7 Low-carbon Jobs

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Global and domestic climate policy, as well as the resulting shifts in markets and investment, will drive both positive and negative effects on employment in Canada. Ultimately, a clean growth transition can only be successful if the Canadian economy continues to provide quality jobs to Canadians across the country. Data can help us understand and track various trends over time, informing policy decisions that improve outcomes for Canadians. While aggregate effects on employment are important, policy choices must consider challenges at the sectoral, regional, and individual level to protect people at risk of job loss and help more Canadians take advantage of emerging new job opportunities.

Headline Indicator #7: Decoupling Jobs and GHGs

Under a successful transition to a clean growth future, Canadian jobs will continue to increase as GHGs decrease. Our headline indicator for low-carbon jobs is therefore the gap between trends in jobs and GHGs between 2005 and 2018 (Figure 7.1). The metric captures the importance of existing jobs as well as new sources of lower-carbon jobs as Canada reduces its GHG emissions. Over the 2005–2018 period, the aggregate number of jobs grew by 16 per cent while GHGs remained relatively constant (-0.1 per cent). 

As long as overall GHGs are declining, it does not matter where the jobs come from. What matters is that Canadians have meaningful and stable employment.

Notably, this indicator does not distinguish between “green” jobs or “brown” jobs, terms often used to describe the labour market transition to a low-carbon economy (ILO, 2016). This is an advantage: there are many challenges associated with labelling specific jobs according to their green credentials but limited benefits. Instead, the decoupling metric values all jobs equally and considers the net effect on employment, accounting for both job losses and gains. As Canada decouples GHGs from GDP growth, many jobs will evolve and increasingly require work relevant to climate change. As long as overall GHGs are declining, it does not matter where the jobs come from. What matters is that Canadians have meaningful and stable employment. 

At the same time, however, simply increasing the number of jobs relative to GHG emissions should not necessarily be the sole objective. The goal is to increase the number of jobs and reduce GHGs while also promoting an efficient use of labour. The fact that job growth has been slower than GDP growth (Indicator #1) indicates an increase in labour productivity, which is generally a positive driver of economic growth (Box 7.1). That legitimate limitation does not invalidate the metric we use here; economic growth without employment growth can bring social challenges.


If labour is viewed as an input to economic output, using more labour per unit of GDP is inefficient. In fact, slower growth of jobs in comparison to GDP growth indicates an improvement in labour productivity. Increased labour productivity can translate into higher profits, increased wages, new investments, and a larger tax base, supporting economic growth and higher standards of living. Increased automation, for example, may reduce the need for labour in some sectors.

However, new productivity measures are emerging that may justify less efficient employment activities that improve environmental outcomes. The OECD, as part of its green growth indicator work, has been developing a broader measure of Environmentally Adjusted Multifactor Productivity that incorporates labour, capital, and natural resources as inputs and greenhouse gas emissions and air pollution as negative outputs. Fully incorporating environmental considerations into productivity measures could alter determinations of the most efficient use of inputs such as labour, capital, and natural resources.

There may also be societal objectives that justify less efficient employment activities. For example, the 2020 investment by the Canadian government in the clean-up of orphan and abandoned oil and gas wells provides a source of work for service companies affected by the 2020 COVID-19 pandemic restrictions and the drop in oil price. This may be inefficient in terms of the GDP generated per hour worked but will help companies stay afloat and limit layoffs while reducing a costly environmental liability not captured in GDP. 

Sources: Anderson (2020); Baldwin et al. (2014); OECD (2017); Winter and Moore (2013). 

  1. We exclude the Finance and Insurance category, as well as Professional, Scientific and Technical Services, as there is significant diversity within the sectors that makes them unlikely to all simultaneously be affected (beyond a general economic downturn) and they are concentrated in larger metropolitan areas more likely to see growth in a range of new employment opportunities.