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Employment Impacts of Climate Change Mitigation Policies in OECD: A General-Equilibrium Perspective

Listed author(s):
  • Jean Château


  • Anne Saint-Martin


  • Thomas Manfredi


Using a computable general equilibrium, this paper quantifies the GDP and employment effects of an illustrative greenhouse gas emissions reduction policy. The paper first analyses the direct negative economic effects of the emissions restrictions on GDP and examines labour sectoral reallocations in a framework where labour markets are perfectly flexible. The model is then modified to incorporate labour market imperfections in OECD countries that could generate unemployment, namely, short-run rigidities in real wage adjustment. It is shown that imperfect wage adjustment increases the cost of mitigation policy since unemployment increases in the short-run, but that the carbon tax revenue generated can be recycled so as offset some or all of this effect, notably when it is used to reduce wage-taxes. Thus, taking realistic labour market imperfections into account in a CGE model affects the GDP costs of mitigation policy in two ways: first by introducing extra costs due to the increased unemployment that such policy may entail; second by creating the possibility of a double dividend effect when carbon taxes are recycled so as to reduce distorting taxes on labour income.. A l’aide d’un modèle d’équilibre général calculable ce papier cherche à quantifier les effets sur l’emploi et le PIB d’une politique d’atténuation du changement climatique. Dans un premier temps, le papier analyse les effets négatifs directs sur le PIB d’une politique de réduction des émissions et examine les réallocations sectorielles de l’emploi, dans un cadre où les marchés du travail sont considérés comme parfaitement flexibles. Dans un second temps une hypothèse d’imperfection du marché du travail dans les pays de l’OCDE est adoptée, cette hypothèse peut créer du chômage en raison de rigidité dans l’ajustement des salaires réels. Dans un tel cas, il est montré que les recettes fiscales associées à une taxe carbone peuvent permettre de mettre en place des politiques d’emploi actives, telles des réductions des impôts sur les salaires, qui peuvent à court-terme contrecarrer l’effet négatif de la politique d’atténuation du changement climatique. Ainsi, la prise en compte dans un modèle EGC d’une imperfection du marché du travail altère la perception des effets sur le PIB des politiques de changement climatique de deux façons : premièrement en soulignant les coûts supplémentaires qu’une telle politique peut entraîner en termes d’emplois et secondement en créant des conditions favorables à l’apparition d’un phénomène de double-dividende associée à des politiques adéquates d’utilisation des recettes fiscales liées aux taxes carbones.

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Paper provided by OECD Publishing in its series OECD Environment Working Papers with number 32.

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Date of creation: 12 Dec 2011
Handle: RePEc:oec:envaaa:32-en
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