Predicted Distributional Impacts of Climate Change Policy on Employment

Efforts to reduce emissions to counter climate change are expected to have both costs and benefits. These effects are likely to be unevenly distributed across the population.

We examined the potential distributional impacts on employment in New Zealand from using different mitigation options ('pathways') designed to achieve net zero emissions of long-lived gases and to reduce biogenic methane emissions by 24-47% by 2050. For the analysis, we developed the Distributional Impacts Microsimulation for Employment (DIM-E). DIM-E uses results from a computable general equilibrium (CGE) model, C-PLAN, to estimate which industries, workers and jobs are expected to be most affected by different options to achieve these reductions.

Overall, our results are similar to those from previous research, in that the net employment effects are predicted to be relatively small, though some industries will be more affected than others. Moreover, the top net negative and top net positive industries ranked fairly consistently across the four time periods and across the different pathways that were analysed.

On the net positive side, transport industries tended to dominate the industry rankings, and in later periods, some agriculture industries also tended to rank highly (e.g., Dairy Cattle Farming and Sheep/Beef Farming). On the net negative side, various manufacturing industries tended to dominate the top ranks, though oil and gas extraction was also consistently ranked. We also found very few groups of workers were negatively affected (in terms of the number of worker-jobs) by any of the proposed pathways, especially over the long term.

DOI: doi.org/10.29310/WP.2021.07

Citation

Riggs, Lynn and Livvy Mitchell. 2021. “Predicted Distributional Impacts of Climate Change Policy on Employment. Motu Working Paper 21-07. Motu Economic and Public Policy Research. Wellington, New Zealand.