What do we know about the employment impacts of climate policies? A review of the ex post literature

Abstract

Concern around the employment impacts of climate mitigation policies can be a contentious and politized issue, with potentially limiting implications for climate action. It persists despite a significant ex ante literature that suggests that aggregate effects will most likely be limited and net positive. This review analyses 60 papers assessing the employment impacts of climate policies ex post, in 20 countries and 2 country groups. Eight broad mitigation policies are covered: (1) emissions trading, (2) carbon taxes, (3) feed‐in tariffs, renewable energy (4) procurement and (5) deployment, (6) green economy/jobs, (7) environmental regulation, and (8) other policies and regulations. The analysis confirms that employment impacts tend to be modest and net positive or neutral, but reveals that distributional outcomes can be uneven, disadvantaging certain groups and at times reinforcing existing inequalities. Additionally, lower quality jobs or weak labor market regulations may decrease the attractiveness of jobs created or increase job transition costs. These findings provide some justification for increased focus on how climate policies can ensure a “just transition of the workforce and the creation of decent work and quality jobs” stipulated in the Paris Agreement, but also suggest that climate action should not be delayed for fear of widespread negative employment impacts. Ex post assessments offer an important lens into the determinants of climate policy employment outcomes and should be advanced and harnessed in support of accelerated and just action.