Politicians around the world like to argue that ‘green growth’ will create jobs and stimulate innovation. This column examines the impact of energy taxes on business, with a dataset of 11 million European firms between 1996 and 2007. The results are mixed – it seems that dirty, smoke-filled growth may well be better for the firm’s workers and their customers.Politicians around the world like to argue that climate policy will create jobs and stimulate innovation. Such a message is largely unsupported but more palatable than the typical result of academic research that shows that climate policy would increase the costs of energy and slow down economic growth (Clarke et al 2009).
Most studies of the impact of climate policy are ex ante, for the simple reason that greenhouse-gas emission reduction is still something that is planned for the future rather than achieved in the past. Models are calibrated or estimated to data, of course, but by necessity have a stylised representation of reality.
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