Climate Change Policies and Structural Change---An Empirical Analysis of Employment Impacts

Recently academic and policy oriented work to implement effective climate change policies to stop global warming has become very important. Concrete policy proposals for reducing CO2 emissions have been developed by academics, the Intergovernmental Panel on Climate Change and policy institutions. This dissertation analyzes the impacts of climate change policies on employment. In particular, three types of policies are considered in the context of a growth model with structural change: (1) changing households' preferences, (2) imposing carbon taxes and subsidizing labor (reducing labor cost) and (3) imposing carbon taxes on high-carbon industries while subsidizing low-carbon industries. On theoretical basis the climate policies are a studied with a neoclassical growth model and within an input-output analysis. In the empirical part of the work, employment and output dynamics of high-carbon and low-carbon intensive industries are estimated with a vector autoregression (VAR). Three policy shocks are subsequently imposed on the system to estimate the employment effects quantitatively. The results of the third policy, a budget neutral shift of from high to low-carbon industries, show that net gains in terms of aggregate output and employment are possible. Country specific differences in the empirical results are analyzed and discussed.