Three essays on the relationship between unemployment, employment and environmental pollution: Environmental Phillips Curve and Environmental Employment Curve approaches

Global warming and climate change are a critical issues that has attracted attention in recent years. This thesis consists of three papers on the relationship between economic growth, energy consumption (renewable and non-renewable energy), unemployment, employment and environmental pollution. The first paper analyzes whether there is a trade-off relationship between unemployment and environmental quality according to the Environmental Phillips Curve (EPC) hypothesis in high-income, upper and lower middle income (HUmLmI) economies (developed and developing economies) for the period 1990-2020. In this paper, a new dynamic autoregressive distributed lag simulation approach is used. According to the empirical findings, the EPC hypothesis is not valid in the short and long run in high-income (developed) economies. However, the results support the validity of the EPC hypothesis in upper and lower middle income (developing) economies. This means that lack of decent work opportunities/high unemployment rates hinder environmental quality in high-income countries, support environmental quality in upper middle-income countries and do not improve environmental quality in lower middle-income countries. Moreover, according to these results, economic growth and fossil energy use further increase environmental degradation. On the other hand, the consumption of renewable energy sources reduces environmental pollution by -0.22, -0.54, and -1.15 in HUmLmI countries, respectively. This shows that renewable energy sources adapt to the environmental sustainability motive. In the second paper, the relationship between employment and environmental pollution is investigated and the concept of the "Environmental Employment Curve" (EEC) hypothesis is investigated by using the panel threshold estimation method in G-7 and E-7 countries. The invented function shows that there is an inverted U-shaped relationship between environmental pollution and employment. Empirical findings show that the EEC hypothesis is valid in G-7 and E-7 countries. According to the coefficient estimation, the turning point of employment at which environmental degradation starts to decrease is 66.59. This indicates that deterioration will decrease after the employment rate reaches 66.59 percent. The results show that investments in green energy transition should not necessarily lead to employment loss. Meanwhile, consumption of domestic materials and renewable energies modifies the increase in carbon emissions in G-7 and E-7 economies, while fossil fuel energies further degrade the environment in country groups. Therefore, fiscal policy that encourages research and investment in the development of renewable and clean technologies through public-private partnerships is vital. Finally, the third paper investigates the existence of an environmental employment curve (EEC) in China's main economic sectors. This study analyses the relationship between carbon emissions, economic growth, energy consumption, renewable energy consumption, and employment (industry, services, agriculture) in China from 1990-2020 using threshold autoregressive regression estimation. According to the EEC hypothesis, there is an inverted U-shaped relationship between environmental pollution and employment rate. The empirical results show that the EEC hypothesis seems valid in China. Moreover, the analysis of the effect of employment on environmental pollution in the three main sectors of China (industry, services, and agriculture) shows that the EEC hypothesis cannot be rejected in the industrial and agricultural sectors. The empirical results show that a 1% increase in energy consumption leads to a 0.92% increase in carbon emissions, while the using renewable energy leads to a 0.18% decrease. These results show that investments in green energy transition do not lead to employment losses. Therefore, it is important to support policies that encourage investments in renewable and clean technologies, promote research in renewable energy-related institutions, and support public-private partnerships. Furthermore, to create jobs without compromising the environment or welfare, policymakers should encourage the introduction of alternative technologies that are less polluting or do not produce carbon emissions.