We live in a world where the wealthiest 1% of people hold more than half the world’s wealth. In fact, that “elite group” holds more wealth than the entire bottom 90% — i.e., 6.9 billion people. In the last couple of years, extreme inequality has been accelerated by the COVID-19 pandemic and tax and fiscal policies that benefit the rich. Alarmingly, there is another oft looked over factor at play that is promoting such great inequality: climate change.
The relationship between poverty and climate change is effectively summarized here: “The poorest and marginalized populations (such as indigenous peoples) are least responsible for past greenhouse gas emissions, most vulnerable to climate change, and possess [the] least resources to adapt to extreme climate events and rising temperatures.” There will be nothing equitable about continued climate change. As economist Joseph Stiglitz notes, environmental decline not only hurts poor people around the globe, it pushes even more people into poverty. The poor are disproportionately dependent on natural resources, with many being subsistence farmers. For example, “forests [in the Amazon] contribute to 90 percent of the livelihood of those that live in extreme poverty.” When nature takes a hit, billions around the globe do. These people then cannot afford things to minimize the effects of these environmental harms, such as moving to less-affected areas or buying technology to mitigate impacts (as the rich will inevitably do). The poor must also rely more heavily on their surrounding environments to survive, meaning they will use up more nearby environmental resources to build and heat their homes and feed themselves (since cleaner alternatives are out of reach). That is not to say the poor should be blamed for this, rather, the more people we pull out of poverty, the better outcomes will be for both humans and the environment.
Identifying the link between inequality and climate change is one thing but taking action to combat it is a great challenge. Tackling this problem will require a ‘just transition’ to a new economic system globally, and the purpose of this blog is to discuss what such a transition entails and what it will take for us to get there.
An Equitable Path- Just Transition
A just transition to a more sustainable world is defined as a shift that “ensures environmental sustainability as well as decent work, social inclusion and poverty eradication.” This focus is vital as shifting the global economy will greatly rearrange the labor market. A just transition purports to ensure that the new labor market will better provide opportunities to all; such a transition aims to smooth out the growing pains of reworking the global economy towards something that can be sustained.
Four principles drive action towards a just transition:
- Economic development: Action must promote long-term economic success and feasibility.
- Locally designed: A just transition must start at the local level to deal with acute problems. There are no one-size-fits-all solutions.
- Fair income and a decent life: Workers must be provided opportunities to jobs that provide sufficient wages and an ability to survive above poverty.
- Pollution reduction measures: Industries that were previously responsible for pollution and unsustainable activities must shift to industries that are significantly better for the environment.
Promoting Decarbonization and Minimizing Pollution
It is no secret that decarbonization of the global economy is essential for building a sustainable future. Clean energy sources must replace the fossil fuel industry if we aspire to combat climate change. Issues of air pollution, water usage and pollution, waste, deforestation, and toxic chemicals all pose environmental problems that we will need to solve. Not only are decarbonization and pollution reduction measures essential actions of a just transition, policymakers and investors must also be aware of financial systems in place that support fossil fuels and other unsustainable business practices. Just as unsustainable businesses must rework business models to those that can be sustainable, investors must follow by supporting companies that can coexist with the environment. Policymakers also must promote measures that will help sustainable industries and disincentivize unsustainable industries.
Decent Work Amid Labor Market Shifts
The United Nations Framework Convention on Climate Change identifies four ways in which jobs will change through a sustainable transition: job creation, job substitution, job elimination, and job transformation/redefinition. Job creation and elimination are inevitable in the sustainable economic shift, but the other two types of change also play large roles. Job substitution constitutes replacing unsustainable jobs to more sustainable ones in a related field/industry. Job transformation consists of reworking existing jobs, meaning that a worker may stay with the same employer, but their duties will shift. Businesses that approach these economic opportunities with a purpose-driven, worker-oriented approach will aid in driving better human-focused outcomes.
Italian energy producer Enel, which is a member of the University of Pittsburgh Center for Sustainable Business that I direct, provides a good example of a business that considered the needs of their workers when the firm repurposed 22 power plants. When Enel decided to undertake this change, they involved labor unions in the process from the start. Enel’s plan for their labor force had a few key parts. First, they supported retirement programs for older workers that did not want to retrain. Enel then aimed to replace the jobs of the retirees with young workers whom they trained for clean-energy related jobs, showing an example of the job substitution process. Enel promoted a program allowing for relocation of workers to areas that needed clean-energy workers. They also agreed to keep worker unions informed on all major decisions and committed to further worker skills training, job transformations, and continued opportunities for worker relocation, both in their company position and geographically. Enel’s concern for the outcomes of workers shows what it takes for companies to improve their environmental footprint and help their workers simultaneously.
The International Labor Organization provides its Four Pillars of the Decent Work Agenda as it focuses in shaping a new labor market. Social dialogue, social protection, rights at work, and employment are the four areas that are identified as vital to a successful economic shift. A society that is concerned with the just transition will promote open dialogue on worker issues and provide them with protections both in the workplace and for the unemployed. With such a heavy worker-focus, the just transition should be viewed as much as a labor movement as it is an environmental movement. Both elements must come together if we want to build a sustainable and effective economy. Therefore, the just transition comes at the confluence of an environmental view and a labor view. Governments, NGOs, and businesses alike have a role in supporting workers through these changes.
While reworking existing industries and jobs is a big part of the just transition, people in less developed countries cannot be overlooked. The United Nations identifies Inclusive and Sustainable Industrial Development as a key focus area going forward. Providing opportunities to countries lacking in existing industry is just as important as retooling industry in industrialized countries. Developing countries present an opportunity to start from scratch, meaning that sustainable activities can be developed independently, providing opportunities to pull more people out of poverty.
Centralized Policymaking to Support Workers and Economic Development
While localized action is a key principle of a just transition, centralized governments need to be involved at a policy level. They are the institutions with sufficient resources to make the big and expensive changes that we need. A just transition will require large infrastructure improvements to convert unsustainable industries; this area will certainly need government funding. Social programs such as healthcare and secure income programs that help to support workers caught up in this economic shift are also important and should be provided by governments. Worker training is important in giving workers the skills they need to work in new industries that will arise. Skills training and education must be promoted by governmental policy to ensure that the existing workforce as well as the future workforce are able to function within a changing job market. Politicians must listen to their citizens to understand what these people need from their government to survive this economic shift. All of these measures are supported by the International Labor Organization as necessary actions to support workers during the just transition. In the examples of a successful transition, a key factor was governments listening to what their citizens needed to be able to survive the hardships associated with economic shifts. Citizens must make their needs known and governments have the responsibility to act on those needs.
Regional Actions: Cause for Optimism
While a just transition is no easy feat, there are reasons to believe the movement can find success. The Just Transition Fund, an American NGO, aims to smooth out the social and economic changes associated with moving away from coal as an energy source. They are active in over 30 U.S. states, with much of their efforts focused on Appalachia, a mountainous region that has been a huge coal producer. In this region, the organization has taken actions such as installing broadband internet cables, cleaning up and reclaiming the land surrounding abandoned mines, promoting solar energy ‘farms’, providing support for those facing coal-related respiratory illnesses, and spreading awareness of the issues facing former coal-producing regions to garner more support. Additionally, the Center for Sustainable Business has undertaken research on developing cleaner economic development practices in the same region. The Marshall Plan for Middle America Roadmap “aims to build a regional, multi-sectoral coalition of stakeholders to drive investment in infrastructure and energy diversification that will catalyze more equitable economic recovery while laying a foundation for the Ohio Valley (including Upper Appalachia) to be a global leader in cleaner energy resources and circular economy practices.” The Just Transition Fund and the Marshall Plan show that funding and expert, region-specific knowledge can come together as a force for change.
As far as direct governmental action on the just transition, Spain is a country of note. In 1990, Spain had 45,000 coal miners; today, it has less than 1,700. Such a reduction is a result of lower coal demand in Europe, and the economic and social effects of this shift caused Spain to implement a just transition strategy. Under the plan, the Spanish government set aside over $250 million to reduce the negative effects for those working in the coal industry and to improve environmental health of regions impacted by coal mining. Key provisions of this plan include early retirement pensions for miners over 48, training programs to allow miners to find new jobs, and active environmental cleaning efforts. Spain provides an example of a centralized government devoting large amounts money and resources to promote a just transition; this is a blueprint for other countries to follow going forward. Denmark’s wind power industry provides another good example of both nationalized and business action working towards a just transition. With pro-wind energy policies, Denmark was able to become a world leader in energy production from wind turbines. The clean energy source meets 42% of Denmark’s energy needs and employs over 31,000 people.
While NGOs and governments both play roles in the just transition, some examples rely on action by communities. In a recent study that examined 245 Indigenous reserves in the Amazon, researchers from the University of San Diego and Columbia University found that Indigenous peoples were overwhelmingly successful at curbing deforestation, given that these people were granted full land rights over their territories. Researchers also found that Amazonian Indigenous peoples were much less successful at preservation when these rights were not granted. For the Brazilian government, granting property rights to Indigenous tribes and then leaving them be is a valid strategy towards curbing deforestation of the world’s largest rainforest. Not only is this a win for the planet’s health, but it is also a win for these underrepresented peoples that now legally own their ancestral homelands. In this example of a just transition, retooling industries is not the focus, but rather it is propping up those who rely on the environment to survive, and therefore are willing and able to protect it. Further research by the World Resource Institute backs up the claim that Indigenous peoples are quite successful at protecting wildlands. This example illustrates just one way communities can act to promote a just transition at the local level.
Ending climate change cannot be undertaken without a focus on how people will be affected. It is no easy problem to tackle, but a just transition provides a framework towards improving the lives of billions and ensuring the Earth’s long-term livability. The just transition is both a labor and an environmental movement and needs to include elements of both to engineer a more effective and healthy global economy. In this new system, citizens must be prioritized over often self-interested business voices. People should be the primary beneficiary of the new economic system, not corporations. With governments providing the policy-making role, citizens of democratic countries can help drive the just transition by supporting politicians with pro-labor and workers’ rights agendas, as well as ones who support social programs and infrastructure spending. This is where community action meets governmental action as forces working towards a just transition. Finally, businesses must listen to and support their workers as business models are reworked, and these firms must be willing to take the necessary action to allow their workforce to survive and thrive in the face of great changes. With the collective action of communities, NGOs, governments, and businesses, we can build an economic system that benefits people and the environment alike.
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Volume 2, Number 2. Copyright © CB Bhattacharya, 2022. All rights reserved. Research assistance for this blog was provided by Nathan Dobb.