August Twile Nielsen defends his PhD thesis at the Department of Economics

Candidate:

August Twile Nielsen, Department of Economics, University of Copenhagen

Title:

Essays on The Green Transition of Manufacturing

Supervisors:

Professor Peter Birch Sørensen

Professor Jakob Roland Munch

Assessment Committee:

Professor Morten Bennedsen, Department of Economics, Copenhagen University

Professor Rikard Forslid, Department of Economics, Stockholm University

Associate Professor Reed Walker, Department of Economics, University of California, Berkeley

Summary:

This PhD dissertation consists of four independent chapters with different research questions and methods, but they all relate to a green transition of manufacturing. The dissertation sheds light on causes and consequences of the transition, thereby contributing to an increased understanding within this research field and hopefully making decision makers capable of making more informed choices.

Chapter 1 focuses on incorporating different abatement technologies in economic models. The chapter presents a new method that improves estimations of which technologies firms will use and the costs of reducing emissions.

Chapter 2 shows a descriptive analysis of manufacturing firms’ emissions intensity, measured as emissions per worker, across European countries. The analysis shows that there are small differences across countries, but large differences within industries. This insight, broadly speaking, improves the external validity of research examining aspects of the green transition in one country.

Chapter 3 examines to what extent international trade has contributed to making Danish manufacturing cleaner. Results show that offshoring reduces the aggregate Danish emission intensity of manufacturing, while import competition does not affect it. Chinese import competition on the contrary increase global emissions, while offshoring has no effect on global emissions.

Finally, chapter 4 sheds light on one aspect of possible consequences of the green transition: How are Danish workers affected by rising energy prices? The analysis finds that average worker earnings decrease modestly, but the effect varies across different types of workers: Those in manual occupations or with short education, particularly in energy intensive firms, are affected significantly, while workers with long education are barely affected.