Winner takes all? Understanding the impact of energy transition on employment under the constraint of China’s carbon peak target

Abstract

Achieving carbon peak and carbon neutrality requires not only reducing emissions but also managing the macroeconomic side effects of the energy transition. This study examines employment reallocation as a carbon transition management problem rather than as a conventional labor market performance issue. We develop an integrated multi-regional input-output (MRIO) and multi-objective optimization model to simulate how China’s carbon peak constrained energy transition reshapes formal labor demand across 42 sectors and 31 provinces. The novelty of this study lies in linking a theoretical mechanism of capital biased energy transition with a detailed interregional production network, thereby identifying where the social costs of decarbonization are likely to concentrate. Our results show that although the transition increases aggregate employment, it generates a clear “winner takes all” pattern. Employment gains are captured mainly by economically developed coastal regions and high value added service and power related sectors, while less developed inland and resource dependent regions face severe losses. Shanxi, a typical coal dependent province, could lose nearly 10% of formal employment opportunities, and job growth in renewables is insufficient to fully offset losses in traditional fossil fuel and power industries. These findings provide policy relevant evidence for carbon management by showing that carbon peak pathways must be evaluated not only by emission outcomes but also by their spatial and sectoral employment risks.