환경정책의 고용 영향 분석

Abstract

Chapter 1. Introduction 1. Introduction Because the Korean economy is in recession, the Korean government is in a dilemma between improving the environmental quality and developing the economy. But, in 2004, Hwang and Kang investigated the relationship between labor demand and environmental policy and showed that there is at least no trade-off between economic development and environmental protection. Two years later, we had the opportunity to collect more data, and we study the relationship between environmental policy and job creation in more depth. In this study, we classify environmental policies into three big categories: first, a policy that can affect the environmental industry; second, public expenditure for natural environmental protection and third, the effect of renewable energy industry on job creation. And we try to analyse the effect of these policies on job creation. 2. Literature Review Even though a regulation raises the production cost, it provides strong incentives for environmental protection, and sometimes it enhances labor demand in that sector. Two OECD reports suggest that the effect of policies on employment will be small but having potential for greater effects. Some papers also support that at least environmental policies do not have serious negative effects on the labor market. Chapter 2. Jobs in the Environmental Sector in Korea 1. Environment-related Jobs in the Overall Industry The Korea Employment Information Service(KEIS) has annually published the Occupational Employment Statistics(OES) since 2001. The occupations which are related to the environment in the OES are categorized as environmental engineers, environment/health hygiene workers, operator of environmental facilities, managers, and cleaners. 2.4 percent of total workers in OES had environment-related jobs in 2003. Among them, high-skilled workers are about 10 percent and the remaining 90 percent are low-skilled labor. This indicates that the majority of workers in the environment-related labor market are low-skilled labor. Using this categorization, the distribution of low-skilled and high-skilled workers in each sector is shown below Table 1. Table 1. Distribution of Worker Skill by Category (2003) This suggests that if the government focuses on the improvement in environment-related labor structure, then it had better spend its money on environmental technology development or industrial restructuring for an environment-friendly industry structure. 2. Jobs in the Environmental Industry The statistics about environmental industry is collected by the Ministry of Environment in Korea. In 2004, 15 percent of the environmental industry is engaged in the manufacturing sector, 5 percent in construction, and the remaining 80 percent of the companies are in the service sector. Total sales of the environmental industry in 2004 was 21,428 billion won. Forty percent of total sales came from the manufacturing sector, 17 percent from construction, and 43 percent from the service sector. The distribution of workers is provided in Table 2; Table 2. Worker Distribution in the Environmental Industry Chapter 3. Job Creation by the Environmental Industry and Public Investment 1. Some Background of the Estimated Model Ordinary labor demand function (here, labor demand means the labor demand in the environmental sector of each environmental industry) is derived from the profit maximization condition of firms. We adopt the panel data technique. Generally, we follow the widely accepted estimation methods; panel generalized least square, panel generalized least square with heteroskedasticity, panel generalized least square with autocorrelation, random effect model, and random effect model with autocorrelation. 2. Job Creation in the Environmental Industry On the average, each industry is estimated at the elasticity of sales on labor demand as from 0.193 to 0.259. So, when we define 0.193 as minimum elasticity estimator and 0.259 as maximum value for that, it means that at one percent change of sales on the average level, it gives 0.193 percent to 0.259 percent increase of labor demand in each environmental industry. The following Table 3 shows the labor demand increase in the environmental industry with regard to the sales increase in the environmental sector. Table 3. Total Labor Demand Increase in the Environmental Industry according to One Billion Won Sales Increase in the Environmental Sector When we compare the result with the direct induced employment coefficient of the overall manufacturing industry presented in the with Input/ Output tables, we can find that the job creation ability of the environmental industry is not that small. 3. Job Creation by the Public Environmental Expenditure and the Renewable Energy 3.1. Job Creation by Public Expenditure in Natural Resource Preservation Area We investigate the job creation in the natural resource sector first. Kim(2006) suggests the detailed job availability in the natural resource sector as follows; Table 4. Job Creation in the Natural Resource Sector Based on this scenario we can guess the size of expenditure for the job creation in Table 5 by simple multiplication. Table 5. Expected Annual Government Expenditure for Job Creation in the Natural Resource Sector So when we compare the job creation ability between public expenditure in the natural environmental sector with that of the environmental industry sector, the effect of job creation in the natural resource sector is very large in view of job creation size. 3.2. Job Creation by Public Expenditure in the Renewable Energy Industry In 2004, Soo-Jin Kim studied the employment effect of solar and wind energy industry in Korea with 1998 Input/Output table. Based on her scenario and calculation we can get the following Table 6. Table 6. Job Creation in Wind and Solar Power Plant (2015) Chapter 4. Policy Implications Environmental policy will be heading toward an integrated approach to pollution management instead of managing each pollutant separately. This change requires the development of environmental technology to control the pollution. Given this point of view, it is desirable for government policies to focus on job creation in the environmental sector. Furthermore, the government needs to upgrade the labor quality in the environment-related sectors, and it is timely for the government to consider the ways to enhance the high-skilled labor force. The following Table 7 shows the job creation possibility by spending 1 billion won for the environmental industry, public expenditure for natural resource protection, and power generation of renewable energy (wind and solar). Table 7. Job Creation per One Billion Won Spending This suggests that, in the short run, the best policy to create jobs is related to the policy that enhances private business services and public services industry. But when we consider that a large portion of created jobs from expenditure in the natural resource sector is low-skilled workers. In the long run and in view of the size of the market for the industry, the desirable policy is to promote the environmental industry. For example, if the government wants to create jobs by developing the environmental industry, it is appropriate for the policy to focus on the construction and other machinery industry sector. However, if the government wants to directly increase environment-related jobs, then it is effective for the policy to support other sectors. In the case of the renewable energy sector, it has a reasonable job creation ability if the conditions for development of renewable energy are satisfied. But, the development of renewable energy is very restricted in Korea. The last thing that we consider is the change of location of manufacturers or production site of industries according to the stringency of an environmental policy. But it is not easy to indicate the stringency of the environmental policy because of employment loss according to production site change. Chapter 5. Conclusion When we consider that the policy direction has changed to an integrated approach from treating each pollutant separately, so it is time to consider that labor policy in the environmental sector pursues the way to enhance labor quality in the environmental service section. One of best ways to achieve job creation is to support the environmental industry. The environmental industry has a high potential to be a major industry in the future. Because the environmental industry itself is relatively technology or research oriented, it is quite an appropriate place to improve the labor quality. Job creation through public expenditure spending looks more effective than that in the environmental industry support. But when we consider labor quality and job duration, it is useful for the government to solve only the temporary unemployment problem. When we look at the renewable energy industry, it is also effective to invest in this sector in the view of job creation and labor quality improvement. But when we consider the climate condition and demand for energy in Korea, the job creation effect in this sector is limited. So the government chooses the policy effectively according to the situation which the government is confronted with. Sometimes, some can argue that if money is spent on other sections that can create more jobs, then it is not an efficient way to invest or spend money for the development of the environmental sector in the view of job creation. But when we consider the characteristics of environment, unpredictable, asymmetry of recover and destruction, the value of environmental protection can be larger than some job creation.