Inequalities in wealth and opportunities have grown during the last decade. The capital of the highest ten percent is more than ten times that of the poorest ten percent, while conventional avenues for social mobility have dried up. While authorized pay imbalance data for 2020 will not be available for another two years, and the impact of government policies on disposable income will need to be carefully examined, it is reasonable to believe that the pandemic has had the most significant effect on low-educated lower-income households. This is partly due to their lower wealth, which means they have less “cushion” to weather financial shocks and are less likely to telework.
The pandemic serves as a stark reminder that the poorest households are also the ones that suffer the most from environmental deterioration. Unsustainable production and consumption habits contribute to climate change, air pollution, and the likelihood of novel zoonoses emerging due to contact between wildlife, cattle, diseases, and humans. These effects are magnified for low-income households, and their effects compound. For example, air pollution is frequently higher in impoverished neighborhoods, increasing the chance of developing comorbidities (such as cardiovascular and respiratory disorders) linked to the most severe COVID-19 infection effects.
The green recovery can alleviate both environmental deterioration and existing inequities simultaneously. The green revolution, and the profound changes it entails for our economic systems, can make our societies greener and more equitable. The Inequalities-Environment Nexus: Towards a People-Centered and Green Transition is a new paper that examines the effects of environmental degradation and environmental policies on four significant dimensions of people’s well-being: fitness, earnings and assets, job and employment quality, and safety.
How do we make sure that the transition is both green and inclusive?
Four essential components should underpin policy packages for green and inclusive growth.
First, any regressive effects of pricing carbon emissions or other environmental externalities on low-income households must be considered. A range of initiatives, including well-designed programs to recycle the excess tax income generated by such price-based measures, might lessen the probable regressive impact of pricing carbon, in addition to the importance of more extensive policy reforms to address inequality.
Second, to promote workers’ reallocation from polluting to greener sectors, skills policies, active labor market policies, and well-designed income support measures are required. A fair transition necessitates programs to assist workers in the most adversely affected industries, such as coal mining. Workers’ skills must be upgraded to find new work, and well-targeted income support measures are critical in helping them weather the storm.
Third, place-based policies will be required to facilitate the structural transformation of local economies that rely on fossil fuel extraction or carbon-intensive businesses. According to local competitive advantages, possibilities, and history, the specific policy package for an inclusive green transition varies from one region to the next. For example, resource-rich locations may face a fall in hydrocarbon extractive sectors. Still, profit from rising demand for essential minerals used in low-carbon technology (such as lithium for the batteries) Heavy-industry-specialized regions may require support in the infrastructure needed to decarbonize these industries (e.g., carbon capture, utilization, and storage facilities). Social discourse, investments, social security, and skills and education policies tailored to local requirements are critical components of these economies’ structural change.
Finally, an inclusive green transition will necessitate efficient and responsive governance. The systemic transformation required to reach the Paris Agreement’s aim and reverse environmental deterioration will necessitate alignment across various policy areas. To ensure this coherence, sound governance structures would be required. It will also be necessary to provide clear and consistent access points for civil society and citizens to participate in policy-making.
Green recovery is a tremendous problem, but it also presents a vast potential to create a more equitable and environmentally friendly society. In this endeavor, all nations are working together, and the OECD is assisting national efforts to achieve a green, inclusive, and resilient recovery through a variety of initiatives. While ongoing research focuses on the labor implications of the green low-carbon transition, including the jobs potential of a change to a resource-efficient and circular economy and the role of apprenticeships for greener economies and societies, the OECD green recovery database provides unique insights on the greenness of recovery measures. The OECD will continue to evaluate the “greenness” of recovery measures, and a dashboard will be launched later this year to track progress toward a green, inclusive, and resilient transition.
Video Courtesy: OECD Environment