Foreing Affairs
A Safety Net for the Green Economy

Proposals to promote a fair transition in the fight against climate change

Simon Tagliapietra, researcher at the Bruegel think tank, raises in this article the need to consider the social impact of the measures adopted in the fight against climate change. In his opinion, to be successful and to ensure a fair transition it is necessary to expand social safety nets, supporting the communities and sectors most disadvantaged by the transition towards a green economy. In this regard, the article describes some measures, already announced in different countries, such as the return to citizens of the income generated by new taxes on carbon emissions or specific investment plans in deprived areas.

The main ideas of the article would be the following:

  • Given the urgency to act on climate change, the transition to a low-emission economy will be more abrupt and intrusive than expected, generating winners and losers (stranded assets, job losses, sectors restructuring, natural disasters…), widening economic inequalities and social protests (example: yellow vests in France), which could ultimately stop the adoption of the necessary measures to avoid the environmental disaster.
  • We must learn from the mistakes made in the past during the process of globalization and economic liberalization, in which the benefits generated were not devoted to expand the social safety nets of the most vulnerable to face potential crises, causing higher levels of inequality and precariousness in labor market.
  • Governments will have to take redistributive measures in favor of the most disadvantaged by the shift towards a new green economy, environmentally more friendly. In this regard, the article reviews initiatives already in force in different countries, such as the Social Climate Fund in the EU, designed to allocate a part of the new revenue from taxes on carbon emissions to those most affected by the increase in energy prices.
  • In his opinion “ultimately, the path to a carbon neutral economy depends on the ability of governments to turn decarbonization into an opportunity”, pursuing a more inclusive economy with better jobs for all.

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