Green European Journal: We often hear about climate inequality, but what does it mean exactly?

Lucas Chancel: I am interested in how different kinds of inequality relate to environmental issues. Who pollutes? Who is affected by pollution? Who can afford to pay for decarbonisation? And how does the ecological transition run up against questions of inequality?

Climate inequality has at least three aspects. First, unequal exposure to the impacts of climate change. As individuals, we are not all affected in the same way. Nor are countries affected in the same ways; some places face higher levels of warming than others. And for countries that are already experiencing high temperatures, an extra degree is not the same as for places with more moderate climates. Within countries, living standards, income, and wealth significantly affect how vulnerable people are to climate shocks.

Second, inequality of responsibility. There are very clear differences both between rich and poor countries and within each country. In rich countries, there are big polluters and then much smaller polluters. Poor countries pollute less on average, but the elites of the emerging world, who like to hide behind the multitude, are often found among the major polluters.

Finally, inequalities around the capacity to act. We are not all equally able to act on the transition: to change our car, renovate our home, or protect our house from drought or flooding.  At the global level, the Climate Inequality Report 2023 finds that the half of the world with the lowest emissions – more or less the least well-off – is responsible for only 12 per cent of total emissions. Yet this half will bear 75 per cent of the damages caused by climate change as measured by relative income loss. To pay for the transition, you need assets, and so there is a glaring asymmetry in the capacity to act. That the world is very unequal is a surprise to no one, but the level of inequality is extremely striking. The poorest 50 per cent of the world own less than 3 per cent of all wealth globally.

These three dimensions of global climate inequality – exposure to climate shocks, emissions, and capacity to act – illustrate the immense tensions of today’s world. Those who are most affected pollute the least and at the same time have the least capacity to act on the problem.

How will the impacts of climate change deepen existing inequalities?

Climate impacts have already aggravated inequalities between countries. We are already 1.3 degrees above pre-industrial levels, and tropical and subtropical countries have been hit hardest. Even at this stage, poorer countries would have more economic resources were it not for the damage caused by rising temperatures.

Within societies, climate change represents a series of shocks: heatwaves, floods, companies that are forced to relocate, and so on. These shocks have the greatest impact on the poorest, who have no financial cushion to help them bounce back. In many poor countries, the poorest 40 per cent of the population is hit 70 per cent harder than the population average. The same is true in rich countries – take Hurricane Katrina in the US. Environmental disasters affect different parts of the population in different ways.

On the one hand, there is the unequal nature of exposure to risks. Some neighbourhoods are

How can we adapt solidarity mechanisms built for a past era to a world of low growth or even decline?

closer to flood zones and others lie on higher ground. Most of the time, the neighbourhoods that are less prone to flooding are the oldest and most affluent. Of course, anyone can be affected by climate shocks, but they tend to affect the poor most. Looking beyond the climate issue, it is the low-income urban areas that you’ll find close to industrial zones and chemical risk zones such as Seveso. [A 1976 industrial accident at a petrochemical plant in this northern Italian town is widely considered one of the worst human-made environmental disasters of all time.]

On the other hand, there are also unequal vulnerabilities to risks: not only are you more exposed, but your home is built with lower-grade materials, and you have nothing to fall back on. One of the great fundamental inequalities of our contemporary societies, whether in France, Uganda, or the United States, is that about half of the population has no assets, so no financial cushion. Climate change spells the multiplication of these shocks and therefore will deepen these inequalities in our already unequal societies. But not everything is written in the stars. A strong welfare system and

forms of public insurance that provide universal coverage can break these vectors of inequality. Social protection is therefore one of the key challenges of our time. How do we increase the level of social protection in rich countries, and how do we create new welfare systems in less rich countries? The welfare state needs to take account of new environmental risks that were not on the agenda of its founders at the end of the Second World War.

Except that limits to growth, ageing populations, and the changing global economy all make welfare states harder to fund. Can we honestly afford to extend social protection to mitigate environmental risks as well as poverty?

Let’s remind ourselves of something essential: from an economic point of view, our countries have never been as rich as they are today. France has never been this rich. The United States has never been this rich. The real problem is distribution, between private wealth and that which is owned collectively by the state, local authorities, and non-profit organisations. The question is not the total level of wealth, but who owns it. If anyone argues that we can no longer afford anything, remind them that we have phenomenal room for manoeuvre. We can look for resources and find new revenues, especially from wealth. Capital has been undertaxed for decades and has grown continuously.

The limits to growth and demographic ageing do pose real challenges, however. The social protection systems implemented at the end of the Second World War were created in a world of robust growth: catch-up growth, reconstruction growth, and “Les Trente Glorieuses” [a 30-year economic growth period in France, which began in 1945], as well as the baby boom, which has today become the grandparent boom. How can we adapt solidarity mechanisms built for a past era to a world of low growth or even decline? We need to rework financing mechanisms to break the link to GDP growth and tax the stock of wealth (assets) rather than the flows (GDP). Disconnecting how we pay for the welfare state from GDP means seeking more resources from the wealthiest and from the transmission of wealth through inheritance.

We also need to look at the under-recognised costs of environmental degradation. For instance, a large proportion of today’s chronic diseases are related to environmental factors. Improving the state of our environment must therefore be part of our thinking on a systemic framework for social protection. Prevention should be a much more integral part of our health policies, thus reducing the pressure on funding.

The real cost of environmental damage is grossly underestimated. Taking it more into account would reduce the cost of environmental action. Fossil fuels receive hundreds of billions of euros in subsidies every year. Meanwhile, the cost to health systems is enormous in terms of respiratory and cardiovascular diseases. If we cut fossil fuel subsidies, we would gain room to manoeuvre to the tune of several hundred billion euros per year.

The ecological transition calls for more democracy in the face of emergency, not less.

To what extent does inequality explain the new environmental conflicts emerging in Europe? Take the water conflicts in France and Spain or the farmers’ protest in the Netherlands.

Unequal access to decision-making is at the core of these environmental conflicts, which reflect the interests of powerful actors with elite-level contact lists. As described by [Catalan economist] Joan Martinez Alier, who has mapped cases of environmental injustice globally, these environmental conflicts form a kind of “International of Struggles”: we find similar tensions across Europe, but also in the Amazon and in Africa. It is the dialectic of public authorities justifying certain decisions using an economic metric in the face of activists putting forward other forms of legitimacy, from safeguarding biodiversity to respect for a broader democratic process. The question of how to go about the ecological transition calls for more democracy in the face of emergency, not less. Decisions taken by small committees that reproduce the defence of established interests only waste time.

Carbon pricing is key to the European Green Deal, and it will be extended to housing and transport in the coming years. It seems to be effective as an instrument but also socially regressive. Doesn’t the risk of a backlash demand another approach to the climate problem?

Experts have been warning for 20 years that if there is no social reform tied to carbon pricing, then we have all the ingredients for an explosion. In fragmented, tense societies where people already struggle to get around because of a lack of access to public transport and where an expensive electric car is simply unaffordable, extending carbon pricing to individual transport could be socially devastating. This was the exact spark that set off the Gilets jaunes protests in France in 2018. The main problem with carbon pricing is that it is socially blind. The Green New Deal was supposed to have been designed for low-income households, but the redistribution and support measures built into the European Green Deal are clearly not enough to prevent Gilets jaunes-type movements.

Carbon pricing should be a means to an end, namely reducing carbon emissions. An intermediate end is making environmentally friendly goods and services cheaper and making those that pollute more expensive. If there are no affordable alternatives to polluting goods and services, there will be no reduction in carbon emissions, and people’s purchasing power will suffer. The other, often-overlooked route to reducing the price gap between what pollutes and what does not is subsidising greener options. Doing both at the same time is even better. The US version of the Green Deal, the Inflation Reduction Act, bets on the subsidy option. In the American debate, the carbon tax is a bogeyman, and so they are moving forward through massive public subsidies. A whole portion of the US car industry will benefit from subsidies for electric cars and low-carbon energy production. In Europe, we need the carrot and the stick. Just relying on the stick would be socially damaging without greater support for poorer households.

What about the carbon consumption of the richest in society? How far will banning private jets actually get us?

Every extra tonne of carbon in the atmosphere counts, so it’s not just a gimmick. A private jet produces more tonnes of CO2 in an hour than most people’s commutes do in a year. But the example is even more important. We are entering a phase where everyone will have to make a considerable effort to transform their lifestyles. How can we expect the middle and working classes to do their part if the people at the top of the social ladder continue to emit the equivalent of a year’s worth of carbon in a few minutes?

Historically, when politicians turned to their populations to ask for considerable sacrifices, the wealthy were made to play their part too. In an April 1942 speech [setting out a seven-point national economic policy designed to stabilise the US economy for war], Franklin D. Roosevelt asked his fellow Americans to make huge sacrifices. He also asked Congress to ensure that the income of the wealthiest remained below a certain limit. It is a question of social cohesion and a new social contract for the transition. In France, airlines can no longer sell tickets for routes that can be travelled by train in under two and a half hours. But this does not apply to private jets. A hole in the scheme is a hole in the social contract.

Should the EU step in to regulate this kind of issue?

In a world where the issues are global, the largest scale is always the most relevant. But that doesn’t mean we shouldn’t start at the national level. And that is often the problem. The supranational level is too often used as an excuse for inaction. EU member states need to coordinate, but they must start to act. The European agreement on a windfall tax on energy companies was only made possible because some countries decided to go it alone. The European political consensus was built on unilateral measures.

Cities and regions often deal with climate impacts. National governments are responsible for taxation and social security. Europe’s Green Deal frames the transition, and all of these sit under global climate agreements and, ultimately, our planetary system. What is the most relevant level for fighting climate inequality?

What’s fascinating but also dizzying about this transition is that all levels are interconnected. You have to start at the local level and work your way up to the national, European, and international levels. Slowness and frustration at one level cannot be used to justify inaction at another. On climate inequalities, there is so much to do locally on damage and risk exposure – from urban planning and reorganising areas through public policies that benefit the poorest instead of targeting them. The greening of cities and the transformation of food systems will benefit those on the frontline of heatwaves, food inflation, and drought.

The national level is relevant for making laws and providing financial resources, and the European level can help pool risks. Sharing energy means thinking on the largest scale. A wind- and solar-powered electricity grid needs to be interconnected with other territories, for instance on days when there is not enough wind or sun. But the same logic can also apply to the ability to bounce back from shocks like hurricanes. The bigger the pool of risk sharers, the better insurance works, just like social security does nationally.

A European welfare state will allow us to share risks even more effectively. But this means creating European fiscal resources. While this is slowly emerging, we are still far from the famous “Hamiltonian moment” of American federalism. The European budget is around 2 per cent of GDP, while most member states have national budgets of around 50 per cent of GDP. We need to federalise both resources and spending to be ready to fight against the environmental inequalities of the future.