Greening Colombia’s Energy: The Future of Jobs and Pensions

This paper evaluates the effects of Colombia's transition to a low-carbon economy on employment and pensions. Utilizing a three-stage analysis integrating national energy scenarios, an input-output model, and a pension microsimulation model, we quantify the green transition's effects on employment and pensions. Our results indicate a net reduction in employment requirements, more pronounced without specific transition policies (2.16\% long-run reduction) compared to a scenario with active transition measures (0.4\% reduction). Job losses are concentrated in high-carbon sectors (oil, coal), with industry and services also affected through intersectoral linkages. Conversely, renewable energy sectors show employment gains. The projected employment changes have a modest negative impact on the pension system. Contributory pension coverage sees a slight decrease, and fiscal pressure and benefits inequality exhibit minimal changes. These limited effects result from the relatively small employment shocks and stringent pension eligibility criteria.