Pollution, renewable energy sources and unemployment: evaluating the presence of an environmental trilemma

In advanced economies, the greatest obstacle to achieving the objective of reducing pollution is represented by the potential negative effects on employment. The paper aims at evaluating if the objective of reducing pollution causes job losses rendering the process of transition toward a green economy less desirable. These issues can be presented in the form of a “trilemma” or in the form of an exchange of three alternatives in the use of polluting energy sources, renewable energy sources and unemployment. It describes how pollution reduction, the use of renewable energy sources and unemployment combine together so that a rise in one trilemma variable should be traded-off with a drop of the weighted sum of the other two. The results of the investigation on 12 Eurozone countries from 2004 to 2016 validate the existence of the “trilemma” suggesting that unemployment resulting from plant dismissal can be offset through the increase in the alternative of renewable energy sources