Predicted Distributional Impacts of Climate Change Policy on Employment

Efforts to reduce emissions to counter climate change are expected to have both costs andbenefits, and these effects are likely to be unevenly distributed across the population. Weexamined the potential distributional impacts on employment in New Zealand from usingdifferent mitigation options (“pathways”) designed to achieve net zero emissions of long-livedgases and to reduce biogenic methane emissions by 24-47% by 2050. For the analysis, wedeveloped the Distributional Impacts Microsimulation for Employment (DIM-E). DIM-E usesresults from a computable general equilibrium (CGE) model, C-PLAN, to estimate whichindustries, workers and jobs are expected to be most affected by different options to achievethese reductions. Overall, our results are similar to those from previous research in that the netemployment effects are predicted to be relatively small, though some industries will be moreaffected than others. Moreover, the top net negative and top net positive industries rankedfairly consistently across the four time periods and across the different pathways that wereanalysed. On the net positive side, transport industries tended to dominate the industryrankings, and in later periods, some agriculture industries also tended to rank highly (e.g., DairyCattle Farming and Sheep/Beef Farming). On the net negative side, various manufacturingindustries tended to dominate the top ranks, though oil and gas extraction was also consistentlyranked. We also found that very few groups of workers were negatively affected (in terms of thenumber of worker-jobs) by any of the proposed pathways especially over the long term