There is as yet no evidence for developing countries, so the views expressed on this are mainly conjecture. Although it is often taken for granted, the evidence on green jobs in rich economies in response to reducing incentives for the use of environmental capital is not clear-cut at best, and positive effects – if any – are dependent on local circumstances (Huberty et al. 2011). Some of the highest quality evidence on reducing incentives for the use of environmental capital gives one pause. Using very detailed plant-level growth data, Greenstone (2002) shows that 590,000 jobs were displaced between 1972 and 1987 in the United States due to a particular key environmental regulation: the US Clear Air Act. Recent work on more cost-effective incentive-based policy instruments finds milder negative effects (Harrington et al. 2012). In any event, the way in which this would play out in the developing world is difficult to judge, but maintaining labor-intensive growth that internalizes environmental capital costs is not automatic. The above discussion indicates that the implications of the latter for the former depend on numerous adjustments of factor proportions and technology within sectors as well as adjustments of output shares across sectors.

If the labor intensity of growth cannot be maintained, this situation leads to further consequences in terms of structural transformation. Growth that is less labor intensive will slow the labor absorption from agriculture. Moreover, inputs into agricultural growth, such as fertilizer, water, or transport, will become more expensive. Although lower intensification of agriculture may preserve the environmental capital required for agriculture in the long run, it will slow the agricultural and labor productivity growth that feeds structural transformation in the nearer term. If policies reduce incentives for mobility (due to fuel costs or transport regulation), the spatial development effects could also be considerable because longer-distance trade may become less profitable and because populations in more remote areas are at risk of losing their connectivity with urban centers.

# _Low Carbon and Other Environmentally Friendly Public Investments_

The second set of green growth policies we consider here is the direct implementation or encouragement by the public sector of environmentally friendly investments. In the transport sector, for example, some capital may be allocated away from long-distance travel (such as highways connecting towns over large distances), making the movement of goods and people more expensive and affecting the integration of economies. Investments may instead focus on local-level development (such as supporting growth focused on local linkages, including agriculture near cities and other local product focuses). More marginal areas would find it more difficult to catch up because the integration of economies would be affected. In both examples, the dynamic transformation of economies across sectors and space would be affected. Whether the local growth effects would compensate for these negative effects is not clear a priori. However, it is highly unlikely that such plans would survive any serious economic scrutiny.

Among the more serious options, some have argued that investment in low carbon energy production could raise employment considerably because it would require considerable labor. This view would lead to green growth as an engine of pro-poor job creation. For example, Engel and Kammen (2009) provide data on the labor intensity in years per GWh for various means of producing energy, including gas, coal, nuclear, solar, geothermal, and biomass. The data suggest that much more labor is required per GWh for low carbon alternatives than for gas or coal. The implication of this higher labor intensity is that moving resources to invest more in low carbon alternatives would create more jobs for the 13