Documents Inter-American Development Bank, Washington, DC 4 results

"This paper introduces the AI Generated Index of Occupational Exposure (GENOE), a novel measure quantifying the potential impact of artificial intelligence on occupations and their associated tasks. Our methodology employs synthetic AI surveys, leveraging large language models to conduct expert-like assessments. This approach allows for a more holistic evaluation of job replacement likelihood, reducing assumptions about the mechanisms through which AI innovations could replace job tasks and skills. Our findings reveal that the average occupa tional exposure to AI is 0.28 within one year, increasing to 0.38 and 0.44 over the five- and 10-year horizons, respectively. We also show evidence that the index not only considers task automation, but also contextual factors such as social and ethical considerations and regulatory constraints that may affect the likelihood of replacement. After calibrating the index with labor market microdata from the United States and Mexico, we show that approximately 43 million and 16 million jobs, respectively, are highly exposed to AI within a one-year time horizon. The GENOE index provides valuable insights for policymakers, employers, and workers, offering a data-driven foundation for strategic workforce planning and adaptation in the face of rapid technological change."

"Europe faces challenges reminiscent of Latin American financial crises. The failure of recent liquidity support to normalize the situation in Europe suggests the need to refocus the policy debate on fundamentals: structural reform for growth and, where needed, restructuring to resolve banking crises and the debt overhang. Latin America's experience yields relevant policy lessons for Europe on those fronts except concerning the use of sharp real devaluations to spearhead recovery: euro-zone countries following suit by reintroducing devalued national currencies would invite catastrophe. Despite this constraint, Europe stands a better chance of navigating the path out of the crisis because it has cooperative mechanisms unavailable in Latin America. European cooperation can provide support for orderly crisis resolution as well as growth and competitiveness within the currency union fold, to the benefit of all members. However, the path is uncharted, and successful regional cooperation will require innovation and political will."

"Countries have pledged to stabilize global warming at a 1.5 to 2°C increase. Either target requires reaching net zero emissions before the end of the century, which implies a major transformation of the economic system. This paper reviews the literature on how policymakers can design climate policies and their Nationally Determined Contributions (NDCs) to reach zero-net emissions before the end of the century in a socially and politically-acceptable manner. To get the ambition right, policymakers can use sectoral roadmaps with targets and indicators that track progress towards zero emissions (e.g. regarding renewable power or reforestation). Indeed, monitoring economy-wide emissions reductions alone would not ensure that short-term action contributes meaningfully to the long-term decarbonization goal. To get the political economy right, climate policies can be designed so that they contribute to non-climate objectives and create coalitions of supporters. For instance, revenues from carbon taxes can fund social assistance and infrastructure investment, while reducing tax evasion and informality. To minimize social and economic disruptions and avoid stranded assets, policymakers can start with a low carbon price level and use complementary policies. Designed at the sector level, complementary policies such as performance standards or feebates for cars, building norms, or moratoriums on new coal power plants can be negotiated in partnership with local stakeholders and trigger a transition to zero carbon without creating disruptive stranded assets."

"In the wake of a robust economic recovery from the COVID-19 pandemic in 2021 and 2022, Latin America and the Caribbean (LAC) now face a less promising growth outlook for 2024, with slowing employment growth and rising concerns over inflation. In this context, climate change is increasingly affecting labor markets. As global temperatures continue to rise due to human-induced greenhouse gas emissions, the negative effects on employment, labor conditions, and productivity pose significant threats to the region's workforce. However, amidst these challenges lies an opportunity for strategic intervention through effective labor market policies. By embracing adaptation and mitigation strategies, such policies can not only mitigate the adverse impacts of climate change on employment but also catalyze job creation, skills development, and economic resilience. Decarbonization policies, while potentially disrupting traditional employment sectors, present avenues for transitioning to a green economy with sustainable job opportunities. Central to this endeavor is ensuring a just transition that protects vulnerable populations and fosters social cohesion. This paper proposes an analytical framework to understand the mechanisms through which climate change affects labor markets and identifies policy options to address these challenges. By integrating environmental goals into labor market policies, countries in the Latin America and the Caribbean region can simultaneously pursue adaptation, mitigation, and socioeconomic development agendas contributing to a more sustainable and equitable future."