that 1.8, 10.3, and 9.3 percent are the shares of employment in “new and emerging,” “enhanced skills” and “increased demand” categories, respectively. The paper then investigates the links between green jobs and income between countries, to understand if the labor market adjustment to a greener economy is expected to be more demanding in poorer countries. When comparing countries in the latest year of available data, the results show that the share of green jobs is, in fact, lower in poorer countries, but there are substantial differences across types of green jobs. The association with income levels is very strong for “new and emerging” and “enhanced skills” occupations, but weaker for “increased demand” ones. A fixed-effects regression confirms these strong associations.

The second part of the paper asks the following question: if countries were to implement policies that penalize GHGE (such as a carbon tax, a carbon border adjustment, or banning certain forms of energy production), which jobs would be more at risk? To answer this question, the paper estimates the occupational structure of sectors of economic activity according to their GHGE levels per worker.<sup>6</sup> Then it classifies sectors within each country as green and non-green according to whether they are above or below the sector median GHGE level in each country. It is important to emphasize that this definition of “greenness” does not include other important dimensions such as the potential for transformation through the adoption of green technologies. Combining the green job and the sector classification, four groups of workers are defined: (i) Green occupations in green sectors (GOGS); (ii) Green occupations in non-green sectors (GONS); (iii) Non-green occupations in green sectors (NOGS), and (iv) Non-green occupations in non-green sectors (NONS). Green sectors would be less vulnerable to an increase in the cost of carbon. As a result, workers in green occupations in such sectors would face the lowest risk of displacement and highest re-employment likelihood in a greener economy in case of job loss. In contrast, workers with non-green occupations in non-green sectors would face the highest labor market vulnerability in terms of both job-loss risk and re-employment opportunities.

Using data from countries in Latin America and the Caribbean (LAC)—because of better availability of granular occupation data at the ISCO08 2-digit level—we analyze the relationship between green occupations and sectors. The first finding is that the concentration of employment in non-green occupations and non-green sectors – i.e. the most vulnerable group during a green transition – is

> 6 The focus on GHGE implies that the paper focuses on mitigation, rather than adaptation, in defining green sectors. We note here that this is not the only way green sectors can be defined. For instance, an alternative definition of sectors that considers more prominently the adaptation angle would define green sectors not only based on the level of emissions, but also on the potential to create green jobs and/or foster green technologies in the longer run. Examples of sectors that would be affected by this alternative definition include water management and waste management.

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