Employment Effects of a Transition Towards a Low-Carbon and Climate-Resilient Economy

The transition to a low-carbon economy requires a rapid decarbonisation of Europe's energy, industrial, transport and buildings sectors, as well as measures to adapt to a changing climate. This is not only a challenge in terms of the investment needs and the technological innovation, but also in terms of the needed labour inputs. This project takes stock of the employment effects of transitioning to a low-carbon, climate-resilient economy. The Ecologic Institute covers the parts of the research that are related to adaptation to climate change.

The employment effects of the low-carbon transformation do not happen in isolation - rather, they must be considered in the context of a dynamic and evolving labour market. A number of megatrends affect the way we work, and will do so for the foreseeable future – from digitization and automation to demographic change and globalization. As a result, labour markets in Europe and in other countries are dynamic and in a constant state of flux. The demand for labour results mostly from trends in economic development, for example led by technological advances or globalization patterns that are continuously changing. These trends are reflected in structural changes in the economy, with growth and decline across sectors and regions, and are the results of large numbers of business decisions reflected in businesses opening, closing, expanding and contracting. The supply of labour is also in a state of continual adjustment as workers enter and leave the labour market, for example due to decisions on education and retirement.

Thus, the low-carbon transition is in effect only one of several drivers at work. This project was set up to deliver a better understanding of the employment effects of a low-carbon transition in this dynamic context. The Ecologic Institute covers the area of climate change adaptation, and in this context contributes the following outputs: a literature review surveying the state of knowledge on the employment effects of climate change adaptation; a quantitative analysis to estimate the employment effects of climate change adaptation based on the identified investment needs; and third a policy analysis to establish in what detail the employment dimension is reflected in relevant EU policy initiatives related to climate change adaptation.