Leaving no one behind in the race against climate change

A just transition

May 20244 min readClimate FinanceESG, Impact, Emerging Markets

Ensuring inclusivity in the fight against climate change

The urgency of addressing climate change has never been more apparent. As we witness the consequences of our past actions through extreme weather events, rising sea levels, and dwindling natural resources, it becomes clear that we must transition towards a more sustainable future. But it should be a just transition, fair and inclusive, and not at the expense of vulnerable communities, leaving no one behind. The transition should not exacerbate existing social and economic inequalities but rather work towards their reduction. To achieve this, it is essential for us to recognize and consider multiple perspectives and factors.

Unveiling the past: Historical contributions to global, cumulative GHG emissions

The industrial revolution and subsequent decades of unchecked growth have led to a massive accumulation of atmospheric greenhouse gases (GHG) and this “GHG stock” continues to heat the planet. Should the responsibility for the climate crisis therefore be evenly distributed among all nations? Historically, developed countries, driven by the pursuit of progress and economic prosperity, have contributed the most to global emissions, about 3/4 in the period from 1850-2021. The legacy of their carbon-intensive development has resulted in an imbalance that perpetuates climate injustice. The top three largest historical contributors to cumulative GHG emissions are USA (cca 20%) followed by China (cca 11%) and Russia (cca7%).

Understanding the divide:

GHG emissions per capita and production-based vs consumption-based GHG emissions

Today, global average emissions stand at approximately 4.4 tonnes per capita. The 1.5ºC path, stemming from the Paris Agreement, assumes the latter to be halved by 2030. However, upon closer analysis at the country level, significant disparities emerge, revealing a vastly different picture. On one hand there are major oil producing countries (less populated though) whose GHG/capita nowadays reach as high as 77 tCO₂/capita (e.g. Qatar, Kuwait, UAE).

Among the group of more populous countries, Australia, Canada and USA emerge as the top per capita ranging from 15-17 tCO₂. On the opposite end of the spectrum, countries like India exhibit emissions of only 1.7 tCO₂/capita, while numerous African countries have emissions below 1 tCO₂/capita. To add complexity – emissions mentioned earlier are solely based on production within a country (production-based) and do not factor in the emissions associated with the goods and services consumed within that country (consumption-based, adjusted for trade).

It is worth noting that these two alternative GHG accounting approaches often reveal higher emissions for developed countries compared to developing ones. To showcase, Switzerland’s consumption-based emissions are 3 times higher compared to production-based ones. It is however important to recognize consumption-based emissions are higher, but these very same consumption patterns and high living standards sustain a system that outsources emissions-intensive production to developing countries.

Consequently, this dynamic contributes to developing countries now exhibiting higher production-based emissions due to industrial activities. Additional research indicates³ that the lower-income half of the world's population is projected to emit significantly less than the 1.5°C-aligned threshold by 2030. In contrast, the wealthiest 1% and 10% are anticipated to surpass this threshold by a staggering 30-fold and 9-fold respectively. Surprisingly, in order to attain this target, the richest 1% would need to decrease their emissions by approximately 97% compared to present levels.

The interconnectedness of climate change and poverty

Climate change and poverty are inseparably linked, creating a vicious cycle that disproportionately affects the most vulnerable. Low-income communities, often lack resources and political influence, bear the burden of climate-related disasters. Their homes become more susceptible to flooding, their neighborhoods are exposed to toxic pollutants and their livelihoods are severely disrupted by extreme weather events. The pursuit of a just transition necessitates targeted efforts to bridge this gap and promote social equity. This entails facilitating the active participation of marginalized communities in decision-making processes, fostering their resilience through access to education and healthcare, and recognizing the importance of indigenous knowledge in sustainable practices. By integrating traditional wisdom with modern innovations, we can create more holistic and effective solutions that benefit both people and the planet. Through embracing a just transition, we can empower communities, granting them fair and equal access to green jobs, clean energy, and sustainable infrastructure. In doing so, we can effectively tackle climate change while also combating poverty, fostering conscientious decision-making, and rectifying historical injustices.

A green and fair transition is possible

In the race against climate change, we must remember that the finish line is not just a greener world but a fairer one too. A just transition ensures that we leave no one behind, fostering inclusivity, and promoting social equity while striving for environmental sustainability. It's not just about saving the Earth; it's about saving ourselves and safeguarding the future for generations to come.