Addressing the socio-economic disparities of net zero transition

Addressing the socio-economic disparities of net zero transition

Dr Piera Patrizio, Imperial College London, Centre for Environmental Policy
Yoga Pratama, Imperial College London
Dr Niall MacDowell, Imperial College London

The European transition to a net-zero economy by 2050 implies a wide range of changes which will be unevenly distributed across industrial sectors, communities and regions. These socio-economic disparities cannot be captured by traditional least cost approaches, which address energy transition strategies from a pure techno-economic prospective.

The idea of a ‘just transition’ increasingly features in policy and political discourse and appeals to the need to ensure that efforts to steer society towards a net zero future are underpinned by attention to issues of equity and justice. As such, detailed consideration of the country-specific economic strengths, geopolitical perspectives, and levels of socioeconomic and technological readiness for energy transition are judged to be particularly influential for implementing fair and effective decarbonization strategies.

This work proposes a framework to quantify the socio-economic impacts of implementing different energy transition pathways in a range of national context, and to capture important trade-offs between decarbonization and other societal goals such as economic growth and employment. The framework is applied to the UK, Spain and Poland, representing countries where low-energy carbon deployment is technically achievable, but have quite different patterns in terms of available natural resources, economic strengths, and climate mitigation ambitions.

Our results show that transitions which protect domestic strategic assets and preserve key industrial sectors correspondingly deliver a socially equitable transition. In Spain all net-zero pathways project economic gains and employment growth, as the country can rely on a domestic wind and solar industry as well on local nuclear expertise, to reduce the need for imported natural gas. In the UK a scenario relying exclusively on renewables falls beyond any socio-economic indicator. This is mainly associated with the overcapacity requirement foreseen for this scenario which increases the total system costs, displaces locally manufactured thermal capacity, and leads to negative employment balances. In Poland, which is highly reliant on coal to fuel its economy, any effort towards net zero is associated with negative socio-economic trade-offs. In particular, a transition relying exclusively on renewables would lead to more than 40% employment disruption in the mining sector and a modest growth in manufacturing jobs, associated with the maintenance of solar and wind facilities. Unevenly distributed job losses across the economy in this scenario, exacerbates the risk of stranded workers and labour conversion challenges, with gaps in income and status between different job categories.