Searching for a Just Transition: Micro-Level Employment Impacts of Climate Policies

Abstract

We develop and apply a modelling framework to estimate the micro-level employment impacts of climate policies in Aotearoa New Zealand. Our approach links an economy-wide model with a micro simulation module to calculate employment changes for different groups of the population across several dimensions (and combinations of dimensions), including sectoral, geospatial, demographic, and socio-economic categories. By simulating the linked modelling framework out to 2050 for proposed climate policies, we estimate which industries, workers, and jobs are expected to be most affected by these policies. Industries that experience the largest negative employment impacts include coal mining, oil and gas extraction, and some manufacturing activities. Reflecting the deployment of labour-intensive abatement options, some agriculture industries experience the largest employment increases. Workers that incur a disproportionate share of the transition are older, have lower levels of education, or are Māori. Employment transitions are also concentrated in certain regions. The results and modelling tools can help the New Zealand government formulate policies to ensure a ‘just transition’ to a low carbon future.