Tackling inequality will break the deadlock on what to do about climate change

There has been a lot of talk about the urgency of climate change. But it is universally accepted that the measures that have been agreed to stop global warming are too little too late.

Why is it?

We argue that inequality is part of the answer to why there is little action.

On the one hand, inequalities polarize societies and make them less inclined to act. On the other hand, inequality leads elites to capture agency and be less inclined to give up their privileges.

Reducing inequalities is crucial not only from an ethical point of view, but also because it will allow us to fight against climate change.

However, if we want to reduce inequality, we must recognize that a different kind of growth is needed. And that it must be closely linked to actions aimed at curbing climate change and adapting to its impacts.

The challenge is that what we know about such sustainable development fits into the context of high-income countries. But how does this translate into African countries?

Inequality and climate are closely linked

We are increasingly aware that patterns of growth and development around the world are unsustainable, whether from a climate or social perspective (and this was true even before the COVID-19 pandemic).

Recent data from the World Inequality Report shows that historical CO2 emissions linked to development trajectories from 1850 to 2020 have significantly reduced the remaining emissions budget that would allow it to remain below 1.5° or even below 2° by 2050 ( see below).

Historical emissions versus remaining carbon budget.
World inequality report 2022

What the graph also tells us is a story of inequality: inequality in CO2 emissions and inequality in development.

With the onset of the COVID pandemic in 2020, this situation has only worsened as an estimated 119-124 million people have been pushed into extreme poverty.

So in assessing our current state, the World Inequality Report agrees with Oxfam Davos’ report, titled this year ‘Inequality Kills’, as they both show a significant rise in inequality overnight. of the pandemic.

Oxfam’s report shows staggering facts about how, due to COVID-19, the wealth of the 10 richest men has doubled, while the incomes of 99% of humanity are worse off. A recent survey by the Organization for Economic Co-operation and Development also shows that people are increasingly concerned about this increase in income disparity.

And we know that poverty would decrease even more if inequalities were lower.

It is the kind of extractivist growth that has led to this situation of increased inequality both between and within countries, and has also led to climate unsustainability.

Aaron Ntonsi and Armand Thusi, residents of Big House settlement near Komati Power Station – Komati, Mpumalanga.
Paul Daylin

Going back to the old ways is a bad idea

Voices have begun to rise about how the fallout from the COVID pandemic could be a window of opportunity to rebuild differently, to redefine solidarity, social values ​​and prosperity.

A number of influential commentators, such as Nicholas Stern, former chief economist of the World Bank and the European Bank for Reconstruction and Development and senior author of the Stern review on the economics of climate change, have seen in this moment an opportunity to put in place more sustainable social and economic processes by linking these social and economic changes to more climate-friendly production and consumption patterns.

For a short time, it seemed like many agreed. But now that stimulus strategies are being implemented, it is seen as imperative to revive growth as it was before, despite the fact that it is commonly accepted that this was an unsustainable growth trajectory. .

This disjunction between where inequality, COVID and the climate emergency have taken us and the apparent amnesia of this business as usual approach is puzzling.

Of course, it is imperative that economies restart. But the resolute focus on reviving growth rests once again on the idea that this growth will trickle down to all members of society and reduce inequalities. But we know that is not true.

A different approach

If existing growth processes are not trickling down and preventing potentially productive sections of the population from participating in the economy, then a starting point for thinking about what it might mean to build back differently should be a detailed interrogation in the context of each country multidimensional inequalities that restrict inclusion. Economists Dani Rodrik and Stefanie Stantcheva provide a useful framework to use (see below).

Policy matrix proposed by S. Stantcheva and D. Rodrik.

Each of these dimensions must be considered together. In this context, we insist on the need to consider economic and social policies in a joint and integrated manner.

Additionally, the required policy combinations differ for those in the lower, middle, and upper income classes of a society. The extent and nature of current inequalities are therefore central to assessing and planning growth policies that benefit everyone.

These policies must be grounded in a detailed understanding of how inequalities enhance – or limit – opportunity.

South Africa is a good example. Its very high inequality sees the bottom half of the population share only 8.5% of total income (while the richest 10% concentrate 52% of total income). This is mainly due to the fact that the lowest income group, which represents almost half of the country’s population, is largely disconnected from the labor market. This is due to the intersection of different types of inequality, ranging from space, race to wealth and assets.

Growth must focus on improving the productivity of this lowest income group. For this to happen, social and infrastructure spending are key investments. Inclusive growth cannot happen without them.

Investing in people is not only crucial for socio-economic sustainability, but also for climate sustainability. The “yellow vests” movement in France was only a glimpse of why the ecological transition must be supported by social policies, but there is a growing awareness of the risks looming.

A few options

When thinking about the role of reducing inequality in addressing climate change, a few channels stand out. Most obvious is the huge emissions gap between the poorest and the richest. Oxfam has estimated that 20 of the richest billionaires emit on average up to 8,000 times more carbon than the poorest billion people.

But the distorting impact of inequality on climate change goes beyond emissions inequality. Inequalities polarize societies and make them less inclined to act for the common good. This is particularly problematic for effecting socially optimal change, as inequalities result in elites capturing agency and being less likely to give up their privileges, which are often tied to current non-inclusive and uninclusive production and consumption structures. not durable.

Reducing inequality allows us to break the impasse of only talking to the established elite. This, in turn, will facilitate climate action and open up the possibility of doing things differently.

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