Linking green trade and employment: Are there opportunities for job creation?
Green trade is on the rise, with significant growth in exports from China and middle-income countries. This report highlights the positive impact of green trade on employment and its crucial role in sustainable economic development.
This paper examined global trade patterns in green goods from 2012 to 2022, using comprehensive international trade flow data from the World Integrated Trade Solution (WITS) and the United Nations International Trade Statistics Database (UN Comtrade), and combining that data with the International Monetary Fund (IMF) list of environmental goods. The analysis shows a trend towards increased green trade during recent years. It also reveals a considerable increase in the export of green goods over the past decade, with China and middle-income countries demonstrating the most significant growth.
To estimate the employment impacts of green goods exports, a multi-regional input-output (MRIO) model was used. The model integrated the Organisation for Economic Co-operation and Development (OECD) Inter-Country Input-Output tables (ICIO) with labour statistics from the International Labour Organization statistics database (ILOSTAT), facilitating an estimate of direct and indirect employment effects across countries and sectors using labour characteristics (e.g. age, gender, skill level, formality status).
The findings underscored the growing relevance of green trade in fostering sustainable economic development and highlighted the role of global value chains in disseminating green technologies and creating employment opportunities. This paper contributes to the existing literature by delivering a comprehensive analysis of green trade flows and their related employment impacts using level of country and sectoral disaggregation.