The effect of climate policies on labour market

The reduction of CO2 emissions and a transition to an energy-efficient economy has become a priority in many developed countries. When discussing climate policies, a key issue is whether such policies will lead to stagnation or to the creation of green jobs and growth. Many economies have already been plagued by the so-called jobless growth and concerns about the future impact of new technologies on employment are rising. Identifying forces determining labour market outcomes upon implementation of climate policies is therefore crucial.

The main objective of this research project is to better understand the impact of climate policies, in particular environmental taxes, on unemployment and wages. The novel feature which we propose is accounting for adjustment of technology choices induced by taxes. We will study how climate policy could motivate firms to select more energy-saving production methods and how this switch could influence employment of workers. Furthermore, we will separately analyse the effect on workers with a graduate degree and on non-graduate workers.

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This project has received funding from the National Science Centre.