Just transition is critical across the EBRD regions because the economies in which we operate remain among the most carbon intensive in the world.
Their average greenhouse gas (GHG) emissions per capita are 20 per cent higher than those of comparable economies with similar populations and per capita incomes. Fifteen of the 38 economies where the Bank invests have a higher carbon intensity than the world average, and 10 are in the top 20. Similarly, 16 have a higher energy intensity than the world average.
The green economy transition will present significant opportunities for the EBRD regions. It is important to ensure that they are shared widely, while supporting regions and social groups which are vulnerable to the changes that transition will bring.
Certain opportunities can both support a green transition and tackle pre-existing inequalities. However, for some groups, these opportunities will remain beyond their reach, creating the need for additional support.
Those who are likely to experience challenges from a green economy transition include fossil fuel exporters, workers at firms reliant on the use of fossil fuels for energy production and consumption (such as carbon-intensive electricity producers and petrochemical manufacturers), communities whose livelihoods are directly and indirectly linked to fossil fuels, and poorer consumers who could be adversely impacted if policies are designed in a socially regressive way.
While a green economy transition will require transformation across multiple sectors, the coal sector, as well as the workers and communities who rely on it, appear particularly vulnerable in the short term.
This is important given the EBRD regions contain around 25 per cent of global coal reserves, and 240 coal-fired power plants. The sector supports over 1 million jobs both directly and indirectly.
Any support for vulnerable groups must consider the broader context of inequality. Since starting their transition to an open-market economy, countries in the EBRD regions have achieved remarkable progress in many areas, and people are just as satisfied with their lives as their peers are elsewhere.
However, despite this broadly positive picture, not everyone has benefited. Indeed, more than half of all people in these regions have not seen their earnings converge with those of people living in Western Europe.
Furthermore, those in the bottom 23 per cent of the income distribution are worse off than they were in 1989. Two-thirds of income inequality in the EBRD regions is accounted for by inequality within countries, while one-third is attributed to differences between countries.
This in turn drives substantial population shifts, both across and within countries, and from rural to urban areas, as people (often those with the highest skills) cross borders in search of better economic opportunities.
EBRD transition report 2016-17
EBRD transition report 2018-19