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Green versus brown: Comparing the employment impacts of energy efficiency, renewable energy, and fossil fuels using an input-output model

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  • Garrett-Peltier, Heidi

Abstract

Global carbon emissions have reached unsustainable levels, and transforming the energy sector by increasing efficiency and use of renewables is one of the primary strategies to reduce emissions. Policy makers need to understand both the environmental and economic impacts of fiscal and regulatory policies regarding the energy sector. Transitioning to lower-carbon energy will entail a contraction of the fossil fuel sector, along with a loss of jobs. An important question is whether clean energy will create more jobs than will be lost in fossil fuels. This article presents a method of using Input-Output (I-O) tables to create “synthetic” industries – namely clean energy industries that do not currently exist in I-O tables. This approach allows researchers to evaluate public and private spending in clean energy and compare it to the effects of spending on fossil fuels. Here we focus on employment impacts in the short-to-medium term, and leave aside the long-term comparison of operations and maintenance employment. We find that on average, 2.65 full-time-equivalent (FTE) jobs are created from $1 million spending in fossil fuels, while that same amount of spending would create 7.49 or 7.72 FTE jobs in renewables or energy efficiency. Thus each $1 million shifted from brown to green energy will create a net increase of 5 jobs.

Suggested Citation

  • Garrett-Peltier, Heidi, 2017. "Green versus brown: Comparing the employment impacts of energy efficiency, renewable energy, and fossil fuels using an input-output model," Economic Modelling, Elsevier, vol. 61(C), pages 439-447.
  • Handle: RePEc:eee:ecmode:v:61:y:2017:i:c:p:439-447
    DOI: 10.1016/j.econmod.2016.11.012
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    References listed on IDEAS

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    More about this item

    Keywords

    C67; D57; J20; Q42; Q43; Q56; Input-output; Renewable energy; Energy efficiency; Fossil Fuels; Employment multipliers; Fiscal policy;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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