Trend: Who can afford the green and digital transition

A trend indicates a direction of change in values and needs which is driven by forces and manifests itself already in various ways within certain groups in society

To ensure widespread acceptance of the digital and green transition, lower-income and more vulnerable parts of society should also actively benefit from the transitions. Those who face energy poverty and lack digital skills or connectivity are at a heavy disadvantage. The transitions should improve their situation instead of bringing additional hardships.

On the other hand, the digital and green transition is likely to create new employment and different engagement opportunities if supported by the right policy mix. Ensuring from the beginning that these new opportunities are in line with the workers’ values, public health, working conditions, fundamental rights, living standards is key. In addition, the acquisition of skills that would enable people to be part of the transition must be supported through different instruments and EU and Member State level.

This Trend is part of the Megatrend Widening inequalities

Manifestations

Developments happening in certain groups in society that indicate examples of change. 

Housing inequalities

House prices have increased by 7.4% in the European Union in the third quarter of 2022, compared with the same quarter of 2021. During the period 2010 to 2021, house prices gained 34%, while rents increased just 16%. On a country-by-country basis, house prices increased more than rents in 18 of 27 EU member states. Housing costs seem to rise more for poor than for rich people shown for the US. This trend could accelerate existing inequalities, exclusion, and segregation. In addition, younger generations are considerably less likely to own their own home than older generations were at the same age.

Signals of change:

The 'Green Transition’ could boost future employment

The twin transitions will result in significant shifts in the EU labour market and related skills. Policies delivering a 55 % reduction in greenhouse gas emissions in the EU by 2030, compared to 1990 levels,  could lead to a net increase in jobs of up to 884, 000 or +0.45% by 2030,
compared to a business-as-usual scenario. This increase could take place in several sectors, from the electricity supply sector to renovation and decarbonisation of the existing building stock, increased electrification of transport, circular economy etc.  For this to happen, policy needs to focus up- and reskilling and providing support to workers who will need to change occupation, sector or location.

Signals of change:

Digital evolution leading to enough income without working

The Internet facilitates for a more efficient matching between the demand and supply of labour, products
and tasks. Service providers can divide complex tasks into a set of cheap, routine mini-tasks allocated to workers around the world. In addition, high use of robots, data analytics and customised software could create greater opportunities at the point of earning enough income without working or with less work and much more flexibility. Statutory working hours, minimum wages, taxes and benefits are currently being challenged by new models. Attention should be given to the potential polarisation between high-skilled and low-skilled jobs and between high-paying and low-paying jobs.

Signals of change:

Large inequalities in carbon emissions

Global income and wealth inequalities are tightly connected to ecological inequalities and to inequalities in contributions to climate change. Currently, the richest 10% of Europeans emit per capita more than three times as much as the rest of Europe’s citizens. These inequalities are not just a rich versus poor country issue. There are high emitters in low- and middle-income countries and low emitters in rich countries. So far, climate policies such as carbon taxes have often disproportionately impacted low- and middle-income groups, while leaving the consumption habits of wealthiest groups unchanged. Addressing inequalities in carbon emissions is essential for tackling climate change within the green transition.

Signals of change:

Interesting questions

What might this trend imply, what should we be aware of, what could we study in more depth? Some ideas:

• What if the green transition would fail for the most vulnerable?
• Should the access to natural resources be limited to a few?
• During and after the transition, will the gap between rich and poor become even bigger?
• What if these transitions polarized the society even more?