Climate Change and a Just Transition to the Future of Work

• Published date: 01 December 2023
• Author: Stephen Kim Park,Norman D. Bishara
• Date: 01 December 2023
• DOI: http://doi.org/10.1111/ablj.12235

American Business Law Journal

Volume 60, Issue 4, 701–748, Winter 2023

Climate Change and a Just

Transition to the Future of Work

Stephen Kim Park*and Norman D. Bishara**

Rapidly growing concerns about the adverse effects of climate change are

prompting a re-thinking of how companies view their strategies and operations

and spurring legal and regulatory responses around the world. The overarching

objective of these efforts is to facilitate and accelerate the transition to a more

sustainable economy. The green transition will have substantial distributional

and structural implications for workers and the workplace across companies and

economic sectors. Indeed, the future of work will be significantly shaped by

climate change. However, relatively scant scholarly attention has been devoted to

the forward-looking legal implications of climate change for work. Similarly,

legal scholars writing on climate change have largely neglected the laws

governing employment. This article seeks to help fill that gap. How can

companies, workers, and society respond to the green transition in a manner that

enables better jobs, a safe and stable workplace, and more resilient companies?

To answer this question, this article draws on the theory of just transition, which

is rooted in environmental justice and labor rights. We offer an interpretation

and application of just transition that expands its scope to serve as a blueprint

*Associate Professor of Business Law, University of Connecticut.

**Professor of Business Law and Ethics, Stephen M. Ross School of Business at the Univer-

sity of Michigan.

Prior versions of this article were presente d at the Business Ethics and the Future of

Work symposium (hosted by the Center f or Ethics, Diversity, and Workplace Culture at

the Fox School of Business, Temple University an d the Center for Legal Studies and

Business Ethics at the Spe ars School of Business, Okl ahoma State University, and the

American Business L aw Journal), the Wharton School of the Uni versity of Pennsylvania,

the Canadian Academy of L egal Studies in Busine ss annual conference, an d the

Academy of Legal Studie s in Business annual conf erence. Special thanks to Di mitris

Stevis, Leora Eisen stadt, Elizabeth Kenn edy, Inara Scott, and Matt Bodie, as wel l as

friends and family, for their thoughtful f eedback and encouragement . All errors and

omissions are our own.

©2023 The Authors.

American Business Law Journal ©2023 Academy of Legal Studies in Business.

701

for ethical business conduct and legal reform to improve the world of work and

the lives of workers.

INTRODUCTION

The effects of climate change on all aspects of society are unparalleled

both in magnitude and scope.

1

Its shocks and stresses on the natural

environment pose short- and long-term risks to commercial activity and

business that will propagate across different industries and markets.

2

It

has prompted a re-thinking of how companies view their strategies and

operations.

3

Concern about the disruptive effects of climate change is

spurring legal and regulatory responses across the global economy.

4

The

overarching objective of these diverse legal and regulatory efforts is to

accelerate the transition to a more sustainable economy, and ultimately a

1

INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE,CLIMATE CHANGE 2022: IMPACTS,ADAPTA-

TION AND VULNERABILITY.CONTRIBUTION OF WORKING GROUP II TO THE SIXTH ASSESSMENT

REPORT OF THE INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE 44–45 (2022), https://

report.ipcc.ch/ar6/wg2/IPCC_AR6_WGII_FullReport.pdf [hereinafter IPCC AR6] (sum-

marizing the impacts of climate change on the environment, human activit y, and the

global economy).

2

See Christopher Flavelle, ClimateChangeCouldCutWorld Economy by $23 Trillion in

2050, Insurance Giant Warns,N.Y.T

IMES (Apr. 22, 2021), https://www.nytimes.com/2021/

04/22/climate/climate-change-economy.html (reporting on a study that predicted an

eleven to fourteen percent reduction in global gross domestic product if climate change

is unaddressed).

3

See, e.g., Akshat Rathi, Climate Is Forcing the Most Risk-Aware Industry to Reinvent Itself,

BLOOMBERG (Jan. 24, 2023), https://www.bloomberg.com/news/articles/2023-01-24/climate-is-

forcing-the-most-risk-aware-industry-to-reinvent-itself (describing changes in the insurance

industry).

4

See European Union, Regulation (EU) 2021/1119 of the European Parliament and of

the Council of 30 June 2021 establishing the framework for achieving climate neutral-

ity and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Cli-

mate Law’) (June 30, 2021), https://eur-lex.europa.eu/legal-content/ EN/TXT/?uri=

CELEX:32021R1119 (legally binding the European Union to a target of achieving net

zero greenhouse gas emissions by 2050); U.S. Department of Energy, Office of Policy,

The Inflation Reduction Act Drives Significant Emissions Reductions and Positions America to

Reach Our Climate Goals (DOE/OP-0018, Aug. 2022), https://www.energy.gov/sites/

default/files/2022-08/8.18%20InflationReductionAct_Factsheet_Final.pdf (characteriz-

ing the cumulative effects of the Inflation Reduction Act and the Bipartisan Infrastruc-

ture Law as leading to a forty percent reduction in greenhouse gas emissions by 2030

relative to 2005 levels).

702 Vol. 60 / American Business Law Journal

net zero emissions economy,

5

while driving a transition away from

unsustainable models of business.

6

These collective efforts constitute the

green transition.

Notwithstanding the broad and substantial impacts of climate change on

workers and the workplace, there has been relatively scant attention on the

forward-looking impacts of climate change on labor markets, workers, and

the workplace from a legal perspective. This lack of focus also means that

scholars, and particularly business law scholars, have not adequately consid-

ered the legal implications and opportunities for workplace law reform in

the context of climate change. This article seeks to start bridging that gap.

The future of work will be fundamentally altered by climate change,

with some impacts falling disproportionally on certain vulnerable groups

and workers in the most impacted industries.

7

One study finds that more

than 800 million jobs worldwide (i.e., about one-quarter of the global

workforce) “are highly vulnerable to both climate extremes and eco-

nomic transition impacts.”

8

Studies determine the costs attributable to

5

A net zero economy is one in which greenhouse gas emissions are reduced to the greatest

extent possible and any remaining emissions are counterbalanced through removal from the

atmosphere. Kelly Levin & Chantal Davis, What Does “Net-Zero Emissions”Mean? 8 Common

Questions, Answered, World Resource Institute (Mar. 20, 2023), https://www.wri.org/insights/net-

zero-ghg-emissions-questions-answered.See also Sam Fankhauser, Stephen M. Smith, Myles

Allen, Kaya Axelsson, Thomas Hale, Cameron Hepburn, J. Michael Kendall, Radhika Khosla,

Javier Lezaun, Eli Mitchell-Larson, Michael Obersteiner, Lavanya Rajamani, Rosalind Rickaby,

Nathalie Seddon & Thom Wetzer, The Meaning of Net Zero and How to Get It Right,12N

ATURE

CLIMATE CHANGE 15 (2022), https://doi.org/10.1038/s41558-021-01245-w (analyzing the drivers

for operationalizing net zero emissions through social, political, and economic systems). The

transformation of the global economy to net zero is embedded in international frameworks

addressing climate change such as the Paris Agreement and the Sustainable Development Goals

(SDGs). See IPCC AR6, supra note 1, at 173.

6

See, e.g., Exec. Order No. 14008, 86 Fed. Reg. 7619 (Jan. 27, 2021) (“Responding to the

climate crisis will require both significant short-term global reductions in greenhouse gas

emissions and net-zero global emissions by mid-century or before.”); see also Daniel

R. Cahoy, Stephen Kim Park & Inara Scott, The Changing Faces of Business Law and Sustain-

ability, 59 AM.BUS. L.J. 613 (2022).

7

See, e.g., State of California, Legislative Analyst’s Office, Climate Change and Jobs Across

California (Apr. 5, 2022), https://lao.ca.gov/Publications/Report/4587 (listing examples of

increased hazards to certain occupations and industries due to climate change and extreme

weather).

8

Deloitte, Work Toward Net Zero: The Rise of the Green Collar Workforce in a Just Transition (Nov.

2022), at 8, https://www.deloitte.com/content/dam/assets-shared/legacy/docs/Deloitte_Work_

toward_net_zero_Nov22.pdf.

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