Political Acceptability of Climate Policies: Do we Need a ‘Just Transition’ or Simply Less Unequal Societies?

By
Francesco Vona

This blog
post is partly based on the policy paper published in the journal Climate
Policy: ‘Job
Losses and the Political Acceptability of Climate Policies: why the job killing
argument is so persistent and how to overturn it.’

Concerns for a ‘just transition’ towards a
low-carbon economy are now part of mainstream political debates as well as of
international negotiations on climate change. Key political concerns centre on
the distributional impacts of climate policies. On the one hand, the ‘job
killing’ argument has been repeatedly used to undermine the political
acceptability of climate policy and to ensure generous exemptions to polluting
industries in most countries. On the other hand, the rising populist parties
point to carbon taxes as another enhancer of socio-economic inequalities. For
instance, the Gilets Jaunes (Yellow vest) movement in France is a classic
example of the perceived tension between social justice and environmental
sustainability. 

Demand for a fairer distribution of
carbon-related fuel taxes and of subsidies for electric vehicles mirrors the
political demand for income compensation to workers in ‘brown’ jobs displaced
by climate policies. Such increased demand for redistribution depends on the
fact that main winners of climate policies (e.g. those with the right set of
skills to perform emerging green jobs or with enough income to consider buying
a subsidized electric car) are fundamentally different from the main losers
(e.g. those who work in polluting industries and drive long distances with diesel
cars). Importantly, the identity of the winners and losers coincides with that
of the winners and losers of other, more pervasive, structural transformations,
such as automation and globalization. Indeed, the winners are wealthier, more
educated and living in nicer neighbourhoods than the losers. The spatial
sorting of winners and losers polarizes not only the perception of the costs
and benefits of climate policies, but leads also to the emergence of apparently
irrational behaviour. In several cases such as Taranto in Italy or Dunkirk in
France, employees in polluting activities, whose families are the first to be
exposed to such pollution, are willing to accept health risks to preserve their
jobs.

Absurd as it may appear, such opposition
against ambitious climate policies from the left-behind is the tip of the
iceberg of more fundamental problems of our societies, namely, the enormous
increase in income inequality. For both the left-behind and an increasingly
fragile middle class, it may be more important to satisfy basic needs such as
‘work’, ‘food’, ‘shelter’, ‘communicating’ than eating organic food or
supporting climate policies. For a given level of income per capita, citizens’
support for green policies is likely to be significantly lower the more unequal
the society because the median voter’s income may be just enough to satisfy the
basic needs mentioned above. Likewise, a lower level support for climate
policies is concentrated in regions that depend more on carbon-intensive
industries.

Fortunately, there are well-known solutions to
restore the right support to an ambitious plan to fight climate change.
Politicians can easily identify the right amount of subsidies to neutralize the
distributional effects of climate policies either on displaced workers, or on
most affected consumers. Several solutions have been discussed and implemented
ranging from direct transfers of the revenues of a carbon tax to recycling
schemes to reduce taxes on labour and capital. In its operational definition,
the just transition is thus a policy package whose aim is to mitigate the
negative distributional effects of climate policies for those at the bottom of
the income distribution.

There is, however, a powerful ethical argument
that undermines the viability of these well-known solutions. Why should a
worker displaced by a carbon tax have more rights than a worker displaced by a
robot? The ethical bases to justify the special status of any policies inspired
by the just transition are at best weak, and special policy solutions for
workers in ‘brown’ jobs may fuel the resentment of those left behind by
automation and globalization. An alternative and far more radical solution
appears to be to think at the high level of inequality of our societies as a
main constraint to fight climate change. The threat posed by growing tension
between inequality and environmental sustainability should thus push reforms of
our welfare and fiscal systems that protect the workers left behind by trade,
globalization and climate policies, thus weakening one of the main constraints
to ensure a broad political support to the low-carbon transition.

Read the full
paper.

This post was first published on the Climate
Strategies and Climate Policy Blog