Economists are concerned about the consequences of the energy transition that has begun in the labor market

The process of accelerated “green transition” of the world economy in terms of labor is usually presented as a conflict-free evolutionary replacement of “dirty” jobs with “green” ones. Economists in the United States, analyzing the process that has already begun, show that in fact, workers in “dirty” industries only in 1% of cases find themselves a “green” job, and the process itself, apparently, is capable of generating significant amounts of new inequality and structural unemployment in industries.

The emergence of large amounts of primary data on the labor market allows economists to predict the behavior of the labor market much more accurately. Mark Curtis of Wake Forest University, Yusun Park of the University of Pennsylvania, and Lila O’Kane of Lightcast, in an article entitled “Workers and the Green Energy Transition,” based on existing US labor contract datasets for 2005-2021, attempted to find out how the “green transition” should look from the point of view of the labor market – in the USA it should be accelerated by the adoption of the “Inflation Control Act” of 2022, in the EU, the data of which were not considered in the work published in the NBER preprint series – “ Roadmap” of the European Commission for 2022–2030.

Both programs assume an accelerated exit from the labor market in the coming years of “dirty” jobs in industries with high energy consumption, large volumes of atmospheric emissions – and the corresponding opening of “green” jobs in enterprises with a low “carbon footprint”. When developing the programs, it was assumed that the process itself would be neutral in relation to the number of jobs and, at a given rate of “replacement”, would not lead to a strong increase in unemployment, and the change of workers in these industries would occur as the old “dirty” capacities were closed. Curtis, Park, and O’Kane examined a sample of 300 million U.S. job transitions from 2005-2021 (of which 130 million could clearly be categorized as “dirty” to “green” job transitions) as to how the process is actually taking place. .

The conclusions of the authors, based on the text, relating to the “energy transition” with enthusiasm, are unusual, although intuitive. With the closure of “dirty” industries, “green” jobs were occupied by about 1% of those laid off (this, in particular, was confirmed by the examples of Tesla and Toyota). With a more rigid definition of “green” places, it is shown that the figures for “replacing dirty jobs with green” at the personal level have increased from 0.1% in the 2000s to 0.7% now – and, apparently, will continue to grow at the same pace. As a rule, young and skilled workers fall into the category of “1% of new green workers”: the rest either find work in “dirty” industries, or leave the labor market for a while or forever.

The main, albeit cautious, conclusion of Curtis, Park and O’Kane is that with an increase in the speed of the “energy transition”, the specific figures will change, but the principle will remain the same, the geographical centers of the “dirty” industry will remain for a long time, the centers of the “green” industry will only replenish young. The authors do not discuss the fact that at the current very low unemployment rates in the US (3.5%), an accelerated “green transition” should also cause severe structural unemployment (a shortage of personnel in the “green” sector with a super-rigid labor market in the “dirty”). But, obviously, they are aware of this possibility, since they state that, due to the low demand in the “green” sector for workers without specialized education, the “transition” should cause a sharp surge in income inequality. Curtis, Park and O’Kane propose to solve the problem by further accelerating the “green transition” – which, in their opinion, will shorten the “transit” period for the existence of “dirty” industries and the duration of the effect. But the authors do not consider restrictions on investments and technological capabilities of such an acceleration.

Dmitry Butrin