Renewable Energy Investment and Employment in China

by: Ying Chen

July 07, 2017 |
Working Paper

This essay by Ying Chen addresses the potential trade-off between environmental protection and job opportunities in the Chinese economy.  It estimates the relative employment impacts of renewable energy investments versus spending within the fossil fuel economy.  The paper finds that spending within three renewable energy industries—solar, wind and bioenergy—will produce, in combination, about twice as many jobs per dollar of expenditure than an equal amount of spending on fossil fuels.  The paper also finds that more than 70% of jobs in renewable energy are informal.  This raises questions about the quality of the jobs created through renewable energy investments.

The potential trade-off between environmental protection and employment stability has been a concern in the literature. However, in the case of China, the employment issue has not been adequately addressed despite government’s big push on investing in renewable energy since 2007. This essay addresses the employment issue through estimating the relative employment impacts of renewable energy investments versus spending within the traditional fossil fuel sectors based on input-output modeling with China-specific data of sector and sub-sector weighting techniques. I find that spending within three segments of the renewable energy sectors—solar, wind and bioenergy, will produce in combination about twice as many jobs per dollar of expenditure than an equal amount of spending on fossil fuels. I also find that, more than 70% of jobs from renewable energy sectors are created in the informal economy. This raises questions about the quality of the jobs created through renewable energy investments.

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