Estimating Gross Employment Effects of Environmental Protection: The DIW Method

Environmental employment is an issue with high interest to the public and to policy makers. Yet, the debate is blurred by a great number of distinct definitions and hence estimates of environmental employment. Therefore it is essential to carefully document delimitations and methods used in any attempt to quantify environmental employment. This paper presents a method for estimating gross environmental employment, i.e. the number of persons who do have a job due to environmental protection activities which has been used in a number of studies for Germany by DIW Berlin. Our paper first outlines the delimitation of environmental employment used in these studies, relating it to Eurostat’s CEPA and CReMA classifications. It then describes the approaches used to estimate environmental employment. Environmental employment originating from the production of environmental goods is estimated by a demand side approach using Input-Output techniques. Environmental employment stemming from the provision of services is quantified by a supply side approach based on a large number of data sources. The paper explains which dimensions of environmental employment are presented in the above mentioned studies and concludes with some reflections on additional dimensions which may of interest.