. In the paper “Characterising Green Employment: The impacts of ‘greening’ on workforce composition”, we use the US O*NET database and supplementary files to examine the potential impacts of the `greening` of the US economy on work-force composition in terms of sectoral employment and the use of green tasks and skills at the occupation level.

Regarding the transition from ‘green rival’ to ‘green’ occupations, we use O*NET’s supplemental files containing information on ‘career starters’ (jobs with similar skills/experience so workers can transfer to these occupations with minimal additional preparation), and ‘career changers’ (jobs with similar general capabilities/interests) for some green occupations.  We have also utilized the database’s detailed information on job requirements e.g. education, and have done simple network analysis to evaluate how easy it is to transition from a green rival occupation to a green occupation. Based on our analysis, we draw out the implications for the cost of training programmes (which skills are portable and can be reused in expanding jobs), which is important for policy-making.

Outputs: A draft working paper is to be circulated for comments.  Policy briefs published last year on green jobs and how to use carbon revenues are related to this strand of work.