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Moving to a low-carbon economy: possible employment, education and skill effects

Moving to a low-carbon economy: possible employment, education and skill effects Chandra Shah & Sue North MONASH UNIVERSITY - ACER CENTRE FOR THE ECONOMICS OF EDUCATION AND TRAINING 14 th Annual National CEET Conference Friday , 29 October 2010. Purpose

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Moving to a low-carbon economy: possible employment, education and skill effects

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  1. Moving to a low-carbon economy: possible employment, education and skill effects • Chandra Shah & Sue North • MONASH UNIVERSITY - ACER • CENTRE FOR THE ECONOMICS OF EDUCATION AND TRAINING • 14thAnnual National CEET Conference • Friday, 29 October 2010 CEET

  2. Purpose • The purpose of the project was to assess the employment and skill effects of introducing CPRS and RET. • The purpose of a price on carbon is to change the behaviour of households and firms to use less goods and services that have high carbon-intensity, with the ultimate aim of reducing Australia’s share of carbon emissions in the atmosphere. CEET

  3. Motivation • The motivation for commissioning the work was to gather data on how the education and training system should prepare itself to the skill and training needs of the economy from such a major structural reform. CEET

  4. Original plan of study • Employment effects • Occupational structural effects • Skills effects CEET

  5. Scenarios • CPRS-5 • CPRS-5 with RET • CPRS-15 with RET CEET

  6. Plan • Treasury to provide the data from their modelling as input to the MONASH model • CoPS to produce employment forecasts by occupation • CEET to analyse results from CoPS and incorporate skills deepening to produce estimates of skill needs CEET

  7. Employment effects • MONASH is an economy-wide CGE model designed to investigate the net impact of policy changes on key economic variables • At the core of the model are relationships that link each sector of the economy to every other sector • The modelling results showed the net employment effects were almost insignificant both in aggregate and distributional terms. CEET

  8. Comparison with other studies How do these results compare with results from other studies? Direct comparison is difficult because each study uses a different model and investigates the impact of different policies. CEET

  9. Micro or bottom-up models Access Economics report for the Clean Energy Council investigates the impact of RET and energy efficiency mainly in the renewable energy sector (does not include second order effects). Reports employment increase of about 28,000 FTE mainly in the renewable sector over 10 years. Concept Economics report for the Minerals Council of Australia investigates the effect of CPRS-5 on the mining sector (once again does not include second order effects). Reports 24,000 fewer people will be employed in the mining sector in 2020 than would have been case without CPRS-5. CEET

  10. Hybrid model NIEIR report for ACF/ACTU uses a hybrid model to investigate two scenarios—Weak Action and Strong Action—which are both designed to achieve a reduction in emissions of 25% by 2020 and 50% by 2030. Employment higher by 770,000 under Strong Action than Weak Action in 2030. CEET

  11. Education and skill effects The types of models discussed so far are not designed to handle the complexity of changing skill needs or tasks within occupations, let alone emerging new occupations that are yet to be included in the standard classification of occupations. An alternative approach to assess the impact of low-carbon policies on skill needs is to conduct in-depth case studies of leading edge firms or firms which are already operating in a low-carbon policy environment. CEET

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