Does climate change require us to rethink social protection?

Climate change is already impacting the lives of people worldwide, and its effects will pose a severe threat to the achievement of sustainable development objectives going forward, as the latest IPCC report highlights. This has significant implications for poverty reduction, inequality and other social protection outcomes. Social protection systems will therefore have to systematically take into account climate change, including potential contributions to climate change mitigation, adaptation and risk management. This blog aims to prompt thinking around if and how this could work, and what new approaches, trade-offs and potential synergies might emerge for social protection systems in a future increasingly shaped by climate change.

Can social protection contribute to climate-resilient development?

The question whether and how social protection can contribute to climate change adaptation (i.e. adjustment to actual or expected climate and its effects), climate change mitigation (i.e. reducing or avoiding emissions and capturing/storing carbon in biomass, such as trees or soil) and risk management, is (re)examined in the latest report on Climate Change 2022: Climate, Adaptation and Vulnerability (IPCC 2022) from the Intergovernmental Panel on Climate Change (IPCC), published on 28 February 2022.

The report paints a clearer picture of current climate change impacts than previous reports: climate-related impacts on development are already being observed, including not only immediate/physical impacts, but also secondary economic damage, impacts on individual livelihoods, human health and food security, loss of property and income, with adverse effects on gender and social equity. The report also stresses that the future effects of climate change – adding to and increasing other stresses such as poverty, inequality, and disease – will pose a much more severe threat to the achievement of sustainable development objectives. As part of “climate-resilient” development (trajectories that combine adaptation and mitigation to realise the goal of sustainable development), social protection is also referred to in the IPCC report due to its potential to promote resilience by helping people absorb and adapt to these impacts, which is by now well documented. At the same time, the report’s findings suggest that there are few examples to date of synergies between social protection and climate change mitigation.

While the potential of social protection to promote resilience is certainly more firmly established, there is a growing conceptual and evidence base for the potential of social protection to contribute to climate change mitigation. The contribution of social protection is most direct – and empirically best documented – for public employment programmes: For example, the total reduction in net greenhouse gas emissions from land management under Ethiopia’s Productive Safety Net Program (PSNP) is estimated at 1.5% of the emissions reductions in Ethiopia’s Nationally Determined Contribution for the Paris Agreement. Different social protection instruments, including social assistance (e.g. cash transfer programmes) and social insurance (e.g. unemployment protection or pensions) can enable climate change mitigation through other channels: They can compensate those who are adversely affected by the transition and help contribute to the implementation and social acceptance of climate change mitigation policies. Many examples – often linked to the removal of fossil fuel subsidies or sometimes the introduction of carbon pricing – show that not offering adequate and credible compensation can lead to social unrest and eventually the withdrawal of the policy. Social protection can also give people the financial leeway to avoid environmentally harmful practices that are driven by economic necessity (e.g. overuse of natural resources, including deforestation) and to adopt more environmentally friendly technologies or behaviours, particularly when coupled with behavioural change interventions or asset transfers. Social protection also provides the necessary security for entrepreneurial risk-taking, especially in sectors in harmony with the ecological transition.

Nonetheless, there is still – as shown by the IPCC report – limited recognition of the potential of social protection for a just transition (maximising the social and economic opportunities of climate action, while minimising and carefully managing any challenges) and its contribution to a double dividend: supporting climate change mitigation while also protecting people from negative impacts and strengthening their resilience.

What are the trade-offs between green and social protection objectives – and how can they be minimised?

Decarbonization will be driven by investments and changes in sectors that are responsible for most greenhouse gas emissions such as power generation, housing (incl. energy use), transportation, industry and land use (incl. agriculture). If not managed well, this process may result in major affordability challenges at both societal and individual level until sustainable options become more economically competitive, especially for lower-income households. This will require transition policy packages to not only promote adoption of low-emissions and energy-efficient technologies, but also provide equitable and adequate support to ensure they are accessible to and affordable for everyone. Failure to do so could affect productivity and have negative economic and social consequences, undermining adaptive capacity and equity. There are also specific trade-offs relating to land use, including whether adapted and sustainable practices that are potentially less productive in rural areas meet poverty reduction and productivity objectives.

Social protection has the potential to minimise some of the trade-offs between climate change mitigation and adaptation. More sustainable management of natural resources (to capture and store carbon), for example, may reduce the income of fishermen, farmers or forestry-dependent communities, thereby lowering their adaptive capacity. This can be offset through income support or public employment programmes. Green infrastructure may come at a higher cost in the short run and push out lower-income and marginalised groups, potentially also leading to job losses in certain sectors (e.g. taxi or rickshaw drivers). A combination of different social protection instruments throughout people’s lives (USP2030 Action 1), such as unemployment protection linked to active labour market interventions, can mitigate such impacts.

Finally, there are distributional issues: climate change disproportionately affects the people and countries least responsible for causing it, and those who are wealthier and less vulnerable may be less motivated to contribute to meeting climate targets. Here a justice argument can be used at national level to make a compelling case for more sustainable and equitable financing of social protection (USP2030 Action 4): Because some people and population groups are more affected not only by climate change but also by transition policies, these policy packages need to anticipate and address inequalities – and ensure a just transition – in order to be politically acceptable and sustained. As stated in the ILO Guidelines for a Just Transition (ILO 2015, p.6), “coherent policies also need to provide a just transition framework for all to promote the creation of more decent jobs, including as appropriate: anticipating impacts on employment, adequate and sustainable social protection (…), skills development and social dialogue.“

What are the implications for social protection systems and programming: Do we need extended or new social protection measures to deal with increasing risks?

When examining the implications of climate change, transition policies and such trade-offs for social protection systems and programming, it is first of all important to recognize that achieving the core objective of USP2030 – universal social protection throughout the life cycle so that no one is left behind – would be a key contribution to climate-resilient development. The speed and severity of climate change and the transition as well as current limitations of social protection systems require us to reflect on how existing approaches can be adapted or new ones developed to meet these new challenges.

Transitioning to a sustainable economy and society will have significant implications for large parts of the population: if or how they generate their income, how (and even where) they live, in which environment, what and how they consume (at what price), their health and the education they have and need. Some countries have started rethinking social protection and experimenting with existing or new measures and mechanisms. Across the OECD, some are, for example, offering additional heating allowances for low-income households (as e.g. in France in the form of regular/annual “energy cheques”), or expanding coverage by introducing new categories of beneficiaries for (energy) assistance programmes as in Spain. There are also civil society calls for a separate “climate allowance”– a universal payment to all households (based on the principle of USP2030 Action 2) as compensation for the higher cost of emissions-free energy, irrespective of/in addition to any other social protection provided. Evidence on the effectiveness of such measures is however limited and mixed, as they often do not address underlying root causes (such as poverty coinciding with low energy efficient housing, see e.g. Spain). In Spain, energy poverty reportedly decreased significantly in two (colder) regions where guaranteed minimum income schemes were in operation – now introduced nation-wide as “Minimum Living Income”. This example is an indication that, in the long term, regular and predictable social protection mechanisms may prove more effective than one-off ad hoc support.

Throughout this transition, the effectiveness of social protection to achieve its core objectives and fully utilise its potential for climate-resilient development (adaptation and mitigation) will depend on how systematically key principles are applied, such as universality, adequacy, predictability or sustainability, for example. At the same time, it is important to consider social protection as part of the broader policy package to support the structural transformation.

While different country contexts may warrant different policy priorities and solutions to be determined with all relevant stakeholders (in line with USP2030 Actions 3 and 5) – and irrespective of the contribution of social protection to climate action: Failure to mitigate will make future social protection as part of overall climate change adaptation more costly and challenging. It is therefore important to continue to explore potential synergies and co-benefits, and at a minimum integrate climate change considerations into social protection to help enhance mitigation and support future adaptation needs.

Check the links to learn more about the Social Protection and Climate Change Working Group and USP2030!

References

• ILO (2015). Guidelines for a Just Transition towards Environmentally Sustainable Economies and Societies for All. International Labour Organization. Geneva, Switzerland. Accessible:  https://www.ilo.org/global/topics/green-jobs/publications/WCMS_432859/lang–en/index.htm
• IPCC (2022). Climate Change 2022: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [H.-O. Pörtner, D.C. Roberts, M. Tignor, E.S. Poloczanska, K. Mintenbeck, A. Alegría, M. Craig, S. Langsdorf, S. Löschke, V. Möller, A. Okem, B. Rama (eds.)]. Cambridge University Press. Accessible: https://www.ipcc.ch/report/ar6/wg2/

This is the sixth blog post in the USP2030 blog series. It was first published on 25 March 2022 on socialprotection.org