Assessing the distribution of employment vulnerability to the energy transition using employment carbon footprints

Abstract

As the world moves away from fossil fuels, there is growing recognition of the need for a just transition of those working in carbon-intensive industries and for policy to support this transition. While recent policies such as the U.S. Inflation Reduction Act (IRA) have begun to incorporate support for energy-intensive regions, little work has thoroughly investigated which communities are most vulnerable to economic disruption in the energy transition and therefore require policy support. This paper analyzes the distribution of employment vulnerability in the U.S. by calculating the average “employment carbon footprint” of close-to every job in the U.S. economy at high geographic and sectoral granularity. The measure considers employment vulnerability across the entire economy and captures both fossil fuel consumption and production effects, with the sectors covered in our analysis accounting for 86% of total U.S. employment and 94% of U.S. carbon emissions outside of the transportation sector. We find that existing efforts to identify at-risk communities both in the literature and the IRA exclude regions of high employment vulnerability, and thereby risk leaving these communities behind in the energy transition. This work underscores the importance of proactive and continuous measures of employment vulnerability, presents policymakers with much-needed data to incorporate such measures into just transition policy and makes the case for place-based policy approaches when considering how best to support communities through the energy transition.