Climate change and inequality are connected – policies need to reflect this – The Conversation

Report on Integrating Inequality Reduction into Climate Change Policy

Executive Summary

International institutions are increasingly recognizing the systemic risk posed by inequality to macroeconomic stability and effective climate action. This report, based on analysis from the French development agency (AFD) across South Africa, Colombia, Indonesia, and Mexico, argues that reducing inequality must be a central objective of climate policy to achieve the Sustainable Development Goals (SDGs). Current “just transition” frameworks often fail to embed equity at their core, leading to policies that can exacerbate existing divides. To align with SDG 10 (Reduced Inequalities) and SDG 13 (Climate Action), a fundamental shift is required towards policies that ensure equitable distribution of the benefits of the green transition, including job creation, infrastructure ownership, and fiscal measures.

Analysis of Current Green Transition Policies and SDG Misalignment

While the “just transition” is an accepted framework for building sustainable economies, its implementation frequently overlooks equity as a primary concern. This gap undermines progress on multiple SDGs, as evidenced by several key characteristics of current green transitions.

Labor Market Disparities and Green Jobs

The creation of green jobs often fails to promote SDG 8 (Decent Work and Economic Growth) and SDG 5 (Gender Equality) for all segments of the population.

• A study in Colombia revealed that new opportunities in the green economy disproportionately benefit already advantaged groups, such as university-educated urban males.
• Women, youth, and rural populations remain largely excluded, deepening existing inequalities and hindering inclusive economic growth.

Concentrated Ownership of Green Infrastructure

The ownership structure of green infrastructure projects often conflicts with the aims of SDG 7 (Affordable and Clean Energy) and SDG 10 (Reduced Inequalities).

• In South Africa, renewable energy programs have been criticized for primarily benefiting large private and multinational corporations.
• This model transfers risk to the state while keeping energy tariffs high, concentrating the financial gains of the transition away from the general public and local communities.

Inequitable Environmental Protection Policies

Top-down environmental protection policies can generate new inequalities and negatively impact local populations, working against SDG 11 (Sustainable Cities and Communities) and SDG 16 (Peace, Justice and Strong Institutions).

1. Protected Areas: The establishment of these zones can displace or restrict the livelihoods of local communities without adequate consultation or compensation.
2. Biodiversity Offsets: These mechanisms, designed to compensate for environmental damage, can fail to deliver equitable outcomes for communities affected by development projects.

Policy Recommendations for an Equitable and Sustainable Transition

To ensure climate action effectively contributes to the SDGs, inequality reduction must be a guiding principle. This requires moving beyond compensatory measures to designing policies that are inherently equitable.

Promoting Inclusive Employment and Enterprise

Targeted public policies are necessary to address labor market disparities and ensure the green transition supports SDG 8 and SDG 5.

• Skills Development: Integrate training for renewable energy and energy efficiency into technical and vocational programs, using gender-sensitive approaches tailored to local needs, as recommended in Colombia.
• Support for Small Enterprises: Provide targeted support for small and informal enterprises, which are often excluded from just energy transition plans, to enable their participation in job creation, as highlighted by evidence from South Africa.

Implementing Progressive Climate Taxation

Fiscal policies must be designed to be fair and progressive, directly contributing to SDG 1 (No Poverty) and SDG 10.

• A microsimulation study in Indonesia demonstrated that a carbon tax can be regressive, disproportionately affecting lower-middle-income households.
• However, when tax revenues are recycled through targeted cash transfers to low-income and energy-poor households, the policy becomes progressive, reducing both poverty and inequality. This shows that the use of proceeds is critical to ensuring equity.

Democratizing Ownership of the Energy Transition

Fostering community and user-owned models is key to making the energy transition inclusive and advancing SDG 7 and SDG 11.

• Community-owned solar installations, worker share ownership schemes, and multi-stakeholder cooperatives can ensure that the benefits of renewable infrastructure are shared locally.
• An example from Río Lagartos, Mexico, where a local fishing cooperative invested in a solar-powered ice machine, demonstrates how democratized ownership can cut costs and boost local incomes.

Conclusion and Path Forward

Embedding the reduction of inequality (SDG 10) into climate action (SDG 13) is essential for a meaningful and sustainable transformation. The weaknesses and best practices identified in this analysis provide a guide for policymakers to design more equitable environmental policies. The recent recommendation by a G20 committee to create a global panel on inequality signals a growing international commitment to this agenda, reinforcing the importance of SDG 17 (Partnerships for the Goals) in achieving a just and sustainable future for all.

Analysis of SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 10: Reduced Inequalities

  The article’s central theme is the link between climate action and inequality. It explicitly states, “An increasingly strong case is being made to bring inequality into discussions about climate change,” and argues that “reducing inequality should be a guiding principle in decisions on climate change.” It discusses how green transitions can deepen existing divides if not designed equitably, affecting different income groups, women, youth, and rural populations.

• SDG 13: Climate Action

  The entire article is framed within the context of climate change and the “green transition.” It discusses national climate strategies, such as South Africa’s just transition framework and Mexico’s NDC 3.0, and policies like carbon taxes, which are direct measures to combat climate change and its impacts.

• SDG 8: Decent Work and Economic Growth

  The article extensively discusses “green jobs,” questioning their quality and accessibility. It highlights that these jobs often benefit already advantaged groups (e.g., “university-educated urban men”) while excluding others. It also addresses the need to support small enterprises, which are often excluded from “just energy transition plans,” to foster inclusive job creation.

• SDG 7: Affordable and Clean Energy

  The text examines the ownership and benefits of “green infrastructures, such as solar parks, wind farms, smart grids, and storage systems.” It critiques models where ownership is concentrated in large corporations, leading to high electricity tariffs, and promotes community-owned renewable energy models, like the solar-powered ice machine in Mexico, as a way to ensure the benefits are shared more broadly.

• SDG 5: Gender Equality

  The article specifically points out gender disparities in the green transition. The research in Colombia is cited as showing that women, along with youth and rural populations, “remain largely excluded” from the opportunities created by green jobs, highlighting a direct connection to gender equality and economic empowerment.

• SDG 15: Life on Land

  The article mentions environmental protection policies such as “protected areas” and “biodiversity offsets.” It notes that these policies, aimed at nature conservation, can “generate inequalities as they are often designed top-down,” causing local communities to lose out, thereby linking conservation efforts to social equity.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 10: Reduced Inequalities

  • Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status. The article’s focus on the exclusion of “Women, youth and rural populations” from green jobs directly relates to this target.
  • Target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality. The discussion on carbon taxes in Indonesia and using the revenue for “targeted cash transfers to low-income and energy-poor households” is a direct example of implementing fiscal policy to achieve greater equality.

• SDG 13: Climate Action

  • Target 13.2: Integrate climate change measures into national policies, strategies and planning. The article mentions that countries like South Africa and Mexico are “progressively incorporating just transition principles into their national climate strategies,” such as South Africa’s 2022 just transition framework and Mexico’s upcoming NDC 3.0.

• SDG 8: Decent Work and Economic Growth

  • Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises. The article highlights the exclusion of small enterprises in South Africa from just energy transition plans and the need for support so they “can contribute to job creation.”
  • Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value. The critique that green jobs are not accessible to all and benefit mainly advantaged groups points to the challenge of achieving this target within the green economy.

• SDG 7: Affordable and Clean Energy

  • Target 7.1: By 2030, ensure universal access to affordable, reliable and modern energy services. The article’s concern that a profit-driven renewable energy program in South Africa “kept electricity tariffs high” connects to the affordability aspect of this target.
  • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article discusses renewable infrastructure like “solar parks, wind farms” and community-owned models like a “solar-powered ice machine,” which are central to achieving this target.

• SDG 5: Gender Equality

  • Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership in political, economic and public life. The finding from Colombia that women are “largely excluded” from green job opportunities directly addresses the need for equal participation in economic life.

• SDG 15: Life on Land

  • Target 15.1: By 2020, ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems and their services. The mention of policies like “protected areas” and “biodiversity offsets” with the “goal of nature conservation and the preservation of ecosystems” directly relates to this target.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• For SDG 10 (Reduced Inequalities)

  • Distributional impact of environmental taxes: The article mentions a microsimulation study in Indonesia that analyzed how a carbon tax would “increase costs for lower-middle income households.” This type of analysis serves as an indicator to measure the effect of fiscal policies on different income groups.
  • Allocation of tax revenues: The use of revenues from a carbon tax for “targeted cash transfers to low-income and energy-poor households” is a measurable indicator of how fiscal policy is being used to mitigate inequality.

• For SDG 8 (Decent Work and Economic Growth)

  • Demographic breakdown of green job beneficiaries: The research in Colombia, which identified that green jobs primarily benefit “university-educated urban men” while excluding “Women, youth and rural populations,” implies using employment data disaggregated by gender, age, education level, and geographic location as an indicator.
  • Inclusion of small enterprises in transition plans: The article notes that small enterprises in South Africa are “excluded from just energy transition plans.” The number or percentage of small enterprises included in and benefiting from such plans could be a direct indicator of progress.

• For SDG 7 (Affordable and Clean Energy)

  • Ownership structure of renewable energy assets: The article contrasts ownership by “large private and multinational companies” with “community and user-owned models.” The proportion of renewable energy capacity owned by communities, cooperatives, or public entities versus private corporations is a key indicator of an inclusive energy transition.
  • Electricity tariffs: The mention of a program that “kept electricity tariffs high” implies that the price of electricity for end-users is a critical indicator for measuring the affordability of clean energy.

• For SDG 5 (Gender Equality)

  • Proportion of women in green sector employment: The finding that women are “largely excluded” from green jobs in Colombia implies that the share of women employed in the renewable energy, energy efficiency, and sustainability sectors is a key indicator for measuring gender equality in the green transition.

4. Summary Table of SDGs, Targets, and Indicators

Source: theconversation.com