The evolution of tasks, automation, and the carbon dioxide emissions

In this paper, we examine the macroeconomic and environmental impacts of task automation, which relies on replacing the capital stock in routine tasks. To this end, we combine an agent-based input-output model of the EU with a task-based approach to the labour market. We parameterize the latter by matching worker-level occupation data with measures of work activities from the Dictionary of Occupational Titles. We compare the effects of climate shocks that reduce labour productivity in cognitive and manual tasks with shocks that destroy firms' capital stock. The severity of shocks is task- and sector-specific. We find that each shock type affects the economy through a distinct channel. Capital shocks reduce real global GDP by 10-30% by 2100. They reduce production capacity in affected sectors. The impact of capital shocks propagates from upstream to downstream industries, amplifying output losses in sectors close to final demand. Shocks to labour productivity reduce global real GDP by about 0.2-3%, with productivity shocks in manual tasks having greater adverse economic impacts than those in cognitive tasks. Both types of shocks significantly raise mean prices in the economy. We examine whether automation can mitigate the economic impacts of climate shocks. Our study shows that automation reduces both sectoral employment and emissions while increasing economic growth, provided it raises the capital intensity of automated tasks. Automation mitigates the impact of capital shocks, but only in upstream industries where the cost of automating capital does not exceed the reduction in unit cost from automation.

The seminar series is organized by the Section Economics of Wageningen University (consisting of the groups Agricultural Economics and Rural Policy, Development Economics, Urban Economics, Environmental Economics and Natural Resources, and Economic and Environmental History).

The seminar is aiming to foster the exchange on recent topics in the field of economics. We consider contributions from all fields of economic research and invite speakers from Wageningen, the Netherlands and abroad.

The seminar is organized as a weekly lunch seminar taking place on campus. Meetings are between 12:00 and 13:00 hours. Lunch is served. 

All staff and students are welcome!