Reducing work hours would do the climate a big favor

ioeDavid Rosnick1 [Center for Economic and Policy Research, USA]
Copyright: David Rosnick, 2013

Abstract
The choice between fewer work hours versus increased consumption has significant implications for the rate of climate change. A number of studies (e.g. Knight et al. 2012, Rosnick and Weisbrot 2006) have found that shorter work hours are associated with lower greenhouse gas emissions and therefore less global climate change. This paper estimates the impact on climate change of reducing work hours over the rest of the century by an annual average of 0.5 percent. It finds that such a change in work hours would eliminate about one-quarter to one-half of the global warming that is not already locked in (i.e. warming that would be caused by 1990 levels of greenhouse gas concentrations already in the atmosphere). The analysis uses four “illustrative scenarios” from the Intergovernmental Panel on Climate Change (IPCC), and software from the Model for the Assessment of Greenhouse-gas Induced Climate Change to estimate the impact of a reduction in work hours.
Introduction
The world will have to cope with some amount of climate change. Already, humans have released sufficient greenhouse gases into the atmosphere to raise the average surface temperature of the planet. Atmospheric concentrations will be high enough as to induce further warming for some time—even if emissions of greenhouse gases return to 1990 levels.
Heading off more serious climate change will require a variety of policy changes. In this paper, we produce some rough estimates for the impact on the climate due to one possible important policy change—a gradual reduction in work hours. The direct cost of a reduction in work hours is at worst very small. In standard neoclassical models, the loss of consumption due to working less is offset in large part by an increase in leisure. In fact, a reduction in work hours may increase hourly productivity or (when employment is depressed) increase the employed share of the population.2 These effects may offset aggregate income losses, with higher levels of employment having the additional effect of lowering the cost of unemployment benefits.
To the extent that working less will result in lower production, however, lower production should result in a fall in emission of greenhouse gases. In addition, there may be a shift in emission intensity per dollar of output as consumption patterns change.3 How all these different factors might interact to change projected emissions is still an open question. Further, the sensitivity of the climate to greenhouse gas emissions is subject to a wide range of uncertainty. Nevertheless, in this paper we will estimate some general rules of thumb for the climate impact of a reduction in work hours. These will depend on the emissions baseline and the response of various actors to the policy change, but are robust to varying estimates of climate sensitivity.

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1 The author would like to thank Mark Weisbrot, Sara Kozameh, Dan Beeton, and Stephan Lefebvre for editing and helpful comments. The author is an economist at the Center for Economic and Policy Research, in Washington D.C.
2 See Baker (2009) and Baker (2011).
3 For more in this topic, see Schor (2010).

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