Carbon Reduction Policies Would Lower Employment Slightly – CBO Report

In the US and abroad, opposition to proactive climate change initiatives, always returns to fears and claims that carbon reduction strategies will harm already-weak economies and result in lost jobs.

The US Congressional Budget Office (CBO) analyzed research on the effects that policies to reduce green house gases would have on employment and concluded that total employment during the next few decades would be slightly lower than would be the case in the absence of such policies.

CBO released a brief of the analysis (availble as a pdf).

The CBO Director’s Blog explains:

Adopting policies aimed at reducing emissions of green house gases would shift the demand for goods and services away from fossil fuels and products that require substantial amounts of those fuels to make or to use and toward alternative forms of energy and products that require lesser amounts of fossil fuels. Employment patterns would shift to mirror those changes in demand. Changes in employment in specific industries would reflect the amounts of greenhouse gases they emit (through production and use of their output) and the difficulty of reducing their emissions of those gases.

The analysis states that although more jobs would be lost than gained, most workers who lose jobs would find new one. The analysis also admits that in the absence of greenhouse gas policies, changes to the climate could also affect employment–however the analysis does not attempt to forecast any such changes. 

Coal mining would likely see the largest percentage decline in employment, because it emits more greenhouse gas than other forms of fossil fuels. 

CBO said employment in oil and gas extraction and natural gas utilities are also expected to decline as those fuels become more expensive and the demand for them declines. Mitigating factors could include continued demand for oil in foreign markets and greater use of natural gas–instead of coal–for power generation.

Mining (for materials other than coal), construction, and the industries that produce metals, nonmetallic mineral products (such as glass), chemicals, and transportation services–all of which use relatively large amounts of energy directly or indirectly–would probably also experience reductions in employment, although the percentage declines would be relatively small.

Over time, employment would increase in industries and sectors (such as services) whose products are less emission-intensive to produce and result in fewer emissions when used. Employment also would increase in industries that manufacture equipment for the production of energy using low-emission technologies such as nuclear, solar, and wind power.

In Related News…

Democratic Senator John Kerry and independent Senator Joseph Lieberman said they will unveil the legislation battling global warming on Wednesday, although passage looks increasingly doubtful without Republican support.

Read Reuters coverage at the link below.

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