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Transitioning the global economy to Net Zero requires profound change. Central to that change are a range of critical levers, not least, proactive government policy incentives like taxes and regulations.¹ Inevitably, there will be winners and losers from this process, so it is no surprise to see strong opinions on the way transition is achieved. What is of more concern, however, is that so much disagreement remains on the need for transition at all.

Some of these disagreements may stem from bad faith opportunism, but many originate from genuine disbelief that human beings are the primary cause of climate change, as well as legitimate concerns about the economic and social ramifications of scaling down greenhouse gas-emitting industries that provide local employment.
Regardless of the motivation, the result is the same.

These disagreements risk slowing the course and speed of economies’ transition in several ways: First, the obvious threat to government policy, which could alter fiscal and regulatory frameworks, and in turn could reduce the incentives for corporates and consumers to make more sustainable choices. Second, the potential knock-on effects on companies that may seek to hedge against the risk of a slower shift to a low-carbon economy, leading to slower growth in the market for low-carbon solutions, and lower investments as a result. Finally, the chilling effect on corporate and investor transition commitments due to increased scrutiny or antagonized customers.

Coordinated action by various stakeholders along three lines could help address this issue:

1. Improve awareness regarding climate science
2. Promote the co-benefits of the transition, beyond emissions reduction
3. Focus on a Just Transition

One major factor behind disunity over carbon emissions is public skepticism. Large sections of many populations do not believe that human activity is the main cause of climate change (Figure 1) seemingly unaware that the scientific community has no doubt.

The most recent UN Intergovernmental Panel on Climate Change’s (IPCC) Summary for Policymakers, approved by scientists and governments of the 195 IPCC member nations, says it is “unequivocal” that “observed increases in well-mixed greenhouse gas concentrations since around 1750” are caused by human activities. It is also “unequivocal that human influence has warmed the atmosphere, ocean and land” and “very likely”² that “well-mixed GHGs were the main driver of tropospheric warming since 1979.”³ Notably, the skepticism does not appear to be driven by mistrust of scientists—theirs is the #1 or #2 most-trusted profession in almost every country polled as of 2019.⁴

Figure 1: Belief in climate science and belief in the transition are linked

Each data point represents a different country. There is typically less support for reducing the use of fossil fuels in countries where more people believe that climate change is mostly due to natural causes

Source: International Opinion on Climate Change 2022 by Meta and the Yale Program on Climate Change Communication; ��ţ��������

So, while it may sometimes feel redundant to make the case that climate change is happening and that it is due to human activity, it is essential that all stakeholders, from corporates to governments to NGOs and especially the media, underline that fact and avoid feeding the fiction that the scientific debate persists.

The arguments for transitioning go beyond reducing climate risk, with numerous potential economic and non-economic benefits. McKinsey estimates the transition could create roughly 200 million jobs worldwide by 2050, versus 185 million jobs lost.⁵ Another estimate expects a net increase of more than 18 million new jobs by 2030 in a 2⁰C warming scenario versus a 6⁰C baseline, with every region except the Middle East expected to gain jobs.⁶ What’s more, these jobs will likely be more sustainable than the ones they replace, contributing to output while being less exposed to transition risks, and reducing both physical climate risks and the degradation of natural capital.

Emphasizing the co-benefits of transitioning can draw greater attention to the upside, improving overall public perception and helping to build consensus. These co-benefits tend to fall into five broad categories—health, energy security, economy, social, and environment.⁷

An example of a health co-benefit might be the reduced incidence of respiratory illnesses due to better air quality; a social example might be the living standard gains from energy-efficiency retrofits of the existing building stock;⁸ an energy security example might include the reduced reliance on fossil fuel imports and, ultimately, cheaper, less volatile energy bills.

While the aggregate economic effects of the transition are expected to be positive, the disaggregated effects are what make it politically difficult. In contrast to the transition’s widely shared climate benefits, its negative consequences for certain sectors, fossil fuels being the most obvious, are highly concentrated, both economically and geographically. Closing a coal mine may benefit the environment, but that will come as little comfort to a community that depends on it as their main employer.

Concerns regarding the consequences for emissions-causing industries and the associated loss of economic activity and jobs are legitimate and demand a response. Ensuring that communities heavily exposed to the downsides of the transition are treated fairly is a key part of ensuring a Just Transition.⁹  This includes the recognition that there is a need for more investment in areas where industries and sources of employment will have to be replaced, and for funding to retrain those workers whose skillsets may become obsolete. Done right, transition compensation can turn opponents into supporters. In Germany for example, a “coal compromise” saw EUR 40bn allocated to regions with coal mines and coal-fired power stations to compensate them for the eventual loss of those assets. In return, those regions gave their support for a phase-out.¹⁰  Settlements of this kind will not always be achievable, but putting in place a framework to remove the economic sting from the transition’s tail is crucial for generating broad-based public support and acceptance.

The transition to a low carbon economy cannot be achieved in the timescale required without broad-based public support. But lack of awareness of the overwhelming scientific consensus on the causes of climate change as well as legitimate concerns about the potential adverse economic effects for some sectors and regions, are putting this at risk, potentially resulting in more global warming and environmental damage than would otherwise be the case. Disagreements cannot be avoided along the journey to Net Zero but achieving unity on the need to reach the destination soon would already be reason to celebrate.

The author is grateful for feedback from: William Nicolle, Jackie Bauer, Richard Morrow, Mike Ryan, Gillian Dexter, Krystal Miller, Judson Berkey.

¹ See ��ţ��������, (2023), Under One Roof for a discussion of helpful policy actions and incentives in the buildings sector.
² A likelihood between 90–100%.
³ IPCC, (2022), Sixth Assessment Report: Summary for policymakers, P4.
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5 McKinsey, (2022), The net zero transition: What it would cost, what it could bring.
⁶ Montt, G. et al., (2018), Does climate action destroy jobs? An assessment of the employment implications of the 2-degree goal, International Labour Review.
⁷ Finn, O. & Brockway, P. E., (2023), Much broader than health: Surveying the diverse co-benefits of energy demand reduction in Europe, Energy Research and Social Science.
⁸ ��ţ��������, (2023), Retrofit Revolution.
⁹ UNDP, (2022), What is just transition? And why is it important?
¹⁰ Meckling, J. et al., (2022), Why nations lead or lag in energy transitions: Policy-driven change hinges on institutions that support insulation or compensation, Science.