Accelerating an Equitable Transition: A Data-Driven Approach

Accelerating anEquitable Transition:A data-driven approach J U L Y2 0 2 4I N S I G H TR E P O R T Disclaimer This document is published by the WorldEconomic Forum as a contribution to a project,insight area or interaction. The findings,interpretations and conclusions expressedherein are as a result of a collaborativeprocess facilitated and endorsed by theWorld Economic Forum but whose resultsdo not necessarily represent the views of theWorld Economic Forum, nor the entirety of itsmembers, Partners or other stakeholders. © 2024 World Economic Forum. All rightsreserved. No part of this publication may bereproduced or transmitted in any form or by anymeans, including photocopying and recording,or by any information storage and retrievalsystem. World Economic Forum91–93 route de la CapiteCH-1223 Cologny/GenevaSwitzerland Tel.: +41 (0) 22 869 1212Fax: +41 (0) 22 786 2744contact@weforum.orgwww.weforum.org Contents Executivesummary 3.Fossil-Fuel Exporters:Economies thatheavily rely on fossil-fuel rents and subsidizedenergy consumption to support nationalgrowth and prosperity, resulting in high-levels of emission intensity. Countries in thisgroup typically benefit from a STEM-focusedworkforce and strong fiscal balances butrestructuring the fiscal system to accountfor subsidy phase-outs and economicdiversification more broadly can provechallenging in the years ahead. The fossil-fuel exporters mainly include countries in theMiddle-East (e.g. Iran, Kuwait, Oman, Qatar,Saudia Arabia and United Arab Emirates) andCentral Asia (e.g. Azerbaijan and Uzbekistan) 1.Inclusive Green Adopters:High-income,service-driven economies that havemade significant strides in reducing theiremission intensity by adopting availablegreen technologies, while keeping in placeframeworks and mechanisms to ensureinclusion and economic equity. A skilledworkforce and high financial capabilityare among their strengths while erodingcompetitiveness, cost-of-living pressuresand an aging workforce seem to be potentialchallenges. Countries in this archetypeinclude mainly Western and NorthernEuropean countries (e.g. France, Spain,Sweden and the United Kingdom) in additionto Australia, New Zealand, Canada andSingapore. Agreement as well as long-term climate-actionstrategies. However, the evidence, frameworksand tools necessary for an informed and effectivepolicy response are lacking. This paper proposesmetrics to help stakeholders understand the inci-dence and severity of the multi-dimensional equityimplications of the greening of emissions-inten-sive sectors. Out of 58 indicators identified in thispaper, only five are systematically collected andpublished at a global level. Where data is unavail-able, the paper relies on proxy metrics to devel-op six country dashboards which are illustrativeexamples of how these metrics can be used toidentify country-level focus areas. Limitations in data, frameworks and tools tounderstand the socioeconomic implications ofclimate action risk slowing down the pace ofthe green transition.In recent years, measuresto implement environmental taxes or to reformfossil-fuel subsidies have raised concerns of ris-ing cost of living in some countries, while effortsto decommission fossil-fuel infrastructure havesurfaced immediate fears over local employmentimpacts. Governments in some countries have,consequently, been compelled to delay or sus-pend necessary reforms, recalibrating the paceof climate action. In many parts of the world –including Latin America, Southern Africa, andemerging Asia – economic growth remains a crit-ical but competing priority with pressures to de-carbonize. In the absence of financing and broad-based access to technology and know-how,leapfrogging to “green growth” can be elusive.These experiences illustrate that fairness in thedistribution of costs and benefits of climate ac-tion is critical to building public support and poli-cy stability. The criticality of equity and fairness inclimate action is widely acknowledged, includingby many countries in their Nationally DeterminedContributions (NDCs) submitted for the Paris Challenges to an equitable transition can ma-terialize in countries across income levels orstages of development, but many will sharesimilar challenges and can leverage commonstrategies for a fair and inclusive transition.Economic, institutional, demographic and geo-graphical specificities within countries can leadto varied exposure to economic equity risks.While consistent and comparable evidence onexposure to potential economic equity risks at acountry level is lacking, this report presents sixcountry archetypes that give leaders a forwardview on key opportunities and challenges for anequitable transition. Countries of the same ar-chetype share some structural similarities thatindicate their economic equity challenges mayalso be similar. 4.Growth Economies:Rapidly industrializingupper-middle income economies withgrowing energy demand that will, in theshort term, need to navigat