Job losses and political acceptability of climate policies: why the ‘job-killing’ argument is so persistent and how to overturn it

Abstract

Political acceptability is an essential issue in choosing appropriate climate policies. Sociologists and behavioural scientists recognize the importance of selecting environmental policies that have broad political support, while economists tend to compare different instruments first on the basis of their efficiency, and then by assessing their distributional impacts and thus their political acceptability. This paper examines case-study and empirical evidence that the job losses ascribed (correctly or incorrectly) to climate policies have substantial impacts on the willingness of affected workers to support these policies. In aggregate, the costs of these losses are significantly smaller than the benefits, both in terms of health and, probably, of labour market outcomes, but the losses are concentrated in specific areas, sectors and social groups that have been hit hard by the great recession and international competition. Localized contextual effects, such as peer group pressure, and politico-economic factors, such as weakened unions and tightened government budgets, amplify the strength and the persistence of the 'job-killing' argument. Compensating for the effects of climate policies on 'left-behind' workers appears to be the key priority to increase the political acceptability of such policies, but the design of compensatory policies poses serious challenges. Key policy insights. Public perception of, and support for, climate policies is substantially reduced in the presence of large negative shocks, especially job losses. . Climate policies can be perceived as negative for employment, especially in areas where polluting industries represent a large share of employment and in occupations and sectors already damaged by globalization and automation. . Policymakers should distinguish between small and large distributional effects of climate policies, and find the appropriate combination of revenue recycling schemes, industrial and retraining policies as well as compensation packages to increase the support for such policies.

Germany’s decision to phase out coal by 2038 lags behind citizens’ timing preferences

“…To successfully manage "the next phase of the energy transition" 47 , which implies making established technologies and infrastructures redundant, we need to enhance our understanding of incumbents' survival strategies, including their corporate political activity aimed at slowing down the transition. Moreover, given the prevalence of particular stakeholders stressing job losses rather than new opportunities, the nexus between employment considerations and the political feasibility of decarbonization measures needs more scholarly attention 8,48 . Energy transition researchers and modelers would benefit from engaging with political scientists and sociologists to unveil the interests and activities of various actors shaping energy policies.…”

Policy goals, partisanship and paradigmatic change in energy policy – analyzing parliamentary discourse in Germany over 30 years

“…One example is coal mining: because it provides relatively high shares of GDP and jobs in some jurisdictions, the industry can have strong political power, e.g., in West Virginia, Australia, India, China or South Africa (Carley, Evans, & Konisky, 2018;Spencer et al, 2018;Winkler & Marquand, 2009). Yet, even if coal mining's share in terms of jobs and GDP is negligible across the whole economy (as in the US), it might still carry enough weight to influence some political actors (Vona, 2019).…”

Meeting well-below 2°C target would increase energy sector jobs globally

“…Understanding these potential job shifts is important for a couple of reasons. First, in economies where fossil fuel production and exports are important, political support for low-carbon transitions increasingly centers on the debate of jobs versus the environment or climate, [2][3][4][5][6] and it is important to know the impact such climate action may have on what are often politically salient SCIENCE FOR SOCIETY To keep global warming well-below 2 C, fossil fuels need to dramatically decline and be replaced by low-carbon energy sources. While the technologies to replace fossil fuels are widely available, support for their expansion is often linked to the impact they have on fossil fuel jobs.…”