40
Blue Skies, Blue Seas
BOX 2.2
Job Creation from Green Growth Strategies A recent survey of more than 200 officials from central banks, finance ministries, and other economic experts identified five policy objectives with high potential for both economic outcomes (such as job creation) and climate impacts: clean physical infrastructure, building-efficiency retrofits, investment in education and training, natural capital investment, and clean research and development (Hepburn et al. 2020). These are promising areas for projects seen as able to create more jobs, deliver higher short-term returns, and bring greater long-term savings than traditional fiscal stimuli can create. The view that green policies have greater potential than traditional stimuli to create jobs is based on experience (as in the examples described below) as well as anticipation of a changing business environment due to the global commitments of major economic players to a greener orientation of global value chains (GVCs). Theoretical contributions also highlight the greater potential of green sectors for job creation—as, for example, in renewable energy projects that have delivered three times more jobs per dollar than comparable ones in the fossil fuel sector (Garrett-Peltier 2017). Comprehensive studies of the cleanenergy and other green sectors in the United States provide clear evidence that these sectors have an advantage in terms of not only the quantity of jobs created but also the quality of those jobs. The number of jobs in the clean-energy sector has been growing faster than in the fossil
fuel industry while also paying more across all pay levels, with an average wage premium of around 25 percent (BW Research 2020). The 1990 Clean Air Act Amendments and their environmental policies led to strong employment growth in the United States (Walker 2011). A more recent success story is that of the American Recovery and Reinvestment Act (ARRA), implemented in the United States in response to the 2008–09 Global Financial Crisis. It included large investments in green sectors such as waste treatment, public transportation, and energy, and it has led to substantial employment gains, at least in the longer term (Popp et al. 2020). Although the short-term employment gains were muted, long-run effects were positive and have been especially pronounced in areas with a higher endowment of preexisting green skills. The delayed materialization of employment gains implies that the full benefits of such programs may be visible with a lag—an important point for policy makers to consider. Furthermore, green policies and investment in sustainable sectors have created jobs at an impressive rate around the world. In China, the introduction of an emission-trading scheme in seven pilot regions has been a driver for employment while also distinctly reducing carbon emissions, yielding a double employmentdividend effect (Yang, Jiang, and Pan 2020; Yu and Li 2021). In Navarre, Spain, early adoption of renewable energy technology
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