Green transition and impacts on industrial labor demand

In the 2015 Paris agreement, countries have committed to drastically reduce greenhouse gas emissions and adapt society in response to climate change.

The green transition will influence the working conditions on many labor markets with potentially different impact on specific sectors and regions. The changes bring opportunities and challenges; some jobs disappear, new ones are created.

To succeed with the green transition, society needs to assess the effects on employment in the sectors significant to the transition, for example, the industrial manufacturing sector.

Predictions that look at the professions expected to increase and decrease in response to policy directed at enabling the green transition is crucial for the preparations to support initiatives for firms and individuals impacted by the undergoing transition process.We analyze the effects of the green transition on industrial labor markets, with a special attention to those industries that are most affected by environmental policy.

Using state-of-the-art econometric methods and a unique firm-level data from Sweden, we address several policy-relevant questions: i) How does the demand for labor respond to the effect of environmental policies on the price of energy and on the cost of capital? ii) How does the demand for labor respond to firms’ emission abatement efforts? iii) How does technical change/efficiency and changes in input and output composition induced by transitional efforts contribute to the labor demand response?Addressing these questions will provide new knowledge on the interactions between environmental policy and the green transitions of the labor market, thus improve the design of future environmental policies and regulations.

The results generated by this project are urgently needed since very few relevant results have been generated outside the US on how industrial sectors are affected by policy aimed at the transition to a greener and more sustainable society.