Ensuring fairness for developing Asia during the net-zero transition
February 6, 2024
For low-carbon growth to be maintained long term, climate change mitigation policies must be able to sustain political support. Only if the transition is kept just can mitigation policies maintain sufficient political support over the long periods necessary to achieve net zero emissions.
What is Net Zero?
Net zero refers to the balance between the amount of greenhouse gas (GHG) that’s produced and the amount that’s removed from the atmosphere. It can be achieved through a combination of emission reduction and emission removal. From countries and companies to individuals, tackling climate change is at the top of the agenda. Action taken to limit emissions in the next decade will be critical to the future, which is why every country, sector, industry, and each one of us must work together to find ways to cut the carbon we produce. To understand how industry workers can benefit from a large-scale green transition, it is advisable to look at a study that our Science and Policy head has conducted on Vietnam’s textile and garment industry.
However, injustices can arise when implementing net zero policies. Climate policies are one of the important measures to mitigate the impacts of climate change. However, the implementation of this law also poses many economic and social challenges. While effective in reducing emissions, it can adversely affect low-income households due to higher costs for essential goods and services.
Commodity prices escalate
A carbon pricing policy can lead to large revenues as prices escalate due to taxes on products and services that cause emissions. This can affect people’s lives. Therefore, it is necessary to have policies to support the disadvantaged in society, such as tax support or discounts for those with low incomes. To date, however, revolving revenue in developing Asia has often been for public spending in general or for companies, rather than for vulnerable people.
Labor loses job
Reducing GHG emissions can lead to the loss of low-skilled jobs, such as those related to fossil energy. Therefore, it is necessary to have a policy to foster capacity for low-skilled workers, so that they can switch to new occupations in line with the development trend of the economy.
Food declines and food prices rise
Reducing GHG emissions can affect food production, by affecting climate and the environment. This can lead to a decline in production and an increase in food prices. Meanwhile, food is the largest household expenditure among low-income households in developing Asia, with these households typically spending at least three times as much on food. compared to energy.
What should we do?
For low-carbon growth to be maintained long-term, climate change mitigation policies must be able to sustain political support. Only if the transition is kept just can mitigation policies maintain sufficient political support over the long periods necessary to achieve net zero emissions. Tax breaks or temporary exemptions for vulnerable sectors can help smooth the adjustment of affected sectors (IMF 2021; ADB 2022b).
The labor market can be supported by public services to help inform new employment and training opportunities, as well as reforms to ensure that barriers to labor mobility are removed. During the transition, social protection, including unemployment benefits, is necessary so that workers can transition smoothly to new employment opportunities (Garrido and Hughes 2023). There is a need for policies to support farmers and food producers, to help them adapt to changes in the production environment. To understand more about climate change policies in Vietnam, EU and the U.S., visit Nuoa’s Policy Analysis.
Conclusion
The benefits of ambitious climate policy disproportionately accrue to those who are most in need and who have the least historical responsibility for the climate crisis. Long-term fairness for developing Asia requires climate policy to be cost-effective enough to be ambitious, with sufficient redistributional measures in place to protect vulnerable people and maintain political support. Therefore, it is very important to ensure fairness when reducing GHG emissions. Policies to support people, capacity building for workers and support for food producers are needed to ensure that GHG emission reductions do not cause negative social and economic impacts.
Lead Author:
Lan Nguyen Co-Founder, Head of Science & Policy Email: lan.nguyen@nuoa.io
Ms. Lan Nguyen does her PhD research in Economics, Environment, Evolution, and Ecology at the prestigious Dartmouth College (USA). Her research focuses on green growth policy, natural resource management, and environment policy and ecology
Co-Author: Long Pho Business Analyst – Nuoa.io Email: long.pho@nuoa.io
