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Employment dynamics in a rapid decarbonization of the power sector

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  • Pichler, Anton
  • del Rio-Chanona, R. Maria
  • Farmer, J. Doyne
  • Ives, Matthew
  • Bücker, Joris
Abstract
Transitioning to a net-zero emissions power system will create and destroy jobs in different occupations, creating skill mismatches and labor mobility frictions. We analyze the employment dynamics of a fast transition scenario for the US electricity sector that reaches 95% decarbonization by 2035, using an input-output model coupled to an occupational mobility network. We find three distinct labor market phases during the transition: 'scale-up', 'scale-down', and a long-term steady state. During the scale-up phase, from 2023–2034, for every job lost in a given industry, twelve new jobs are created elsewhere. But only a few occupations experience a consistent increase in demand throughout the transition. We predict that skill mismatches will create labor frictions during the transition, especially in the scale-down phase. Without proper planning, rapidly growing industries will struggle to find skilled labor in the scale-up phase, and displaced workers will have difficulty finding jobs during the scale-down phase.

Suggested Citation

  • Pichler, Anton & del Rio-Chanona, R. Maria & Farmer, J. Doyne & Ives, Matthew & Bücker, Joris, 2023. "Employment dynamics in a rapid decarbonization of the power sector," INET Oxford Working Papers 2023-28, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    • Handle: RePEc:amz:wpaper:2023-28
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    References listed on IDEAS

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