By Hossein Jebeli and Geoffrey R. McCarney
The impact of environmental policies on labour markets is a highly contested topic. This paper uses individual-level occupation data and greenness measures of the tasks and skills assigned to each occupation to estimate the demand for occupations with higher green skill requirements following the introduction of a carbon tax in British Columbia (BC), Canada, in 2008. The results show that BC’s carbon tax did not deferentially impact either the hours worked or labour force participation rates for jobs with higher green skill requirements. However, we find that the policy did significantly reduce the unemployment rate in jobs with higher green skill requirements by 2 percentage points, and that when layoffs occur in jobs requiring green skills, the probability that those layoffs are classified as temporary instead of permanent increases for green skill versus non-green skill jobs. Counter-intuitively, we also find that this impact is more pronounced in emission-intensive (or ’brown’) industries, suggesting significant changes in the demand for green skills in these sectors. We also investigate the heterogeneous effects of the BC carbon tax across types of workers in the labour market, finding that the impacts of the policy on unemployment rates were more pronounced for male green-skilled workers who are low and medium-educated.
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The Clean Economy Working Paper Series disseminates findings of ongoing environmental and clean economy work conducted by researchers from a range of disciplines. These working papers are meant to make results of relevant scholarly work available in a preliminary form. Although these papers have not undergone a peer-review process, they meet general standards of scholarly excellence. The views expressed in these working papers are those of the authors and do not necessarily reflect the opinions of Smart Prosperity Institute.
