An Analytical Framework for the Assessment of Employment Impacts of Energy Transition

The potential employment generation is an important co-benefit and policy motivation to pursue energy transition. Empirical evidence suggests that energy transition leads to net employment gains. However, the job estimates vary across studies due to methodological choices, underlying modelling assumptions and scope of analysis. In this study, we present a systematic review of the studies that have examined labor impacts of energy transition to understand the underlying mechanisms that impact employment estimates. Using the Context-Interventions-Mechanisms-Outcome framework, we selected 236 papers for the study. The paper identifies multiple factors that explain these variations: first, the type of assessment used in the study impacts the projected job numbers. Gross assessment (42% of studies in our sample) provide optimistic results without accounting for the potential job losses. Second, ambitious climate action scenarios in an economy leads to the increase in projected jobs. We find that 25% of studies are dependent on the scenario assumptions. Third, employment details such as employment factors, learning effects, job quality and skills determine the intensity of the job estimates. The review suggests that only 12% of the studies have included learning effects in their assessment and 15% have assessed the skill requirements for the manufacturing of renewables. Based on these limitations in the existing literature, we have developed an analytical framework that can serve as the benchmark for studying the labor impacts of energy transitions. The framework systematically identifies and highlights the importance of integrating different elements previously discussed in the labor assessment studies to avoid the over-estimation/underestimation of employment numbers.