Is Working from Home Good for the Environment? Evidence from Satellite Images

Abstract

A significantly higher share of the U.S. workforce works from home after the COVID pandemic. As society heatedly debates whether employees should return to the office, one critical question is how working from home affects the environment. One major benefit of working from home is the elimination of the daily commute to and from the office, potentially cutting greenhouse gas emissions. However, employees may increase non-work-related trips and energy use in their homes while working from home. This study uses workplace flexibility data from the U.S. Census Bureau and high-resolution satellite images of greenhouse gases to examine the environmental impact of flexible work arrangements after the pandemic. Inconsistent with the predictions of prior research that remote work cuts carbon emissions, we do not find a statistically significant decrease in CO2 emissions in metropolitan areas with more people working from home. However, we find that metropolitan areas with more people working from home have significantly lower NO2 emissions, which can be produced by traffic jams. Overall, these findings suggest that though working from home does not significantly reduce carbon emissions, flexible workplace arrangements still have a positive impact on the environment by reducing NO2, a major environmental pollutant and an indirect greenhouse gas that contributes to the greenhouse effect through interacting with other potent greenhouse gases.

Keywords: greenhouse gas emissions, climate change, working from home

JEL Classification: O13, Q53, Q54