Does climate action destroy jobs? An assessment of the employment implications of the 2‐degree goal

AuthorMoana SIMAS, Kirsten S. WIEBE, Marek HARSDORFF, Richard WOOD, Guillermo MONTT, Antoine BONNET
Publication Date01 Dec 2018
International Labour Review, Vol. 157 (2018), No. 4
Copyright © The authors 2018
Journal compilation © International Labour Organization 2018
* International Labour Organization, emails:;; bonneta **
Norwegian University of Science and Technology, emails: kirsten.s.wiebe@ntnu.
no;; The authors are grateful to two reviewers
and the editorial team for their valuable comments and suggestions. The authors declare no com-
peting interests.
Responsibility for opinions expressed in signed articles rests solely with their authors, and
publication does not constitute an endorsement by the ILO.
Does climate action destroy jobs?
An assessment of the employment
implications of the 2-degree goal
Guillermo MONTT,* Kirsten S. WIEBE,** Marek HARSDORFF,*
Moana SIMAS,** Antoine BONNET* and Richard WOOD**
Abstract. The Paris Agreement lays out the objective of keeping global warming
below 2 °C. The goal can be achieved by increasing both the share of renewables
in the energy mix and energy efciency. Such action entails a transformation of the
energy sector, which, given its linkages with the rest of the economy, will have a
knock-on effect on other sectors. Using scenarios based on a multiregional input–
output database, this article explores the economy-wide and worldwide employ-
ment impact of such a transition. Findings suggest that by 2030 most economies
will experience net job creation and reallocation across industries. Job creation is
driven by the construction, manufacturing and renewables sectors.
Climate change is one of the dening challenges of our age. There is
scientic consensus on the reality of humanity’s interference in the
Earth’s atmosphere, which has led to an unprecedented increase in the Earth’s
average surface temperature and a change in the climate system (IPCC, 2013
and 2014a; Steffen, Broadgate et al., 2015; Steffen, Richardson et al., 2015).
The Intergovernmental Panel on Climate Change (IPCC) highlights the many,
mostly negative, effects of climate change on the environment, societies and the
economy; and it has been suggested that the burden of these effects will fall
mostly on vulnerable countries and population groups (ILO, 2018; IPCC, 2014a
and 2018). The Paris Agreement, as part of the United Nations Framework
Convention on Climate Change (UNFCCC), has been ratied by more than
180 countries. It calls for aggressive action to keep the rise in global tempera-
tures from pre-industrial levels below 2 degrees Celsius (°C) in the long term.
International Labour Review520
Action to limit climate change is hampered by the fact that benets are
felt in the long term, while the costs are felt today. Nor is it aided by the fact
that those responsible for inducing climate change are not the ones who will
be burdened by its consequences (Stern, 2007). Indeed, real or perceived short-
term costs in terms of gross domestic product (GDP) growth and employment
may discourage the adoption of climate action, even if it would result in long-
term benets (Brekke and Johansson-Stenman, 20 08).
Given the importance of employment in the political economy of cli-
mate change (Babiker and Eckaus, 20 07), this article addresses the em-
ployment implications of the 2-degree objective. Does taking globally
coordinated action that would effectively limit global warming to 2 °C cre-
ate employment opportunities or job losses in the medium term? Will this
transition entail a reallocation of employment across industries? And are
economies ready for these structural changes? In analysing a scenario that
achieves the 2-degree objective, we nd that employment effects are small
for most economies. In all, more jobs will be created than destroyed and
a certain reallocation of jobs is expected. In identifying the industries and
economies that will experience job losses and reallocation, this article high-
lights the specic areas for policy action to ensure that a transition to sus-
tainability is also a just transition.
The remainder of the article is organized into four sections. In the rst
section, we describe how climate action impacts employment across the global
economy, noting that complementary areas of policy change are needed for
climate action to be employment-friendly. The second section describes the
data and methods used to estimate the medium-term impact of climate action
on employment. In the third section we present our results, and in the fourth
section we discuss these results and provide our conclusions.
The low-carbon transition and employment
Economies are currently heavily reliant on the emission of CO 2 and other
greenhouse gases (GHGs) in order to meet their energy and product demand
(IPCC, 2013 and 2018; Steffen, Broadgate et al., 2015).1 According to the IEA
(2016a) and the World Bank World Development Indicators database, despite
a reduction in GHG intensity over the past 25 years (in 1990, 0.82 kg of car-
bon dioxide equivalent (CO2-eq) GHGs were emitted for every 2011 pur-
chasing power parity (PPP) dollar of GDP; in 2014 this had been reduced to
0.48 kg), total GHG emissions grew from 39 to 54 gigatons of CO2-eq, on ac-
1 Energy demand is the main source of GHG emissions across the world. Taking action in
the energy sector alone would help achieve the 2-degree goal (IEA, 2015). Industrial processes are
another signicant source of GHGs, while an important source of climate change is the reduction of
the biosphere’s ability to absorb GHG emissions, notably owing to land use change (IPCC, 2013).
Employment implications of the 2-degree goal 521
count of GDP growing faster than reductions in GHG intensity.2 GHG emis-
sions stand far above the Earth’s capacity to sequester these gases, producing
climate change (IPCC, 2013).
Further reducing the carbon intensity of economic activity to bring about
a decrease in overall emissions is a fundamental element of a climate-friendly
economy (idem, 2014b; Ward et al., 2016). Given that energy is one of the pri-
mary sources of GHG emissions (IPCC, 2014b and 2018), advancing a climate-
friendly economy is underpinned by the promotion of energy efciency, on the
one hand, and increasing the share of energy sources that do not emit GHGs,
on the other.
This is largely acknowledged in the nationally determined contri-
butions submitted by signatories to the Paris Agreement (IRENA, 2017; UNEP,
2017) and by different agencies providing advice with respect to specic meas-
ures for the energy sector (DDPP, 2015; IEA, 2015 and 2017; IPCC, 2014b).
The International Energy Agency (IEA, 2015) lays out a path for the tran-
sition towards renewable energy sources and an increase in energy efciency
to achieve the 2-degree goal.4 At the worldwide level and compared to a busi-
ness-as-usual path that would lead to global warming of approximately 6 °C, the
IEA’s 2-degree path proposes a 55 per cent global reduction in electricity gen-
erated from coal, a 26 per cent global reduction in electricity generated from
natural gas and a 13 per cent global reduction in electricity generated from oil.
The 2-degree path also projects an increase in electricity generated from renew-
ables such as geothermal, wind, solar photovoltaic and nuclear energy and hy-
dropower (globally at 75, 75, 59, 46 and 16 per cent, respectively), among other
sources. It also projects a 9 per cent reduction in the total electricity generated
due to enhanced energy efciency. Table 1 outlines the expected differences in
energy demand by energy source between the business-as-usual scenario and
the IEA’s scenario to achieve the 2-degree goal.
A shift away from fossil fuels and towards renewables and energy ef-
ciency will undoubtedly affect employment in the energy sector, given that the
amount of labour needed to obtain a similar output differs according to the
2 Carbon dioxide (CO2) is the largest contributor to GHGs which, in turn, are responsible
for climate change. Other GHGs include methane, nitrous oxides and F-gases (HFCs, PFCs and
SF6). For the sake of simplicity, non-CO
2 GHGs are converted to a CO
2 equivalent (CO2-eq) based
on their global warming potential (GWP). For example, nitrous oxide (N
2O), emitted during agri-
cultural and industrial activities, has a GWP of 298 times that of CO
2. F-gases, commonly used as
refrigerants or re suppressants and in various industrial processes, have a GWP ranging from 124
for some specic hydrouorocarbons, to 22,800 for sulphur hexauoride. Energy-related emissions
consist largely of CO
3 A low-carbon economy also requires the reduction of non-energy related GHGs, such as
emissions from industrial or agricultural processes. It can also entail the promotion of carbon sinks
(e.g. reforestation and afforestation) or the development of technology to capture and store GHG
emissions. As more than 50 per cent of these emissions result from energy demands, a low-carbon
economy cannot take place without specic attention to the energy sector (IEA, 2015).
In the Paris Agreement, countries pledge to follow their nationally determined contributions
(NDCs) to achieve the 2-degree goal. The analysis in this article focuses on the IEA and the path it
proposes to achieve that goal (IEA, 2015). We do not focus on the NDCs because a gap remains be-
tween what can be achieved with the currently dened NDCs and the 2-degree goal (UNEP, 2017).

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