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Country archetypes for equitable transition

October 24, 2024

New World Economic Forum research highlights the close relationship between lack of access to green financing and technologies and the equitable transition to a greener economy. The report makes an urgent call for an institutional response to ensure an equitable transition and proposes metrics to increase transparency on equity implications.

“The transition to a green economy must be inclusive to be sustainable,” said Saadia Zahidi, Managing Director, World Economic Forum. “Supporting the transition of workers and addressing gaps in financing and access to technology is crucial to meeting both environmental and socio-economic goals. This report provides new data and tools to guide global leaders in making the green transition equitable for all.”

Different exposure to equity risks

The research emphasizes that equitable transition concerns countries across income and development levels. In the absence of readily available data on how climate policy and the actions of companies in key sectors directly impact economic equity, it is important to recognize that countries will have varied exposure to equity risks based on economic, institutional, demographic and geographical specificities.

While the exposure and drivers of equity implications of climate action vary, there are shared challenges and opportunities across countries. The report categorizes countries into six archetypes:

  1. Inclusive Green Adopters: High-income, service-driven economies making significant strides in reducing emission intensity through available green technologies while ensuring economic equity (e.g., France, Netherlands, Spain)
  2. Emerging Green Adopters: Upper-middle and high-income economies with significant industrial employment transitioning to innovation-driven economic models (e.g., Poland, Ireland, Italy)
  3. Fossil Fuel Exporters: Economies heavily reliant on fossil fuel rents and subsidized energy consumption, resulting in high-emission intensity (e.g., Kuwait, Saudi Arabia, United Arab Emirates)
  4. Growth Economies: Rapidly industrializing emerging economies with growing energy demand, balancing climate mitigation with socio-economic development (e.g., Brazil, South Africa, India)
  5. Frontier Economies: Low-income countries with large youth populations and low emissions per capita, in need of investing in the foundations for sustainable long-term growth (e.g., Nigeria, Bangladesh, Pakistan)
  6. Green Developers: Highly industrialized and technologically advanced countries leading in green technologies and business models (e.g., China, Germany, Japan, USA).

Understanding different channels through which climate action can create inequities, identifying vulnerable stakeholder groups, and increasing transparency through comparable, consistent as well as timely evidence can set the agenda for equitable climate action that serves both people and the planet. Ensuring the affordability and accessibility of goods and services is crucial in the green transition.

Source: World Economic Forum