Extreme heatwaves are searing Europe this summer and breaking records with temperatures near or above 40 degrees Celsius in three nations; Germany, the Netherlands and Belgium.
These heatwaves are becoming a new norm and are a direct consequence of climate change. As carbon dioxide emissions driven by human activity continue rising, they bring the average global temperature up with them. It is impacting the environment, human health and prosperity, in addition to the enormous economic costs.
In 2018, the Intergovernmental Panel on Climate Change (IPCC) report stated current plans by governments were not enough to keep temperatures below the so-called safe limit: 1.5 degrees Celsius with a decrease in emissions starting in 2020.
Currently, the world is heading towards a global 3 degrees Celsius increase in heating by 2100, and the fear of inaction is driving public demand for climate-friendly policies. In May, Europe’s Greens triumphed in European Parliament elections, winning 74 seats (almost 10% of the vote) on a platform demanding radical climate action. In the United States, politicians have debated the implementation of a 'new Green Deal,' an economic stimulus package meant to address climate change and economic inequality. Such policies stand to become a bigger force as political parties integrate climate-forward proposals into their respective platforms.
Yet, even these well-minded policies will be fleeting if policymakers fail to convince voters that climate-friendly policies are a common cause, not an elitist one.
When French President Emmanuel Macron announced a tax on fuel to encourage the country’s transition to green energy in 2018, he was immediately confronted with nationwide unrest that became known as the 'Gilets Jaunes' (Yellow Vests) movement. French citizens took to the streets to protest the government’s tax reforms and the unequal burden it places on working and middle classes while bypassing the wealthy. President Macron’s experience demonstrates the need for policymakers to consider policies that recouple our economic, social and political systems to ensure economic growth serves the people.
Worldwide communities are faced with disruptive developments, with some individuals more vulnerable than others. Irrespective of the benefits green policies bring, they can also harm vulnerable communities - decidedly those left behind as economic progress, governed primarily by market-driven globalisation, drifts further apart from political and social progress.
Climate-friendly policies require a massive restructuring of various economic sectors, such as agriculture, forestry, energy and manufacturing, which together employ millions of workers. Structural changes of this magnitude, including digitisation and automation, greatly affect not only workers’ social mobility but also their economic opportunities. These workplace transformations culminate as a perceived assault on jobs and livelihoods across multiple fronts. Regardless of whether companies automate their workplace or transition to low-emitting production processes, employees must be prepared to engage in lifelong learning or risk becoming redundant.
Integral changes such as those needed to mitigate and adapt to the effects of climate change, by their very nature, pose a threat to employment and job security, potentially deepening pre-existing social rifts. Therefore, we must ensure green policies are not punitive and must take workers further. We must deepen the connection between economic, social and technological progress, guided by ecological limitations and sustainability.
Policymakers need to develop frameworks with social interventions that ensure just transitions for workers, their families and the communities most impacted by such restructuring. Otherwise, their proposals stand little chance of success.
A frequently-mentioned proposal to reduce CO2 emissions is carbon pricing, in which a cost is applied to carbon pollution in order to encourage polluters to reduce the amount of greenhouse gases emitted into the atmosphere. Such a system must consider the negative socio-economic impacts associated with the structural change of switching from a carbon-intensive economic system to a low-carbon or carbon-neutral system. The implementation of carbon pricing as such would require transition management in the form of job training. An appropriately-designed system can address the potential negative economic and welfare impacts of carbon pricing, as Satoshi Kojima of the Institute for Global Environmental Strategies and co-authors explain. “Simply introducing sufficiently high-carbon pricing would cause severe welfare loss for the people who heavily depend on private cars without proper alternative options, as often observed in rural areas.” Therefore, carbon pricing should also be packaged with policies affording low-carbon or decarbonised mobility options.
In addition to training and skills development for new technologies, social protections must be taken, including government programs in the labour market that help the unemployed find work and mutual skills recognition to facilitate worker mobility, explain Laura Jaitman, G20 Finance Deputy of the Argentine Ministry of Treasury, and Maria Florencia Asef Horno, economist of the ministry’s G20 Unit, in a 2019 article on the future of work. Policymakers need to provide strategies that diversify away from jobs and markets that are emissions-heavy to income sources that are climate-resilient.
Furthermore, to avoid the unintended effects of unilateral actions as nations accelerate towards a low-carbon economy and society, the above actions must be internationally coordinated and harmonised. Countries can share best practices and policy solutions that support life-long learning and, at the same time, information on how to allocate and manage resources, according to Jaitman and Horno. Our oppressive footprint on the global environment should not become a crushing weight on the working populations of the world. The solution to this global challenge requires cooperation at unprecedentedly large scales.
No corner of the planet will go untouched by climate change. Heatwaves are borderless.
Dennis J. Snower is founder and President of the Global Solutions Initiative, Professor of Economics at the Hertie School of Governance, Senior Research Fellow at the Blavatnik School of Government, Nonresident Fellow of Brookings Institution and Visiting Professor at University College London and Birkbeck College. He was President of the Kiel Institute for the World Economy and is Research Fellow at the Center for Economic Policy Research (London), at IZA (Institute for the Future of Work, Bonn), and CESifo (Munich).
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