Job creation is a top priority for public officials, and in U.S. politics, the links between job creation, energy policy and environmental regulation have become very contentious issues.
Opponents of environmental regulation argue that jobs are destroyed in vast numbers when new regulations are imposed to protect human health and public safety or to reduce pollution and carbon emissions. This paper starts from the question: Can it really be the case that what’s good for the environment is always bad for jobs?
The authors surveyed the studies cited in stump speeches and news reports that estimate jobs lost or gained due to energy and environmental policies, exploring the type of investments that are projected to foster jobs growth and just how much confidence should be placed in these economic predictions.
Across almost all studies they found a broadly consistent “big picture” result: Jobs are created when investments are shifted out of fossil-fuel industries and into non-fossil-fuel industries, and jobs are destroyed when the opposite occurs. As a result, policies that support alternative energy and environmental protection are often very successful at increasing employment.
The authors also built a checklist of questions to evaluate employment-impact estimates:
- Does the study include direct, indirect, and induced spending?
- Does the study adequately explain the source of the job ratios?
- Does the study explain what it means by a “job?” (full-time equivalent or all jobs?)
- If the study clearly uses part-time plus full-time jobs, does it explain why?
- Does the study make it clear whether job estimates are cumulative or for a single year?
- Does the study use new spending net of a baseline in the absence of the policy change (as opposed gross spending)?
- If the study clearly uses spending net of a baseline, does it look at the difference between the policy and its most likely alternative?
- Most job studies base their results on a very simple estimation method.
- Does the study discuss what may have been missed from its analysis?
Download the paper (PDF, 1MB)