Opinion – Rodrigo Tavares: The energy transition has to be fair

In 2022, Portugal, South Korea, Costa Rica, Colombia, France or Brazil will have elections for the head of government and/or state. In all these elections, whether for convenience or conviction, the issue of energy transition will emerge – the transition from an energy matrix focused on fossil fuels to a low carbon one, based on renewable sources.

Unsurprisingly, the discussion will be marked by two groups. All those who believe that decarbonization is the great national goal and must be accelerated to face climate change, our greatest civilizational challenge, participate in the first one. Exclusive priority must be given to mitigation and adaptation actions to this environmental crisis.

Members of the second group are skeptical by nature. They reject any human responsibility, claiming that climate change is natural and cyclical.

The reading of the second is wrong, while that of the first is partial.

The electoral debate and the companies’ commitments should, alternatively, reside in the objective of the just transition. The decarbonization of the planet and the transformation of our economies must be carried out taking into account the labor and social effects of the transition. Nobody can be left behind.

In a country like Brazil, abundant in ethnic bifurcations, economic entrenchments and regional monopolies, the decarbonization of the economy can lead to the acceleration of these cleavages or, if done in a systemic and fair way, to their gradual attenuation.

The just transition is mentioned in the Paris Agreement and is integrated into the budgetary menu of the European Union. At the UN Climate Summit in 2019, half a hundred countries pledged to support it. But the imperative is not yet part of the corporate narrative or a national policy priority.

In Portugal, the electoral program of the Socialist Party, currently in power and ranked first in opinion polls, does not mention a fair energy transition even once. The focus is on reducing GHG emissions and increasing the weight of renewable energies in electricity production. With elections on January 30, the Portuguese were already able to watch the astonishing sum of 32 debates on TV between the various party leaders without the issue of climate change being elevated to a national priority.

In Brazil, the largest companies, such as Petrobras, Vale or Ambev, have already made commitments to the climate agenda and the Paris Agreement. But the just transition is still neglected.

The biggest international oil companies – BP, Chevron, ExxonMobil and Shell –, which will be severely affected by the energy transition, saw their combined capitalization shrink 40%, from US$980 billion (R$ 5.4 trillion) to US$570 billion. (R$ 3.1 trillion), in the last decade. On the other hand, energy companies that have adapted to a just transition, such as Enel, Iberdrola, or NextEra, have appreciated by 200% in the same period (McKinsey data). As an example, Enel defends in a manifesto available on its website that the paradigm shift of the entire energy system has to be inclusive.

For decarbonization to be viable, public and corporate policies cannot be guided only by carbon dioxide, methane, nitrous oxide and sulfur hexafluoride – the quadrumvirate of greenhouse gases. Related topics such as the training of manpower, education, job creation, social inclusion, democratization of access to technology or industrial reconversion should be equally prioritized.

If the adverse effects of climate change go beyond the environmental arena, also environmental sustainability without social inclusion or economic justice becomes unsustainable. A sectarian vision of decarbonization will lead to increased social inequality, the hopelessness of workers, a drop in productivity and eventual labor and civil disturbances. It will affect the competitiveness of companies.

OECD, UN and ILO studies emphasize the feasibility of a just transition, with
a direct economic gain of US$ 26 trillion (R$ 143.5) by 2030 and a net gain of 24 million jobs by 2030. A just transition can be an oven of social and economic opportunities, serving as an engine of growth, generating decent green jobs and reducing poverty.

In Brazil, more and more often we will see politicians and companies adopt the concept of a just transition. But the formulation of electoral and corporate programs must include the contribution of those who are at risk of being adversely affected by decarbonization. In the 1980s, American activist Benjamin Chavis coined the term “environmental racism” to also refer to racial discrimination in environmental policymaking. Most of the victims in Brumadinho and Mariana were black. The majority of Brazilians affected by decarbonization could be black.

We cannot exclude anyone from formulating solutions for inclusion.