While any pollution control policy is likely to put a strain on the industry to which it applies, and will likely result in a loss of jobs in that industry, those cuts would be largely offset by increased employment opportunities in the unregulated economy, according to a new report from Resources for the Future. For example, a carbon tax would cause job losses in the coal industry, but it would likely increase employment in the clean energy industry. “Thus the policy causes a substantial shift in employment between industries, but the net effect on overall employment (and unemployment) is small, even in the short run,” the report says.
The report considers both pollution taxes and environmental standards, suggesting that neither would result in substantial net job losses. “An environmental performance standard causes a substantially smaller sectoral shift in employment than the emissions tax, with roughly similar net effects,” the paper says. “The paper’s results also suggest that overall effects on employment are not a major issue for environmental policy, and that policymakers who want to minimize sectoral shifts in employment might prefer performance standards over environmental taxes.”