The Social and Environmental Consequences of the Twin Energy-Digital Transition

The Growth Lab's Research Seminar series is a weekly seminar that brings together researchers from across the academic spectrum who share an interest in growth and development.

Speaker: Aurélien Saussay, Assistant Professorial Research Fellow, Grantham Research Institute at the London School of Economics

Abstract: We analyze the labor market and environmental impacts of the concurrent diffusion of green and automation technologies using a novel dataset linking patent data to establishment-level job postings from 2010 to 2023. We develop a new measure of establishment-level technology adoption by constructing semantic similarity links between patent content and skill requirements in online job advertisements. We contribute three novel findings. First, we document substantial heterogeneity in the labor market impacts across green technology types: innovations in green ICT and buildings technologies appear labor-augmenting, while advances in green transportation and smart grids tend to be labor-saving. Over time, green innovation as a whole has become increasingly labor-saving. Second, using a shift-share instrumental variable (SSIV) empirical design, we find that increased green technology adoption leads to job creations, which are moderately skill-biased. Finally, despite potential concerns, we find no evidence that automation technology adoption weakens emissions reductions at the establishment level. Our results suggest that the twin green-digital transition may support both employment and environmental goals.

Bio: Aurélien Saussay is an Assistant Professorial Research Fellow in the Grantham Research Institute at the London School of Economics. He currently holds a Leverhulme Early Career Fellowship (2022-2025). He will be visiting Harvard Kennedy School in the Fall Semester 2024. His research focuses on the interaction between economic inequality and climate change mitigation policies, in order to address the social and political acceptance challenges that hamper the implementation of effective decarbonisation. He aims to estimate the impacts of climate change mitigation on economic agents empirically to help improve the design of decarbonization policies. He was previously an economist at OFCE, Sciences Po, where he led the environmental economics team. He remains an associate researcher and is one of the main co-authors of the Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policies (ThreeME), which is used extensively in France, the Netherlands, Mexico and Indonesia to assess the economic consequences of energy transition scenarios.