This paper investigates whether standard climate tax shift scenarios cause the same labour market patterns as documented by the job polarization literature, namely a relative decline in employment for medium skilled workers compared to other skill types. To that end, we deploy a CGE model calibrated to the Belgian economy, with special focus on the treatment of heterogenous labour demand in a range of both 'dirty' and 'clean' sectors and on integrating key behavioural and public finance mechanisms from the Euromod micro-simulation model. We find that for a wide range of parameter values and several stylized tax shift scenarios job polarization patterns are reproduced. The intensity of this phenomenon depends, among others, on the substitutability of domestic and international products, on that of skill types with energy in dirty sectors and between skill types in clean sectors. Further research should investigate the ability of modulated, feasible tax shift scenarios can overturn the job polarization result.
