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People power: enabling the net-zero shift

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People are at the heart of the net-zero transition; wealthy individuals have capital to help finance climate solutions. While young people in middle-income, high-emitting countries will play a key role in determining future emission pathways. We expect an increasing focus on inclusive resilience, combining net-zero ambitions with a concern for social equity.

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What is clear but often overlooked, is that people, who are contributing to and impacted by the transition, are also central to innovating to deliver it. Entrepreneurial spirit, leadership capabilities and access to capital are all enablers of a fast-paced transition.

While much attention has focused on the point that population growth is generally expected to equal more emissions, less time has been spent on looking at how behaviours change in relation to sustainability factors linked to age and wealth. For instance, people’s potential for innovation, ability to energise and mobilise others and provide funding for sustainability solutions.

People are the bedrock of the economy, but their behavioural and entrepreneurial instincts are rarely considered in sustainability forecasting

As people move between age brackets and wealth profiles, behaviours change. For example, wealthier people can buy the surplus goods they want and spend more on carbon intensive leisure time, such as travel, whereas the youth and people in less wealthy economies tend to focus more on needs-based consumption. We expect people who are today over 65 and under 25 to be influential age groups for bending the emissions curve to limit temperature rises over the next 15 years. Over 65s because they will have the most wealth and time to allocate capital, and under 25s because they are entering the workforce as a full tech-enabled youth, with earnings potential. Together, these groups account for over 50% of global population today.

We expect the youth in middle-income countries to play an outsized role in the future of emissions control as 75% of today’s youth live in middle-income countries, representing 55% of total global emissions today. These are mainly growth economies across Asia, which could look to raise their ambitions on decarbonisation pathways.

While people contribute to emissions, it’s also important to remember that they are innovators, entrepreneurs and funders of solutions for the net-zero outcome. People are linked to funding the transition by providing various types of capital into the financial system, such as taxes from income and purchases, depositing savings at banks and building societies, entrepreneurial investment, and for high net-worth individuals, investment allocation decisions. These actions can drive capital flows towards funding aspects of net-zero delivery that are less well covered in the mainstream.

In addition, while people contribute to emissions and finance, they are also climate impact recipients, through disruptive events linked to warmer temperatures. Inclusive resilience is all about how net-zero social equity issues are factored into a transitioning world. There are many ways that people are affected by unpredictable extreme weather events, but a topic that is particularly relevant for the continuity of livelihoods is outdoor employment. Agriculture and construction are the most affected outdoor-oriented sectors, in our view. Together, they employ 33% of the global total working population.

Overall, we expect younger and older and wealthier people to become the mobilisers of solutions for net-zero outcomes in both financing the net zero transition and taking actions to increase resilience as climate impacts intensify over time. It is their innovation, leadership and allocation of capital that will bend the global emissions curve and accelerate the net zero transition.

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