D 1.4 Socio-Technical Analysis Report

Summary

INNOPATHS has a prominent focus on the socio-economic aspect of the low-carbon transition because arguments such as “job killing regulation” and “regressive distributional effects” are often used to undermine the political acceptability of climate policies. Identifying what may have been the distributional impacts of previous energy transitions is a key component of INNOPATHS, since it provides additional empirical support on a crucial aspect of the co-design of scenarios to capture the benefits for the winners and costs for the losers. However, winners and losers of the introduction of different policies and technologies are difficult to identify because a possible low-carbon pathway affects each actor along multiple dimensions. To address this fundamental issue, the deliverable D1.4 attempts to better understand socio-economic impacts along multiple dimensions and actors: regions, households, workers, countries, sectors and stakeholders. The diversity of approaches used to examine problems at different level of aggregation highlights the complexity of the socio-economic impacts. The report is composed of a collection of studies, each examining a particular aspect of the socio-economic impacts of past low-carbon transitions using different methodologies. We can summarize the conclusions of this deliverable into three broad insights reflecting the heterogeneity in the efforts, methodologies and stage of development of research projects presented in this report.

Insight 1: Climate policies do not appear to reduce aggregate employment, productivity and international competitiveness of EU industry and power generation sector. However, our results confirm a long-term employment decline in most carbon-intensive sectors that is likely to be explained mostly by other structural shocks, such as automation and globalization.

Insight 2 : Regarding the distributional effects, climate policies have been skill biased against manual workers and have favoured technicians and professionals. Looking at skill-biased impacts is crucial to assess the political acceptability of climate policies and the vulnerability of certain regions to the low-carbon transition.

Insight 3 : Qualitative empirical evidence reveals that energy injustice is not only an issue for centralized energy production, but also an issue for decentralized energy technologies such as solar energy and EV. Quantitative empirical evidence confirms that subsidies to low-carbon technology, i.e. energy-efficient cars in this case, can be highly regressive, and even more so for EVs (with the caveat on data quality mentioned above).

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