Employment policies, social dialogue, structural reforms, and investments should be carried out in parallel
Jakarta (ANTARA) - The catastrophic impact of climate change on people and the economy has prompted APEC members to make the transition to low-carbon economy.

However, such a shift needs to promote equity and inclusivity, according to a recent study published by the APEC Policy Support Unit.

"There is no denying the impact of climate change on our economy and society. For example, without climate change action, the APEC region could absorb losses of up to 18.3 percent of the GDP (gross domestic product) by 2050," according to Rhea C. Hernando, a senior researcher with the APEC Policy Support Unit.

"There are also significant health consequences—rising temperatures could worsen respiratory illnesses while frequent rainfall could give rise to outbreaks of malaria and dengue fever," she pointed out.

It is estimated that by 2030, the direct costs of climate change to health could reach around US$2-4 billion per year. The APEC region pumped out 60 percent of the global greenhouse gas (GHG) emissions in 2019.

"To combat climate change, reducing GHG emissions is crucial, and decarbonization is necessary," Hernando stated.

"Take fossil fuels, for example. They contribute significantly to climate change, accounting for more than 75 percent of the GHG," she remarked.

The policy brief (the study) titled, "Transitioning to a Sustainable Economy while Ensuring Inclusion," warns that the climate crisis will disproportionately impact vulnerable groups, such as women, the poor, workers, people with disabilities, and indigenous people across the region.

It is important to understand that pursuing a low-carbon economy should not be at the expense of equity.

"The transition to low carbon should ensure their inclusion, particularly their capacity to access decent work opportunities. One way of ensuring inclusion while doing this is by adopting the just-transition framework," Hernando remarked.

She further noted that the prime directive of a just transition is to create "decent work" opportunities, support people whose livelihoods are highly dependent on carbon-intensive sectors, and reduce the negative impact of the shift to a low-carbon economy on marginalized groups.

"Employment policies, social dialogue, structural reforms, and investments should be carried out in parallel," she pointed out.

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The policy brief details seven policy options to be taken by APEC member economies in implementing the transition: first, actively encouraging de-carbonization; second, avoiding new sources of carbon lock-in; third, generating opportunities to preserve economic stability; fourth, providing assistance to workers and communities affected by the shift; fifth, addressing environmental damage; sixth, implementing support measures to mitigate economic and social inequities; and seventh, ensuring an inclusive and transparent planning process based on social dialogue.

Supportive labor market policies play an instrumental role in ensuring that communities and affected groups thrive in a low-carbon economy.

It means striking a balance between providing financial support and social protection for job losses or workers’ displacements and expanding opportunities for education, reskilling, upskilling, and training.

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According to the policy brief, trade and investment policies could also be further adjusted to spur green industries and boost green jobs and innovation.

Structural reforms emerge as the other crucial element to a successful transition to green economy. These reforms require macroeconomic policies that encourage sustainable production and consumption and a conducive environment for sustainable enterprises.

Digitalization has the potential to significantly accelerate the shift to low carbon. Digital technologies could be applied across sectors to improve energy efficiency and reduce GHG emissions.

However, the policy brief points out that digitalization comes with its own set of challenges, comprising inadequate infrastructure, risks relating to cybersecurity and data privacy, as well as legal and regulatory challenges that should be sufficiently addressed to keep up with the dynamic digital changes and prevent risks from materializing.

"Commitment to social dialogue and stakeholder engagement is paramount in ensuring the success of the transition," according to Glacer Vasquez, a consultant to the Policy Support Unit, who co-wrote the policy brief.

"Since the objective is to ensure inclusion and promote equity, these dialogues and engagements need to include vulnerable and under-represented groups," Vasquez stated.

By applying a just transition framework, member economies put the welfare of the society and communities first. Such a mindset will affect actions taken by governments and steer policies toward building a sustainable and inclusive future for all.

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Reporter: Yuni Arisandy Sinaga
Editor: Fardah Assegaf
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