Moves toward a low-carbon economy must heavily involve the population and include a raft of measures to ensure that vulnerable communities are not affected disproportionately, particularly in the short term, according to a report presented to a conference on Monday.
This need was made clear with the violent Yellow Vest protests that swept France in 2018 after President Emmanuel Macron tried to increase fuel taxes, the document, unveiled at the the Eli Hurvitz Conference on Economics and Society on Monday, said.
Those demonstrations, which called for economic justice, were named for the high-visibility yellow jackets that protesters wore. They followed attempts by Macron to raise fuel prices, which were seen to be hitting poorer people who commuted into Paris for work from the periphery.
The new report — “A Just Transformation to a Low Carbon Economy” — was based on two years of work by one of six high-level committees charged with preparing targets to reduce global warming gases by 2050. In line with the 2015 Paris Agreement on Climate Change, these targets must be submitted to the United Nations by the end of this year.
As part of an overall project called “A thriving economy in a sustainable environment,” the ministries of energy, industry, finance (which includes the National Planning Council) and transportation set up their own committees.
A fifth committee dealt with macroeconomics and the sixth — led by Prof. Natan Zussman, associate professor of Economics at Jerusalem’s Hebrew University, with support from the Israel Democracy Institute, focused on the social impact of implementing the targets and ways to cushion the blow to vulnerable populations, such as those working in fossil fuel industries which will eventually close down.
The entire process was supervised by the Environmental Protection Ministry and the Israel Democracy Institute.
Referencing both the Yellow Vest protests and the anger of US Rust Belt voters who had lost jobs in traditional industries and flocked to support President Donald Trump in the 2016 elections, Zussman’s committee consulted widely with civil society organizations in a bid to understand how to protect vulnerable populations while enabling them to take advantage of the benefits of a cleaner economy.
The report calls on the National Insurance Institute or the Central Bureau of Statistics, or other authorities, to kickstart the transformation by mapping which households are energy poor. This might mean that they cannot afford to properly heat or air-condition their homes; use old, polluting systems; or face problems with transportation to jobs, services and stores.
The next step, with the Labor Ministry a possible partner, would be to probe the potential harm that could be caused to vulnerable populations by steps such as taxes intended to discourage high carbon use and encourage a cleaner economy.
Measures that the government should consider, according to the report, include funding or subsidizing insulation of old walls, windows and roofs of vulnerable populations or providing financial help to buy solar panels for their roofs; cutting taxes and customs duties on energy-efficient air conditioners and heaters; incentivizing entrepreneurs to include enhanced energy efficiency in buildings that they renovate as part of urban renewal schemes; and investing in public transportation infrastructure for the rural periphery to relieve the burden of fuel taxes paid by poorer people living there — among them large numbers of Arab Israelis.
Another suggestion was to help the poor to upgrade their older, polluting and fuel-demanding vehicles to newer (secondhand), fuel-efficient and cleaner ones and to provide grants to have old vehicles taken to the scrapyard. Additionally, there could be tax incentives to encourage the purchase of newer replacements.
Expanding fiber optics for high-speed internet connection would cut energy-guzzling commuting by allowing more people to work, even partially, at home, the report suggests.
It further calls for incentives to encourage direct private investment in green sectors, expanding grants for green R&D, and factory grants or tax refunds against energy efficiency in the economy.
The report stresses the importance of funding training and retraining programs for vulnerable populations likely to lose their jobs in polluting industries, with the focus on training for the field of renewable energy, new and green production methods, recycling and the circular economy. Training in basic technological skills would help older and technically inexperienced workers to move to administrative jobs.
Underlining the importance of public involvement in plans for measures to cut carbon emissions, the report also recommends cuts in the value added tax (VAT) that would help poorer populations, which proportionately shoulder more of the burden than the better-off, to cope with other taxes that might be imposed to get to a net-zero-carbon economy.