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Effect of Energy Transition Under Net-Zero Target on Employment

Author

Listed:
  • Chetana Chaudhuri

    (National Council of Applied Economic Research (NCAER))

  • Devender Pratap

    (National Council of Applied Economic Research (NCAER))

  • Sanjib Pohit

    (National Council of Applied Economic Research (NCAER))

Abstract

With increased focus on achieving the target of net-zero emission by 2070, Government of India is exploring different pathways of energy transition. The effect of such transition is not only limited to energy sectors but would have effect on employment in all sectors of the economy, through the strong interlinkage of energy sector with other sectors. In this paper, we intend to capture the direct and indirect effects of the energy transition on employment through social accounting matrix approach, for three alternative scenarios outlined in India Energy Security Scenarios (IESS) 2047 (Version-3.0), developed by NITI Aayog. Direct and total (direct, indirect, and induced together) employment multiplier for operation and management is estimated for different renewable vis-à-vis fossil fuel sectors. It is found that employment multiplier for renewable energy sources such as solar power generation is more than that of coal. However, employment multiplier for wind is found to be less than coal or gas. Coal being the dominant source of fuel in power generation, has high share in employment within energy sector, and renewable power sector still needs time and efforts to catch up. Considering the present policies in business-as-usual (BAU) scenario and aggressive transition to renewable energy while keeping the economic aspirations under net-zero scenario, our study shows that direct employment generation in energy sector would be similar under BAU scenario and net-zero scenario. In total employment generation, net-zero scenario is found to be more effective.

Suggested Citation

  • Chetana Chaudhuri & Devender Pratap & Sanjib Pohit, 2025. "Effect of Energy Transition Under Net-Zero Target on Employment," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 68(1), pages 75-98, March.
    • Handle: RePEc:spr:ijlaec:v:68:y:2025:i:1:d:10.1007_s41027-024-00528-y
    DOI: 10.1007/s41027-024-00528-y
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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