Mireille Chiroleu-Assouline is a French Seconomist who specializes in the areas of environmental and energy policy. She is a professor at the University of Paris 1 Panthéon-Sorbonne and the Paris School of Economics (PSE) and is widely recognized for her contributions to the study of environmental public policy, ecological taxation, and the economic implications of the energy transition.
In her book, Employment and the Energy Transition[i], Mireille Chiroleu-Assouline explores the relationship between the urgent need for energy transformation and its impact on employment. The book presents a thoughtful exploration of both the challenges and opportunities arising from this profound shift.
The idea of internalizing environmental costs, which is essential to advancing the energy transition, is investigated at the outset of the book. This process, achieved through mechanisms such as carbon taxation or emissions trading systems (the approach adopted by the European Union), seeks to integrate the true costs of pollution into energy prices. By increasing energy costs, these policy instruments aim to prompt adjustments in production processes, thereby aligning them with the goal of achieving carbon neutrality by 2050.
As energy costs rise due to the internalization of environmental costs, the book examines the critical role of production dynamics, particularly the substitutability of production factors. Faced with higher energy expenses, companies are incentivized to adapt by improving energy efficiency or substituting energy use with labor. Empirical studies support this substitution effect in energy-intensive industries such as metallurgy, paper production, and transportation equipment manufacturing. In practice, however, the increase in energy costs in France has predominantly led to incremental gains in energy efficiency rather than substantial shifts in employment structures. For businesses exposed to international competition, disparities in environmental regulations between the European Union and other regions raise concerns about competitive disadvantage, potentially prompting relocation to countries with less stringent standards—commonly referred to as “pollution havens.” The book discusses research that mitigates these apprehensions, pointing to the “Porter Hypothesis,”[1][2] which suggests that stringent environmental policies, such as carbon pricing or the EU emissions trading system, stimulate innovation and preserve competitiveness. Internalizing environmental costs is thus presented as a vital mechanism for reconciling economic competitiveness with the objectives of the energy transition. However, a key limitation is noted: much of the existing research was conducted before carbon pricing reached levels sufficient to induce profound structural changes, potentially reducing the applicability of these findings.[3]
The analysis extends to the net effects of the energy transition on employment within the energy sector. While the expansion of renewable energy creates new job opportunities, the fossil fuel industry simultaneously experiences significant losses. Given that renewable energy systems are generally more labor-intensive than fossil fuels, a net positive impact on employment is anticipated in the short to medium term, particularly during the installation of new infrastructure. The book notes that the expected rise in electricity demand—driven by the electrification of industries such as automotive manufacturing and processes like recycled steel or hydrogen production—further amplifies this trend. At the same time, it emphasizes the necessity of developing workforce skills and ensuring that jobs in renewable energy sectors offer comparable quality and stability to those in fossil fuel industries. Workforce training and upskilling are identified as essential components of this transition.
Broadening the scope, the book explores how the energy transition impacts the economy. Emerging industries driving the “greening” of the economy—such as organic agriculture, the circular economy, energy-efficient building renovations, clean transportation, the sharing economy, eco-industries, and digital technology—are analyzed for their effects on employment. Definitions, growth patterns, and the intensity of green and greening jobs are examined using a task-based approach that measures the proportion of green tasks performed within a given occupation. This methodology provides a nuanced perspective, moving beyond binary classifications of jobs as “green” or “non-green.” Based on this approach, three categories of green jobs are identified: existing roles, roles in transition, and entirely new professions. The book highlights the importance of accurate and comprehensive measurement to understand how labor markets are adapting to the demands of the energy transition, with each category requiring tailored policy interventions.
The discussion also addresses the macroeconomic implications of the energy transition on employment. Retrospective econometric studies indicate that energy-intensive industries, particularly those exposed to international competition, are among the most vulnerable to the changes imposed by the transition. On the labor side, manual workers appear more affected than those with technical skills. These disruptions, however, are shown to be temporary, as labor gradually reallocates to more competitive firms, resulting in neutral or marginally positive long-term impacts. The book emphasizes that the benefits and losses of the transition are not distributed equally. States, regions, and companies experience varying degrees of impact. Structural rigidities in the labor market, such as geographic immobility, skill mismatches, and variations in job quality, are identified as significant obstacles to the optimal reallocation of workers. These challenges risk exacerbating disparities between regions and socioeconomic groups, underscoring the importance of targeted public policies to address them effectively.
The final chapter introduces the concept of a “just transition,” which aims to harmonize environmental objectives with social equity. Central to this approach is the redistribution of revenues from environmental policies, such as through reductions in labor-related taxes. This strategy is presented as achieving a “double dividend” by simultaneously lowering emissions and reducing labor costs for businesses, thereby fostering job creation. A further recommendation is the targeted reduction of payroll taxes in sectors with significant potential for green job creation, such as renewable energy and energy-efficient building renovations.[4]
In conclusion, Employment and the Energy Transition provides a comprehensive and thought-provoking examination of the interplay between employment and the shift toward sustainable energy systems. By presenting actionable insights and emphasizing the integration of economic competitiveness and social equity, the book offers valuable guidance for researchers and policymakers. While some questions remain open, it serves as an essential resource for understanding the complexities of a just and sustainable transformation in labor markets.
[i] Chiroleu-Assouline,M., L’Emploi et la Transition Énergétique, Ed. Les Presses de Sciences Po, February 2024, pp.136.
Sylvain Belrose, CEC Research Fellow.
[1] Martin, Ralf, Mirabelle Muûls, Laure B. de Preux, and Ulrich J. Wagner. 2014. “Industry Compensation under Relocation Risk: A Firm-Level Analysis of the EU Emissions Trading Scheme.” American Economic Review, 104 (8): 2482–2508.
[2] Martin, R., Muûls, M., Wagner, U. J. (2016). The impact of the European Union Emissions Trading Scheme on regulated firms: what is the evidence after ten years? Review of Environmental Economics and Policy, v. 10, n. 1, pp. 129 148.
[3] The 2024 EU Competitiveness Report, also known as the Draghi Report, cites the free allocation of allowances and the limited CO¬2 price as the main reasons for the EU ETS’s low impact on emissions from the highest-emitting industries (p. 99). These two policies were justified by the risk of these industries losing competitiveness (https://commission.europa.eu/topics/strengthening-european-competitiveness/eu-competitiveness-looking-ahead_en#paragraph_47059).
[4] Once again, the findings of certain analyses could be tempered by a more thorough consideration of international competition, particularly regarding the role of China and its industrial development in sectors critical to the energy transition.