New LSE research finds sectors with low carbon intensities boast higher productivity growth than those with high carbon intensity
Business sectors with low levsl of carbon intensity demonstrate higher productivity growth than the rest of the economy, according to the results of a new analysis published today by the Grantham Research Institute on Climate Change at the London School of Economics.
The analysis of 43 sectors in 39 rich and developing countries, including the UK, China, Brazil, India and the US, found sectors that emit high volumes of carbon dioxide per unit of output account for a relatively small share of employment.
These sectors have also experienced declines in the number of jobs and average worker's skill level during the study period, which spanned 1995 and 2009.
In contrast, the study found sectors with low carbon intensities increased their number of jobs and skill levels over the same period, while also having higher rates of productivity growth than in the overall economy.
"The Paris Agreement on climate change means that sectors of the economy that have high carbon intensities will need to lower their emissions or shrink in size," said study author Dr Baran Doda in a statement. "But the evidence is that economic sectors with low carbon intensities are more dynamic and growing, particularly in developing countries, and so have the potential to make up for the impacts on high-carbon-intensity sectors."
Dr Doda added that climate change policies are unlikely to have been the prime reason for the trends found in the study, bar in a few northern European countries where ambitious climate policies have been embraced. "This is good news in the sense that climate change policies need only to help rather than reverse the profound economic changes that are occurring," he said.
The new study is described in a working paper set to submitted to an academic journal, and therefore is yet to be been subjected to the scientific peer review process.
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