In the popular X-Men cinematic universe, Juggernaut is a formidable character whose momentum is impossible to stop – reminding me of the net zero carbon movement. To-date, more than 130 countries and an increasing number of companies have announced net zero or carbon neutral pledges. This will have a profound impact on our habits and routines as citizens of this planet and how future economies are structured and businesses are conducted.

As we progress towards a low carbon future, we must be cognisant of the potential consequences of climate transitions on our society. We must ensure an inclusive development approach to build resilience in society and prepare our workforce to embrace systemic changes that are about to come. Let me share three key considerations that I believe will be crucial to ensure a just transition¹ .

Manage disruptions in labour markets

As we green our economy, it will have far-reaching consequences across the labour force. For some occupations, greening will change the way of work, whereas for others, greening will significantly change or displace their jobs. As more countries adopt a low-carbon pathway, it is inevitable that some sectors such as coal, oil and gas, and other carbon-intensive industries, will be drastically impacted and could potentially be phased out. This will impact many households, particularly low-income populations that work in these industries.

Thus, we need to ensure there is a human capital strategy that is anchored on continuous reskilling and upskilling to help individuals to transition accordingly. In addition, we must broaden the range of social protection mechanisms such as unemployment insurance, education assistance, affordable training services, redeployment programmes and other facilitative measures. Such investments are necessary to protect incomes and maintain living standards for our general population while addressing systemic social risks arising from the low-carbon transition.

Need to scale up affordable green products for the masses

Many green products nowadays are more expensive than their carbon-intensive equivalents largely because carbon footprint is currently not factored into the cost of production. If green products continue to exist at premium prices, this will clearly have implications across our general population, especially for low-income households. As more countries introduce carbon pricing to reduce greenhouse gas emissions, carbon-intensive items are anticipated to become more expensive and will alter the demand-supply dynamics in favour of low- carbon or carbon neutral products in the future.

To ensure carbon pricing does not disproportionately impact the underprivileged communities, we need to ramp-up innovation cycles and reduce cost curves for green products as market evolve. In addition, we need a variety of solutions to prevent the unintended consequences of low carbon transitions, ranging from progressive policies, market incentive mechanisms, social assistance programmes to public-private partnerships to shorten the time required to bring economically-viable and innovative green products to market.

As we transition towards building a low-carbon economy, I hope the private sector will be able to capitalise on future market opportunities unlocked by carbon pricing and the growing number of environmentally conscious consumers. The tax relief for electric vehicles recently introduced during the tabling of Budget 2022 is unquestionably a step in the right direction. However, electric vehicles are still significantly more expensive than conventional internal combustion vehicles. While such incentives can potentially create greater demand for electric vehicles in the near term, more automakers need to start producing clean, emission-free vehicles that are affordable for all social classes.

Increase investments into adaptation efforts to build resilience among communities

A large proportion of Malaysia’s economic activities and populations are concentrated along coastal regions. Many communities also have a high degree of economic reliance on nature and agriculture to sustain their lives and livelihoods. Further, there are now higher frequencies of flooding which can disrupt their economic activities and normal lives.

As we look to decarbonise economic activities, we must plan to deal with the deteriorating effects of a warming planet, where rainfall patterns become erratic and sea levels continue to rise. As climate change impacts vary according to geographical factors, there is clearly no one-size-fits-all solution. In this regard, we need localised strategies which include investments into early warning systems and engineering solutions, practical emergency and crisis response plans as well as comprehensive engagements with all stakeholders impacted, including businesses and communities at large. Without proper planning and foresight, the potential socioeconomic repercussions arising from climate emergencies can also be detrimental to our society, especially for communities that live in high-risk locations.

If not addressed properly, the societal impacts arising from climate change can worsen existing inequalities that are entrenched in our society. To ensure we progress together, we need both government and private sector to work on mutually beneficial solutions, focusing on strong policy interventions as well as grassroot actions.

In my upcoming piece, I will be writing about key issues that I believe will become increasingly important in driving a socially sustainable business.

¹According to the European Bank for Reconstruction and Development, a just transition seeks to ensure that the substantial benefits of a green economy transition are shared widely, while also supporting those who stand to lose economically.