By 2030, decarbonisation could create 15 million net new jobs in Latin America and the Caribbean. That is the message delivered by the Inter-American Development Bank and the International Labour Organisation in a new report. The challenge is to manage losers and winners and ensure a just and inclusive transition.
The pandemic has hit Latin America and the Caribbean hard, exposing pre-existing social issues in the region including record levels of inequality and endemic informality. Take street vendors, or owners of informal tourism-oriented restaurants who lost their income during the lockdowns.
The same issues make Latin America and the Caribbean vulnerable to the climate crisis, which was already plaguing the region before Covid-19. In the Caribbean, the 2017 hurricane season stopped 800,000 potential visitors from generating US$740 million and supporting 11,000 jobs. Informal workers were the most affected.
More recently, Iota and Eta hit Central America two weeks apart, leaving more than 400 dead or missing and up to 20% of national GDP in damages. By 2030, heat waves alone will destroy the equivalent of 2.5 million outdoor jobs in the region, especially in agriculture and construction.
A sustainable recovery can put the socioeconomic impacts of Covid-19 in the rear window while safeguarding our environment and reduce the likelihood of future crises.
Our recent book Jobs in a Net-Zero Emissions Future, jointly published with the International Labour Organisation, outlines how recovery packages focused on enabling a net-zero emissions economy can help reap the economic, health, and social benefits of decarbonisation.
First of all, we already know the technical path to a carbon-free economy:
- Replace all coal, diesel and natural gas power plants with wind, solar, hydro, and geothermal plants
- Use electricity instead of fossil fuels for transport, cooking, and heating
- Increase public transport, walking and biking to reduce reliance on private cars
- Reduce beef consumption to free land and reverse deforestation
- Recycle and compost our waste, and build with zero-carbon materials, such as wood or bamboo
But while the transition is technically feasible, citizens and businesses are on the front line for decarbonising. And even if many will be sympathetic to environmental goals, improving their bottom line and quality of life tends to be their priority.
The challenge is thus to interests workers, managers, and citizens in transitioning to net zero. The solution is to ensure a just transition, which means engaging all stakeholders, addressing obstacles, and maximising the benefits of a net-zero economy.
1 –Engage inclusively
Building climate plans with all sectors – this means government agencies, civil society, businesses, and workers – is crucial in catering to different views and finding ways to reduce emissions that will be welcomed by all stakeholders. This will allow voices of the concerned to be heard and addressed, and synergies between decarbonisation and development needs to be identified.
Inclusivity will also help identify wider socioeconomic issues. Governments should hear from a range of communities, including women, indigenous communities, the youth, the elderly, and poor and marginalised populations to improve policies across sectors. In the time of social unrest and the pandemic, successful net-zero approaches should be about far more than climate justice.
2 –Minimise costs
Any transition has downsides and challenges. They should be anticipated and addressed.
For instance, decarbonisation will mean that 7.5 million fewer jobs will be created in the fossil fuel and animal agriculture sectors by 2030. Some industries, such as coal or natural gas power plants, and the communities that depend on them, will be affected negatively. But others will experience vast increases. Up to 22.5 million jobs can be created in plant-based food production, renewable energy, forestry, construction, and manufacturing, offsetting losses by a net gain of 15 million jobs.
It is crucial to help workers and communities negatively affected. Possible solutions include making funds available for anticipated retirement or reskilling and/or relocating to jobs in other sectors, considering also gender equality. Public infrastructure investments in affected communities or the sitting of government agencies can also mitigate the impact on local livelihoods.
Another issue is stranded assets: oil and gas deposits from the region are bound to become financially unviable during the energy transition. Petrostates that depend on fiscal revenues still can, and should urgently, diversify.
3 – Maximise benefits
To reap the benefits of a net-zero economy, we must look beyond decarbonisation as a tool to fight the climate emergency. We have to welcome development choices from which citizens, business and workers can profit.
The opportunities are plentiful. In Costa Rica, a cost-benefit analysis of the National Decarbonization Plan found $41 billion in net benefits associated with energy savings, reduced cost of accidents, time wasted in congestion, air pollution, and improvements in ecosystem services and agriculture yields. That is why development banks have supported decarbonisation in the country.
The region is well positioned to benefit from the transition to a greener economy: it is ahead of the curve in renewable energy and has more wind and sun that it will ever need. It also remains a biodiversity hotspot, a pioneer in ecotourism, and hosts treasures of yet-to-be-monetised vegetarian cuisine. Many of the challenges it faces can be solved with climate solutions. For instance, better public transport provided by electric buses can reduce congestion and improve air quality while providing options for marginalised populations to safely commute to employment centres.
These benefits are not going to materialise out of thin air. Governments, businesses, workers, and citizens need to ensure that skills, regulations, curriculums, and business models all align to deliver them. The first step is to embrace a zero-carbon economy.
This post was sponsored by the Inter-American Development Bank. See our editorial guidelines for what this means.