How to tackle the climate crisis without creating a social crisis

In Dubai, for the first time in the history of COP, members of the UNFCCC will discuss a Just Transition Work Programme. But what does “just transition” really mean?
How to tackle the climate crisis without creating a social crisis
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2023 is on track for being the hottest year ever recorded. Increasing droughts, wildfires and floods are further evidence of the acceleration of climate change.

Despite the clear evidence of a climate crisis countries are not on track to meet the UN 1.5°C target. As COP28 opens in Dubai in a few weeks’ time, millions of people will be urging world leaders to make bold decisions to save our planet and secure the lives of current and future generations.  

Around the world, workers and families are at the front line of climate change, biodiversity loss and pollution.  

People are affected not only by climate change but also by the impacts of climate action. The green transition requires restructuring economies and radical shifts in some sectors to move to carbon neutrality. If not designed and implemented properly, mitigation and adaptation policies could significantly widen inequalities, within and between countries.

More on the Forum Network: Ending Fossil Fuel Subsidies: the politics of saving the planet by Director | Author, The Policy Practice | Ending Fossil Fuel Subsidies: the politics of saving the planet

To have any chance of averting catastrophic climate change, fossil fuel subsidies need to be eliminated. However, if fossil fuel subsidies are so harmful, why do they persist?

OECD research shows that the impacts of environmental degradation are concentrated among vulnerable groups and households. Income inequality was already at an all-time high in OECD countries in 2017 and has widened during the COVID pandemic with profits rising faster than wages. Inequality is putting a heavy social and political strain on many countries and climate change risks making it worse. Climate action has to be fair and ensuring a fair distribution of the costs and benefits of the green transition is the best way to win the necessary popular support for climate action.

In Dubai, for the first time in the history of COP, members of the UNFCCC will discuss a Just Transition Work Programme. The importance of ensuring a “just transition” is now widely recognized. The term is used in a growing number of high-profile global initiatives, including most recently the Just Energy Transition Partnerships and the UN Global Accelerator on Jobs and Social Protection for Just Transitions. According to UNDP ensuring a just transition was to be found in 38% of Nationally Determined Contributions (NDCs) and 56% of long-term strategies to comply with the objectives of the Paris Agreement.

But what does “just transition” really mean? Trade unions support the definition in the Preamble of the Paris Agreement which refers to " a just transition of the workforce and the creation of decent work and quality jobs “.

Much research found that the green transition could result in a net creation of jobs. In the energy sector alone, 14 million new clean energy jobs could be created by 2030 according to the International Energy Agency (IEA).

But new energy jobs will not always be in the same place (moving from coal mining regions to areas more suitable for renewable energy production) and will not require the same skills as the jobs they replace. There are concerns about the quality of jobs that will be created, in terms of wages, working conditions, employment protection, and access to training and social protection. The US Inflation Reduction Act (IRA) offers a good example of how industrial policies can include social conditionality to help secure the development of clean energy and the creation of decent jobs.

The ILO Guidelines for a Just Transition were recently reaffirmed by its 187 member States. This text stresses that a just transition must secure the future and livelihoods of workers and their communities during the transition and guarantee workers' fundamental rights, access to social protection, training opportunities and job security for all workers affected by global warming and climate change policies.

It also shows that a just transition is not only a set of policies but also a process that involves workers. Transition plans must be agreed through collective bargaining and facilitated through social dialogue between trade unions, employers and governments, at all levels.

Collective bargaining can advance the green transition, by adapting working processes, anticipating the expected adjustments from climate policy, helping design appropriate policy responses, and by fostering innovation and skills development.

Collective bargaining and social dialogue are also essential tools to design and implement adequate mitigation policies.

It is a key instrument to adapt to climate change, guaranteeing workers' health and safety while securing economic activity. The collective agreement of the construction sector in Germany for instance provides that hours not worked between April and November due to weather conditions, including extreme heat, can be made up within the following forty working days with a 12.5 per cent surcharge.

Collective bargaining and social dialogue are also essential tools to design and implement adequate mitigation policies. This includes agreements at company or sectoral level such as those adopted in Spain and Italy to phase out fossil fuel industries.

The Canada Sustainable Jobs Act (June 2023) establishes the Sustainable Jobs Partnership Council (CLC) with the participation of trade unions, and offers a good recent example, as does the Just Transition Commission in Scotland, established by the Scottish Parliament in April 2022.

Beyond labour market policies, a truly just transition will also require a fair distribution of the cost of environmental policies that include price-based policies such as carbon pricing. The OECD Inclusive Forum on Carbon Mitigation Approaches (IFCMA) can contribute to this objective.

By relying on the expertise of its various directorates through the Horizontal Project Net Zero +, the OECD is well placed to develop cross-cutting policy recommendations on how to make sure that costs and benefits are adequately distributed within countries and between countries, including through taxation and development policies. Ensuring compliance with labour and environmental standards by multinational enterprises and better integrating the principles of a just transition in responsible business conduct would also be useful.

In short, the climate crisis can be tackled without creating a social and political crisis by ensuring a socially just transition based on four pillars: the creation of quality jobs and decent work, universal social protection, collective bargaining and social dialogue, and a fair distribution of the costs and benefits of climate action.

Learn more about OECD's COP28 Virtual Pavilion

Featuring a programme of 30+ virtual events, the OECD COP28 Virtual Pavilion runs from 23 November to 12 December 2023. Covering a broad range of topics and convening leading experts, policymakers, and civil society, the pavilion presents key OECD contributions with insights to drive ambitious and globally effective action on climate change. Explore the programme, find key resources and register to join the discussions and watch session replays.

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