This report explores the potential employment and economic impacts of an EU transition to a low-carbon economy by 2030 - on the EU, and on other regions of the world. It analyses the impacts across sectors and occupations, with a particular focus on manufacturing. The report highlights that the impact of such a transition is positive for the EU as a whole, although with considerable variation between sectors. The positive impact on employment is largely due to the investment required to achieve this transition, along with the impact of lower spending on imported fossil fuels. The consequent shift in production has implications for labour market demand. The analysis is carried out using the E3ME macro-econometric model, which provides information on sectoral impacts, together with the Warwick Labour Market Extension model for occupational analysis. Further analysis of the employment developments in Europe is undertaken using Eurofound's European Jobs Monitor.

We study the impact of climate change mitigation policies intended to reach the Paris Agreement's two-degree target on the structure of European labour markets. Employing a three-sector macro-econometric model with a rich labour market extension, we show that the measures targeted at shrinking the use of fossil fuels in electricity generation and the road transport sector--both of which have an overall modest, positive impact on GDP and total employment--could make occupational structure less unequal and polarised in 2030, the target deadline. This could occur in more than half of the European Union's member states, particularly where the industries most affected by the transition to a low-carbon economy (i.e., mining and quarrying, utilities and manufacturing of coke and refined petroleum products) remain most important.

This report provides new projections, to 2026, of remote work rates and the accompanying macroeconomic implications for the EU27, Switzerland, Iceland, Norway, Republic of North Macedonia, Turkey and the UK. Remote work covers a range of practices but few are straightforward to quantify consistently. The definition of remote work used in this report is working from home (WFH), matching the Eurostat Labour Force Survey (EU-LFS) definition. The literature review identified a range of drivers (e.g. sectoral composition of the economy) and potential outcomes (e.g. changes in expenditures on information and communications technologies (ICT)). Using a conceptual framework developed from the literature review, we modelled a baseline projection and three alternative scenarios: one that projected lower rates of WFH by 2026 compared to the baseline (Unwinding of WFH); and two that projected higher rates of WFH (Acceleration of WFH and Acceleration of WFH with contract changes). By 2026, the baseline projects that 18% of workers in the EU27, and 19.6% of workers in all 33 study countries, will be working from home. There is substantial variation in these rates by individual country, from a 2026 rate of 42% in Luxembourg to 1% in Bulgaria and Romania. Compared to the baseline, the Unwinding of WFH scenario projects nearly 350 000 fewer total workers and more than 10 million fewer WFH workers by 2026, with the reduction concentrated mostly in services. The Acceleration of WFH scenario projects more than 830 000 additional workers in total and more than 24 million more WFH workers by 2026, employed mostly in service sectors. The Acceleration of WFH with contract changes scenario projects nearly one million more total workers and more than 24 million more WFH workers by 2026. In this scenario, workers are assumed to shift from permanent to self-employed contract positions, leading to a projected increase in the rate of self-employment of 3.7 percentage points compared to the baseline. An unwinding of WFH in Europe would generate modest increases in costs for firms, mild decreases in total employment for workers and small aggregate output reductions. An acceleration of WFH, coupled with an increase in digital development in Europe, would provide benefits in terms of cost savings to firms, higher employment and higher output. However, there is a risk that higher levels of WFH could lead to contract changes that, while providing benefits to firms, could undermine workers' power, pay and benefits. This has not been explicitly modelled in these projections but warrants deeper consideration.

Protectionism is on the rise. This scenario estimates the potential impact of a significant increase in tariffs in the world’s major trading blocs. The analysis is carried out using the E3ME macroeconometric model, which provides information on sectoral impacts, together with the Warwick Labour Market Extension model for occupational analysis. Further analysis of the employment developments in Europe is undertaken using Eurofound’s European Jobs Monitor. As predicted by economic theory, tariffs do impact negatively on both GDP and employment. The most negative impact is in the blocs that have a trade surplus. The EU-wide decline in GDP translates to a 0.3% fall in employment in the EU28 by 2030 compared to the baseline.