Social injustice is incompatible with a sustainable environment

16 Nov, 2021

It is good that net zero carbon emissions and a ceiling of 1.5 degrees of climate warming have become established goals of international policy. But the muted success of COP26 in Glasgow shows there is still a mountain to climb to turn lip-service into reality.

Tackling climate change is increasingly central to governments’ wider economic and social policy. The same goes for business investment and production methods, as the market responds to incentives and consumer choices.

This is huge. We are in the early stages of an epochal shift in our model of capitalism, our attitudes to growth and consumption, the management of our societies and our way of life.

Change of this sort poses immense challenges for governments, individuals, and the cohesion of our communities. But it is also an opportunity permanently to recast our political economy to deliver more sustainable and equitable outcomes.

The dilemma of injustice

This task carries a serious risk of exacerbating real or perceived injustice, both between countries and within them.

Over three quarters of historic global CO2 emissions have come from developed countries, who grew rich on fossil fuels. Yet unless we take positive action, the future costs both of catastrophic climate change, and of the steps  needed to prevent it, will fall heaviest both on the poorer countries, and on the poorer people within all countries.

That is a moral challenge for governments, businesses and consumers. It is also a practical problem affecting our self-interest. If the response to climate change is unjust, not only will it fail, but dangers to stability and security will emerge with dire consequences for all.

International injustice  

Weaker countries face the most acute challenges and are less able to deal with them.

The IPCC reports that the past decade was the hottest in the last 125,000 years and a recent study found that by 2070 one third of mankind could face temperatures as high as those in the Sahara today. The World Bank says climate change could push 132 million people into poverty in ten years.

The Alliance of Small Island States continues to call for help to adapt. For many developing countries, the challenge of protecting natural resources conflicts with their commodity-based economic model.

The forward cost of action to mitigate climate change will also fall heavier on developing countries.

They are responsible for some two-thirds of current global CO2 emissions. China – 28%, India 7%, Indonesia 2%, other developing countries some 20%. In 2020 China commissioned more than three-quarters of all new coal plants.

This means emerging markets and industrialising countries face huge changes to their growth model. Some, like China and India, the last-minute blockers in Glasgow on coal, can in fact make this change and benefit from developing new technologies.

Others cannot. Ninety out of 122 low and middle-income countries have entered economic recession since the pandemic. Food insecurity and inequality are up. Commitments to the UN’s Sustainable Development Goals remain unmet.

The geopolitical context is not encouraging. These are times of heightened nationalism and diminished commitment to multilateralism. The absence from Glasgow of Xi, Putin, Bolsonaro and Erdogan matters. The US and China missed the opportunity to come together sooner to lead material climate action.

A successful response will require policies that direct capital and enterprise to three imperatives: climate change, development and social justice. The developed world must lead in providing major resource transfer. $90tn in global climate finance is required by 2030 to meet Paris Commitments. The IEA seeks a seven-fold increase in annual clean-energy investment in the developing world - $1trn by 2030. The promise of $100bn a year in official climate finance flows is still to be met.  

And we still need more focus on adaptation. Developed countries are responsible for the climate change that is already baked in; they should enable half of all finance to be targeted at adaptation in most vulnerable nations.

Domestic injustice

At home, the transition to net zero will fuel inflation and impose disproportionate costs on those who can least afford higher fuel bills or swapping a gas boiler for a heat pump.  

This needs to be explicitly addressed. The risk of dislocation and political backlash is obvious and is being exploited by populists from Trump down. Democratic governments can only rule with the consent of voters, and the challenges ahead require resilient, cohesive societies.

The Office of Budget Responsibility estimates that net zero will cost the UK £1.4 trillion by 2050. That is £1,700 per family per year. Innovation will bring this down, but politicians must face the facts, as must affluent taxpayers of the baby-boomer generation.

We need a progressive approach. Rather than relying on energy bills, which hit the less well off, we should raise funds through general taxation and measures directed at those who can afford to pay more or have high carbon footprints.

The other side of the coin is targeted grants or subsidies for those on lower incomes. As carbon taxation becomes pervasive, we can recycle money back to them through green dividends, benefit uplifts or tax credits.

We also need to share knowledge fairly, so that everyone has access to opportunity. Training and skills must equip people to participate in the low carbon economy.

Private and public  

Businesses and deployers of capital have a central role. Confidence in their commitment to social justice is thin. This is a generational chance to marry moral responsibility with reputational repair and commercial interests.

Companies will be judged on the actions of managers and shareholders, and on real-world outcomes. Increasingly regulators will set tougher requirements and scrutinise performance.

Significant capital has been raised through ESG mandates and net-zero fund commitments. But a net-zero portfolio of US and European equities is not enough - capital needs to flow to emerging markets. Where the risks are high, state balance sheets and development banks should offer support.

All of us - governments, corporates, investors and consumers - have a moral duty and a hard practical interest to keep social justice at the heart of our response to climate change.   


Flint Managing Partner, Simon Fraser was Head of the UK Foreign Office and Diplomatic Service between 2010 to 2015.  Before that, in 2009-2010 Simon was Permanent Secretary at the UK Department for Business, Innovation and Skills (BIS). To find out more about how Flint can help you navigate the risks and opportunities in the aftermath of COP26, please get in touch. 

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