The race to carbon neutrality is accelerating. While climate targets are becoming increasingly ambitious, one challenge is often overlooked. Ensuring a just transition for all. The communities that contribute the least to GHG emissions are frequently the most exposed to both the impacts of climate change and the unintended consequences of climate policies. Achieving carbon neutrality will require climate policies to integrate social considerations and adapt to the realities of current economic structures and societal needs.

The Social Risks of Carbon Neutrality

Climate policies are necessary to limit global warming in line with the goals of the 2015 Paris Agreement. Although current evidence indicates that the target of 1.5°C is no longer achievable, shifting attention toward keeping global warming as close as possible to and well below 2°C.

Shifting our model towards a more sustainable future implies social and economic costs. In the short term, the benefits and costs of climate policies will be unequally distributed across regions and socioeconomic groups worldwide.

Climate change disproportionally affects lower-income population

Climate change disproportionately affects lower-income communities, despite the fact that they account for the smallest share of CO₂ emissions worldwide. Low-income countries and lower-middle-income countries account for 17.4% of global CO2 emissions, while representing more than 50% of total population. Despite this low contribution, they tend to be more exposed to climate change due to a combination of factors. Higher baseline temperature, higher likelihood of droughts, reliance on climate-sensitive sectors (agriculture), and lower level of adaptation and resilience among others.

On the opposite, high-income countries are home to 15% of people but will emit most of global emissions worldwide (34%).

Without a Just Transition, Climate Policies May Do the Same

Academic literature has shown that a diversity of negative social impacts can occur from climate policies at member state level. The table below summarizes the most commonly identified adverse social effects associated with existing climate policies.

Social costs of climate policies

Increase of commodity costs	Some climate mitigation policies aim to lower the energy demand by raising its prices. These measures have a disproportionate effect on low-income households, which typically use a larger share of their income on energy expenses (heating/electricity/transportation). Unless accompanied by support and mitigation measures, these policies will exacerbate in the short-term existing socioeconomic inequalities.
Progressive adoption of subsidies	Research indicates that financial incentives such as subsidies and feed-in tariffs for low-carbon solutions (electric vehicles, solar energy, home insulation, etc.) will tend to benefit higher income first, as participation often depends on households’ ability to cover significant upfront investment costs.
Decommission of high-emission industries	Decommissioning the coal industry directly impact communities entirely reliant to the extraction and use of coal, peat, oil shale for their livelihoods. Expected direct job losses in power plant operations due to coal fired power plant could reach around 34 000 jobs, directly affecting most vulnerable household, the most employed in lower-scale, dangerous jobs such as extraction. More generally, as high-emission industries tend to be regionally clustered, these changes will widen regional inequalities within countries.
Employment	Transition directly impacts labor market, and drive labor reallocation towards more “green workers”. This shift may result in strong social disparities if not accompanied by adequate support measures – as regions that have historically benefited from a coal-based economy will be more vulnerable to job losses and economic decline, while regions with stronger innovation capacities and greater access to green investments will flourish.
Education and skills development	The transition to a low-carbon economy will significantly modify the skills requested. Access to education, training, and reskilling opportunities are be essential to ensure an inclusive and successful transition. Workers with greater access to these resources will be better equipped to adapt to changing labor market.

Integrating Social Impacts into Policies Design

Previous analysis does not conclude at all that governments should drop climate action. But rather that policies must be designed with social impacts in mind.  

Climate action should not be pursued without a thorough assessment of its social and human rights implications. Effective climate policy should include stakeholder participation, and targeted mitigation measures. This will ensure that the transition to a low-carbon economy does not disproportionately harm vulnerable households, workers, or communities.

Ensuring Just Transition Principles

The concept of a Just Transition has become increasingly important in climate policy debates. Just Transition refers to “greening the economy in a way that is as fair and as inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind”(ILO).

This approach recognizes that while climate action is essential, its costs and benefits are not distributed equally across society. Countries thus need to develop approaches that reflect the needs and realities of their societies and their historical responsibilities for climate change and environmental degradation.

Just Transition principles have been increasingly incorporated into national and international climate strategies. They are now reflected in 38% of Nationally Determined Contributions (NDCs). But more tailored interventions to address specific needs of communities are needed.

3 Ways to Integrate Social Considerations into Climate Policies

1. Ensure effective monitoring and evaluation of existing climate policies

With a specific focus on both their intended outcomes and their broader social impacts. This would include the assessment of the policy effectiveness in reducing emissions, as well as identifying potential unintended consequences, particularly for vulnerable populations (energy poverty, employment insecurity, regional disparities).

Comparative case studies and impact assessments in countries conducted in Serbia, Costa Rica, and Zimbabwe provided valuable insights into how climate policies interact with socio-economic impacts.

2. Implement compensation measures to address social inequalities.

Most common one would be revenue recycling. Money collected from environmental taxes (carbon, energy) would not be simply absorbed by the state. They could also be redistributed to most vulnerable households affected by climate policies.

This could also mean introducing unemployment benefits, or pension “bridging” to mitigate workers’ economic and potential job losses. Additionally, this could be translated in allowing specific group of citizens to be permanently / temporarily exempted from certain policies (exemptions, postponed implementation, etc.).

3. Put people at the core of adaptation and mitigation solutions.

First, engaging communities is crucial as it will enhance policy effectiveness through

a) local knowledge

b) public trust and support

c) social resilience.

Additionally, investing in people through education, reskilling, health, labor markets, social protection, is necessary for building communities’ capacity to adapt to climate change. Recent World Bank report showed that communities capacity-building lays the groundwork for a low-carbon future:

• In the Philippines, teaching green skills and integrating adaptation into health, science and social studies curricula has become mandatory
• Vietnam’s net-zero pathway integrates skills development programs as a major role in preparing workers for green industries, thus expected to boost employment by close to 1M jobs by 2040.
• In Jordan, the Human Capital Program leverages the country’s social protection system to mitigate impacts on the most vulnerable.

Conclusion

As climate ambition increases, integrating social considerations from the earliest stages of the policy cycle should become the norm rather than the exception. Ultimately, climate action will be most effective when it places people at its center.

Organizations also have a critical role to play in advancing a just transition. Through stakeholder engagement, community consultation, social impact assessments, and the development of tailored Just Transition strategies and action plans, Ksapa has the expertise to help companies anticipate their social and human rights risks, and strengthen their mitigation measures to ensure its commitments generate positive outcomes for workers, communities, consumers and society as a whole.