Conference Agenda

Firms with high carbon emissions post more jobs related to disruptive green technologies than comparable low-emission peers. A set of channels shapes this pattern in the supply of technologies. While institutional ownership increases green technology supply particularly by brown firms, public climate awareness makes an impact mainly through green firms. Exposure to climate policies like emissions trading promotes green technology job postings only minimally, but reduces firms' overall technology supply. A portion of these effects comes through firms being financially distressed, which is generally more salient for brown firms than for green firms. Overall, our results suggest that brown firms are actively shifting towards greener business models, but do so in various ways. They respond to investor pressure mainly by expanding their green technology supply, while tighter climate policy and higher financial distress rather incentivize them to reduce their other operations.

Despite firms’ increased attempts to reduce their environmental impact, research on how the green transition impacts labour markets, and specifically the demand for skill, remains scarce. Whether a green transition increases or decreases income inequality depends, in part, on its effect on the skill premium. This paper uses Norwegian administrative data on firms’ technology adoption matched with workers to identify the impact of green technology on the demand for skill. The paper proposes a novel shift-share instrument to isolate the causal effect, using firms’ import mix as a measure of exposure to global patenting. Finally, a simple theoretical model of skill-biased green technological change is developed to describe the mechanisms. While the key contribution of the paper is new empirical evidence, the novel instrument and theoretical insights both have applications in other cases where shifts in technological paths are observed. Preliminary results indicate that green technology is indeed skill-biased, but not significantly more than other types of technology. Therefore, whether green technological change comes in addition to, or replaces, other types of technological change matters for its impact on skill bias and wage inequality.

This project aims to investigate the effects of climate policy on the returns to skills in the Swedish labor market. Using matched employer-employee data from the Swedish registers for the years 2004-2021, I estimate the effects of the carbon and energy tax paid by firms on wages of different skill groups. Individuals’ skills are collected from the educational register, and tax payments are calculated based on firms’ fuel statistics, where I use an IV approach to overcome the endogeneity of firms’ tax rates. Preliminary result indicates that fuel taxation is skill-biased, where the elasticity of annual income with respect to variations in total taxation is -0.21 for workers without a high school diploma. The results can increase the understanding of how climate policy changes the composition of labor demand and its implications for labor market inequality.

The transition from fossil to clean energy sources requires a large-scale shift in technological development from fossil to clean technologies. We analyze how green research and development in firms that supply inputs to producers of dirty energy (oil), react to a strong negative shock to future expected returns to oil producers. In a theoretical framework of directed technical change, we show that if firms face a cost of adjusting the size of their innovation activity, a negative shock to profitability in dirty energy production may induce exposed firms to shift their activity towards green innovation. In the empirical analysis, we study firms supplying intermediates to oil producing companies and propose a novel method of identifying the extent of their exposure to variations in the oil price. We find that firms that are more exposed to the 2014 fall in oil prices increase their clean research and development more than firms that are less exposed to the shock. Our findings have important implications for how to design effective policies that promote environmentally sustainable economic growth.