Survey and register data indicate that many employees prefer a socially responsible employer and will accept a lower wage to achieve this. Laboratory experiments support the hypothesis that socially responsible groups are more productive than others, partly because they attract cooperative types, partly because initial cooperation is reinforced by group dynamics. Overall, the findings indicate corporate social responsibility may have cost advantages for firms.
Optimal environmental policy aims at equalizing benefits and costs of improving environmental quality. While the benefits generally accrue in the form of increased health, worker productivity, quality of life, and amenity values, the costs of environmental regulations are mostly borne through impacts on industrial activity and labor market outcomes. Successful policy development requires information on the connection between environmental regulations, labor markets, and industrial activity.
Olivier Deschenes University of California, Santa Barbara, USA, and IZA, Germany
Nico Pestel IZA and Centre for European Economic Research (ZEW), Germany
Environmental regulations such as air quality standards can lead to notable improvements in ambient air quality and to related health benefits. But they impose additional production costs on firms and may reduce productivity, earnings, and employment, especially in sectors exposed to trade and intensive in labor. The limited empirical evidence suggests that the benefits are likely to outweigh the costs.
by Nico Pestel
Many industrial countries are replacing conventional power plants with renewable energy sources. Green energy policies might affect employment in different ways. A policy shift toward a low-carbon green economy may create new and additional “green jobs” in renewable energy sources and energy-efficiency technologies. However, this may potentially come with the crowding out of employment in other sectors. In addition, energy prices may increase owing to feed-in tariffs subsidizing renewables. The resulting burden may in turn stifle labor demand in industrial sectors and reduce the purchasing power of private households.
Environmental regulations raise production costs at regulated firms, though in most cases the costs are only a small fraction of a firm’s total costs. Productivity tends to fall, and firms may shift new investment and production to locations with less stringent regulation. However, environmental regulations have had enormous benefits in terms of lives saved and illnesses averted, especially through reductions in airborne particulates. The potential health gains may be even greater in developing countries, where pollution levels are high. The benefits to society from environmental regulation hence appear to be much larger than the costs of compliance.
by Jens Horbach
New environmental technologies (environmental/eco-innovations) are often regarded as potential job creators—in addition to their positive effects on the environment. Environmental regulation may induce innovations that are accompanied by positive growth and employment effects. Recent empirical analyses show that the introduction of cleaner process innovations, rather than product-based ones, may also lead to higher employment. The rationale is that cleaner technologies lead to cost savings, which help to improve the competitiveness of firms, thereby inducing positive effects on demand.
President Trump is fossil-fuel friendly but renewable energy provides five times more jobs than coal mines in rural communities. US wind-farm developers and suppliers employed more than 100,000 worker...
Once world famous for its tin and copper mines, an increasing demand for lithium, stimulated by the growth in the electric vehicle and renewable energy markets, could see Cornwall, England’s sou...
by Nico Pestel
The EU is ambitious when it comes to its climate targets. By 2030, the region wants to cut at least 40% of greenhouse gas emissions (from 1990 levels), achieve a share for renewable energy of at least...
by Peter Sloane
The football World Cup, organized by the Fédération Internationale de Football Association (FIFA), and the Olympic Games, organized by the International Olympic Committee (IOC), are the ...