Climate Change Policies and Employment in Eastern Europe and Central Asia

This paper analyzes the differential impact of climate change policies on employment in Eastern Europe and Central Asia. In particular, the paper examines (i) how vulnerable labor markets are in Eastern European and Central Asian countries to future carbon regulation, and (ii) what countries can do to mitigate some of the potential negative effects of these regulatory changes on employment. In many aspects, the nature of the shock associated with climate regulation is similar to that associated with an increase in energy prices. Constraints on carbon emissions put a price on climate-damaging activities and make hydrocarbon-based energy production and consumption more expensive. As a result, firms in energy-intensive industries may react to higher energy prices by reducing production, which in turn would lead to lower employment. In the presence of frictions in labor markets, these sector shifts will cause resources to be unemployed, at least in the short term. Using principal component analysis, the paper finds that Eastern European and Central Asian countries vary greatly in their vulnerability and adaptability of employment to carbon regulation. Since the economy takes time to adjust, policy-makers will need to ensure that the incentives are there for new firms to emerge and employ workers, and that workers have the skills to respond to that demand. Moreover, governments have a role to play in ensuring that workers that are displaced have a proper safety net that will not only help in protecting their welfare, but will also allow workers to make more efficient labor market transitions.

Bibliographic Details

Main Authors:	Oral, Isil, Santos, Indhira, Zhang, Fan
Format:	Policy Research Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2012-12
Subjects:	ACCOUNTING, ACTIVE LABOR, ACTIVE LABOR MARKET, ACTIVE LABOR MARKET POLICIES, ACTIVE LABOR MARKET POLICY, ACTIVE LABOR MARKET PROGRAMS, ACTIVE LABOR PROGRAMS, AGGREGATE DEMAND, AGGREGATE EMPLOYMENT, APPROACH, AVAILABILITY, AVERAGE UNEMPLOYMENT, AVERAGE WAGE, AVERAGE WAGES, BALANCE, BARGAINING, BARGAINING POWER, BIOMASS, CAPITAL INVESTMENT, CAPITAL MARKET, CARBON EMISSIONS, CARBON TAXES, CARPENTERS, CEMENT, CLASSROOM TRAINING, CLEAN ENERGY, CLEANER TECHNOLOGY, CLIMATE CHANGE, CLIMATE CHANGE POLICY, COAL, COLLECTIVE DISMISSALS, COLLEGE EDUCATION, COMMERCIALIZATION, COST INCREASES, DEMAND FOR ELECTRICITY, DIFFERENTIATED IMPACT, DIRECT JOB CREATION, DIRECT JOB CREATION PROGRAMS, DISADVANTAGED GROUPS, DISMISSAL, DISPLACED WORKERS, DOMESTIC COAL, ECONOMIC POLICIES, ECONOMIC SHOCK, ECONOMIC SHOCKS, EDUCATIONAL ATTAINMENT, EFFICIENCY OF LABOR, EFFICIENT LABOR MARKET, EFFICIENT LIGHTING, ELECTRICITY, ELECTRICITY PRICE, ELECTRICITY PRICES, ELECTRICITY SUPPLY, EMISSION, EMISSION CAP, EMPLOYABILITY, EMPLOYMENT, EMPLOYMENT EFFECT, EMPLOYMENT EFFECTS, EMPLOYMENT GROWTH, EMPLOYMENT IMPACT, EMPLOYMENT IMPACTS, EMPLOYMENT INCENTIVES, EMPLOYMENT INCREASE, EMPLOYMENT INCREASES, EMPLOYMENT OFFICES, EMPLOYMENT OPPORTUNITIES, EMPLOYMENT PROGRAMS, EMPLOYMENT PROTECTION LEGISLATION, EMPLOYMENT SERVICES, ENERGY BILLS, ENERGY CONSUMPTION, ENERGY DEVELOPMENT, ENERGY EFFICIENCY, ENERGY PRICE, ENERGY PRICES, ENERGY PRODUCTION, ENERGY USE, EXPENDITURE, FIRM SURVEYS, FIRST-TIME JOB SEEKERS, FLEXIBLE LABOR MARKETS, FOSSIL, FOSSIL FUEL, FOSSIL FUELS, FUEL, FUEL PRICES, FUELS, GENERAL EQUILIBRIUM, GENERATION, GREENHOUSE GAS, GREENHOUSE GAS EMISSIONS, GREENHOUSE GASES, GROSS WAGE, HIGH UNEMPLOYMENT, HIGH UNEMPLOYMENT RATES, HIGHER ENERGY PRICES, HOUSEHOLD SURVEY, HUMAN CAPITAL, HYDROPOWER, INCOME, INCOME SECURITY, INCOME SUPPORT, INFORMAL SECTOR, INNOVATION, JOB CREATION, JOB SEARCH, JOB SEARCH ASSISTANCE, JOB TRAINING, JOB-SEARCH ASSISTANCE, JOBS, LABOR COSTS, LABOR DEMAND, LABOR FORCE, LABOR MARKET CONDITIONS, LABOR MARKET FLEXIBILITY, LABOR MARKET INSTITUTIONS, LABOR MARKET NEEDS, LABOR MARKET PROGRAMS, LABOR MARKET REFORMS, LABOR MARKET REGULATION, LABOR MARKET REGULATIONS, LABOR MARKETS, LABOR REALLOCATION, LABOR REGULATIONS, LABOR SUPPLY, LOCAL FIRM, LONG-TERM UNEMPLOYMENT, LOW EMPLOYMENT, LOW UNEMPLOYMENT, MARKET ECONOMY, MARKET REFORM, MINIMUM WAGE, NATURAL GAS, OIL, OIL PRICE, OIL PRICES, OIL PRODUCER, OIL PRODUCERS, OIL SHOCKS, ON-THE-JOB TRAINING, PASSIVE LABOR, PERSISTENT UNEMPLOYMENT, POWER GENERATION, POWER PLANT, POWER PLANTS, PREVIOUS SECTION, PRICE CHANGE, PRICE CHANGES, PRICE INCREASE, PRICE INCREASES, PRICE OF ELECTRICITY, PRICE SUBSIDIES, PRIMARY ENERGY, PRIMARY SCHOOL, PRIVATE SECTOR, PRIVATE SERVICE, PRODUCTION PROCESSES, PRODUCTIVE INDUSTRIES, PRODUCTIVITY INCREASE, PUBLIC EMPLOYMENT, PUBLIC EMPLOYMENT SERVICES, PUBLIC WORKS, REGULAR EMPLOYMENT, REGULAR JOBS, RENEWABLE ENERGY, RENEWABLE SOURCES, RETAIL, RETAIL TRADE, RIGID LABOR MARKET, SAFETY, SAFETY NET, SALES, SERVICE PROVIDERS, SEVERANCE PAY, SEVERANCE PAYMENTS, SKILLS DEVELOPMENT, SOCIAL BENEFITS, SOCIAL PRICE, SOLAR PANEL, SOLAR POWER, SUBSTITUTION, SUBSTITUTION EFFECTS, TAX INCENTIVE, TAX REVENUES, TEMPORARY EMPLOYMENT, TEMPORARY WORK, TEMPORARY WORKERS, TOTAL EMPLOYMENT, TOTAL UNEMPLOYMENT, TRAINING COURSES, TRAINING INSTITUTIONS, TRAINING POLICIES, TRAINING PROGRAMS, UNEMPLOYED, UNEMPLOYED WORKERS, UNEMPLOYMENT, UNEMPLOYMENT ASSISTANCE, UNEMPLOYMENT BENEFIT, UNEMPLOYMENT BENEFIT SYSTEM, UNEMPLOYMENT BENEFITS, UNEMPLOYMENT INSURANCE, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, UNION DENSITY, UNSKILLED WORKERS, UTILITIES, VOCATIONAL EDUCATION, VOCATIONAL PROGRAMS, WAGE LEVEL, WAGE LEVELS, WAGE SECTOR, WAGE SUBSIDIES, WIND, WIND POWER, WORKER, WORKERS, WORKING HOURS, WORKING POOR,
Online Access:	http://documents.worldbank.org/curated/en/2012/12/17083512/climate-change-policies-employment-eastern-europe-central-asia http://hdl.handle.net/10986/12204
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