OECD Employment Outlook 2024
The Net-Zero Transition and the Labour Market
The transition to net-zero emissions by 2050 will have profound impacts on the labour market and the jobs of millions of workers. Aggregate effects on employment are estimated to be limited. But many jobs will be lost in the shrinking high-emission industries, while many others will be created in the expanding low-emission activities. This edition of the OECD Employment Outlook examines the characteristics of the jobs that are likely to thrive because of the transition (“green-driven jobs”), including their attractiveness in terms of job quality, and compares them to jobs in high-emission industries that tend to shrink. The cost of job displacement in these latter industries is assessed along with the trajectories of workers out of them towards new opportunities, and the labour market policies that can facilitate job reallocation. Particular attention is devoted to upskilling and reskilling strategies to facilitate workers’ transition into fast-growing, green-driven occupations. The distributive impacts of climate-change mitigation policies are also examined, with a focus on carbon pricing and options to redistribute its tax revenue to those most impacted. As usual, the first chapter of the Outlook assesses recent labour market developments (including wage trends), but also provides an update of the OECD Job Quality indicators.
Who pays for higher carbon prices? Mitigating climate change and adverse distributional effects
Carbon pricing incentivises a reduction in emissions and is one of the key climate change mitigation policies. It may raise a number of concerns, however, not least in the context of recent inflation surges and the energy crisis brought about by Russia’s war of aggression against Ukraine. A key concern is that carbon pricing measures may have adverse distributional consequences, which in turn can hinder support for necessary climate change mitigation action. This chapter estimates the carbon content of households’ consumption baskets and examines how higher carbon prices alter household budgets and consumer prices – and therefore the real value of workers’ wages. It examines whether carbon pricing measures are regressive and explores how burdens differ across groups, including disadvantaged ones. Based on the distributional impact and associated carbon price revenues, the chapter considers the scope for offsetting household burdens by channelling revenues back to households in the form of income transfers.
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