A Research On The Impact Of Carbon Emissions Trading Scheme On Industrial Employment

In order to deal with global climate change and achieve the “double carbon”goals of “carbon peaking by 2030” and “carbon neutrality by 2060”,since 2013,the Chinese government has successively carried out pilot carbon emissions trading scheme in Beijing,Shanghai,Tianjin,Chongqing,Hubei,Guangdong,Shenzhen,and Fujian.The national carbon market of China was also officially launched in July 2021.Although the implementation of carbon emissions trading scheme has effectively reduced the intensity of carbon dioxide emissions in China,incumbent enterprises participating in carbon market can make corresponding adjustments to their labor demand under the function of the market mechanism,thereby affecting the employment scale of covered industries.At the same time,incumbent enterprises can also changed their demand for labor with different skill levels,thereby affecting the employment skill structure of covered industries.Therefore,while promoting energy conservation,emission reduction,and environmental protection in China,how to balance employment has become an urgent issue to be solved.This article focuses on the relationship between carbon emissions trading scheme and employment scale and employment skill structure.On the one hand,in order to clarify the impact mechanism of carbon emissions trading scheme on employment scale,this article first constructs a theoretical analysis framework in the context of incompletely competitive carbon markets,and decomposes the employment scale effect of carbon emissions trading scheme into a substitution effect and an output effects with opposite direction.Further,this thesis constructs an empirical testing framework and selects the market price of carbon allowance as the proxy variable for carbon emissions trading scheme to verify the theoretical impact mechanism of carbon emissions trading scheme on the employment scale of covered industries.Finally,this article discusses the heterogeneous effect of carbon emissions trading scheme on employment scale of various covered industries with different emission reduction potential and market power.On the other hand,in order to clarify the impact mechanism of carbon emissions trading scheme on the employment skill structure,this article first constructs a theoretical analysis framework,and decomposes the employment skill structure effect of carbon emissions trading scheme into an innovation effect and a cost effect.Further,this thesis constructs an empirical testing framework and selects the market price of carbon allowance as the proxy variable for carbon emissions trading scheme to verify the theoretical impact mechanism of carbon emissions trading scheme on the employment skill structure of covered industries.Finally,this thesis discusses the heterogeneous effects of carbon emissions trading scheme on employment skill structure of various covered industries with different innovation capabilities and production cost.Based on the above research,the main conclusions of this article are as follows.First,strategic buyers of carbon allowance have stronger market power in the carbon market,their strategic behavior distorts the carbon market and reduces the employment scale of covered industries.After decomposing the total employment scale effect of carbon emissions trading scheme,this article finds that the positive output effect cannot offset the negative substitution effect,thus the total employment scale effect of carbon emissions trading scheme is negative.Secondly,carbon emissions trading scheme can optimize the employment skill structure of covered industries.Further mechanism analysis indicates that carbon emissions trading scheme only optimizes the employment skill structure of covered industries through innovation effect,while cost effect does not exist.Finally,carbon emissions trading scheme has a heterogeneous impact on the employment scale and skill structure of the covered industries.Based on the above conclusions,this article can propose the following policy recommendations.First,the government can improve the design of carbon emissions trading scheme by setting minimum prices for carbon allowance and strengthening antitrust measures,thereby addressing the adverse impact of incompletely competitive markets on employment scale.Further,the government can increase investment in research and development in various industries covered by carbon emissions trading scheme,increase policy support for technological innovation of incumbent enterprises,thus can effectively encourage incumbent enterprises to carry out technological innovation by improving the design of carbon emissions trading scheme,thereby to optimize the employment skill structure of various covered industries.Last,the government should balance the dual issues of environmental protection and employment,and assist incumbent enterprises in strengthening skill and job transfer training for low skilled workers in the production sectors.Hence these policy supports can help transfer those low skilled workers to technical sectors,thereby reducing the losses caused by carbon emissions trading scheme on employment,especially for low skilled labor.