Climate change mitigation policies are globally needed to avoid exceeding the Paris Agreement goals of 1.5°C and 2°C warming. Such policies will also change societies and everyday life, penalising some technologies and behaviours, such as private car use or coal-powered electricity, while supporting others, such as active travel or better quality thermal insulation.
According to a study led by the Berlin climate research institute MCC (Mercator Research Institute on Global Commons and Climate Change), climate and energy policies often fall short of delivering positive social outcomes, such as individual wellbeing, a fair distribution of wealth and community cohesion.
“Poorly designed climate policies that exacerbate social problems are a gift to the coal and oil industry,” said William Lamb, a researcher in the MCC working group Applied Sustainability Research and lead author of the study. “We need to avoid this at all costs, otherwise lobbyists will exploit such mistakes in order to roll back regulations and limit their compliance costs.”
Indeed, climate policies can bring positive social benefits. They could eliminate the enormous health burden of fossil fuel combustion in cities and address persistent fuel poverty among poor communities. They are an opportunity to initiate wide-ranging fiscal reforms, shifting funds from fossil subsidies towards directly addressing the needs of disadvantaged populations. Above all, action taken to reduce emissions now will reduce catastrophic climate impacts in the future, which will predominantly affect the global marginalised and poor.
“All in all, our study generates confidence,” Mr Lamb argued. “For where the fight against global warming is not only well-intentioned but also well-executed, the much-cited co-benefits of climate policy can be well demonstrated. This should encourage us to support ambitious climate measures that also directly tackle social issues.”
The study analysed climate policies such as higher fuel taxes, carbon pricing in the energy sector, subsidies for solar cells, support schemes for energy efficiency retrofits, feed-in tariffs for green electricity and major projects such as dam construction. For each policy instrument, there are examples of socially acceptable implementation also in Central and Eastern Europe.
In particular, taxes on transport fuels appear to be more likely to be progressive than energy or carbon taxes, particularly in less wealthy and emerging countries.
In cases from Estonia and Romania, public subsidies for building and household retrofits were typically regressive in terms of income and geographic distribution, with grant recipients mainly located in middle and high-income areas. Again, this was principally because low-income households lacked the upfront capital and support required to invest and participate in these schemes.
On a positive note, the Saving in-house program in Greece overcame this problem with a combination of interest-free loans and energy retrofit subsidies that progressively increased for lower-income households. It ultimately reached 50,000 participants, the vast majority of which were in low-income brackets.
Subsidies for solar and energy efficiency installations are the most attractive for recipients, with reported benefits for affordability, access and poverty reduction. Yet without mechanisms to explicitly target or support low-income households, they may exacerbate pre-existing inequalities
When it comes to Feed-in Tariffs (FIT), procedural injustice is often a problem. Under the Bulgarian FIT, government decisions for energy projects lacked transparency and public consultations, furthering opportunities for corruption between politicians and investors. However, the same Bulgarian government approved adopted a law in 2007 which aimed to reach 1,000 megawatts (MW) of installed solar capacity and 660 MW of installed wind power capacity.
The study concludes that it is possible to meet climate mitigation goals alongside improvements in livelihoods, affordability, equality, the provision of employment and community cohesion. However, this requires integrated policies that directly address equity and procedural justice, supported by well-functioning institutions and financial alignment towards affordable low-carbon energy services.
