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What should be done to address one of the worst performing SDGs?

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By Galit Palzur

· 6 min read

In the 2023 Sustainable Development Report, which assesses global progress on sustainable development goals, it's noted that progress has stagnated worldwide since COVID-19. SDG 10, aimed at reducing inequality within and among countries, has been particularly challenging. UN Secretary-General António Guterres highlighted in his 2023 SDG Progress Report that SDG 10 is among the poorest-performing goals, stressing how astonishing it is that 26 individuals hold the same wealth as half the world's population. This is in line with the 2022 World Inequality Report, which revealed that in 2021, the poorest 50% of the global population owned just 2% of total global wealth, while the middle 40% owned 22%, and the richest 10% held a substantial 76%, as illustrated in the following figure created by Development Initiatives.

he poorest 50% of people own just 2% of wealthSource: Development Initiatives

The challenges facing progress on SDG 10 are not surprising, given its complex targets covering income growth, social inclusion, equal opportunities, policy adoption, financial market regulation, representation, migration, development assistance, and remittance costs. These goals aim to promote prosperity, inclusivity, social protection, equal opportunities, and discrimination eradication. Nevertheless, many parts of the world are witnessing a widening income gap between the rich and the poor. Disproportionate wealth allocation and external factors like armed conflicts and natural disasters primarily impact the most vulnerable groups, worsening existing inequalities within and among countries.

Addressing inequality is intrinsically linked to and dependent on the achievement of several other SDGs

One of the biggest problems hindering progress with SDG 10 is the fact that the reduction of inequality requires advancement in several other SDGs, which are either directly or indirectly linked to reducing inequality. For instance, advancing education access can redistribute wealth among people and advancing healthcare access by providing affordable and accessible healthcare services can reduce economic inequality as well.

Conversely, a lack of progress in reducing inequality can impede overall sustainable development efforts. Persistent inequality in poverty-stricken regions, for instance, makes eradicating poverty challenging. SDG 10 is essential for achieving multiple other goals, including reducing hunger, improving health, enhancing education access, promoting gender equality, creating decent work opportunities, and fostering peace. Moreover, addressing inequality is intertwined with climate action, as policymakers striving to meet GHG emission targets may inadvertently overlook the marginalized, contradicting the "leave no one behind" principle. This is why approaches such as carbon markets or carbon taxes should prioritize both environmental outcomes and inequality mitigation. Failing to develop them in tandem can hinder progress on SDG 10.

Elevated interest rates can further delay progress in reducing inequalities among and within countries

Another obstacle to SDG 10's progress in the foreseeable future is the current high-interest rate environment, impacting individuals, businesses, and countries. Elevated interest rates can compound inequality by increasing mortgage and borrowing costs, disproportionately affecting those with limited credit access or weaker creditworthiness, exacerbating financial inclusion challenges. Conversely, wealthier individuals benefit from high-interest rates, as they can save and invest, leading to increased wealth accumulation and greater wealth disparities among the population.

So, what should be done? Besides stating the obvious, like promoting gender equality, creating social protection programs, implementing fair tax policies, supporting marginalized groups and so forth, there are three macro issues that I would stress in this dynamic world. 

First and foremost, it's crucial to acknowledge the interconnected nature of the various SDGs, including SDG 10. Operating in isolation, or "working in silos," is counterproductive for addressing any of the SDGs, but this is especially true for SDG 10. When discussing these silos, it's essential to integrate two other significant frameworks established in 2015 into strategies for combating inequality as addressing the 2030 Agenda for Sustainable Development in isolation from the other two can also be seen as a form of working within a silo.

Efforts to combat inequality should be undertaken in a holistic manner, considering the 2030 Agenda alongside the Sendai Framework and the Paris Agreement

As the frequency and intensity of natural disasters are projected to increase, and disasters are known to exacerbate existing inequalities by disproportionately affecting vulnerable populations, it is imperative to also address the Sendai Framework for Disaster Risk Reduction 2015-2030 in conjunction with SDG 10. The third framework, the Paris Agreement, recognizes the principles of equity and common but differentiated responsibilities and incorporates the issue of human rights into its preamble. All three of these frameworks were established in 2015 by the United Nations with a 2030 target year in mind. They each contribute to the reduction of inequality through various approaches though the global community, currently, is falling behind in reducing inequalities within all three frameworks.

While there are synergies among the frameworks, practitioners and the public often focus on one at a time when discussing specific goals like reducing inequality. This siloed approach needs to change, given the interconnected nature of these frameworks. We must promote collaboration, partnerships, and cross-cutting practical initiatives to integrate climate action, disaster risk reduction, and inequality reduction for comprehensive and sustainable solutions.

The second critical issue is the insufficient data on inequality and its indicators in various global regions. The Sustainable Development Report 2023 highlights a severe data gap in countries concerning inequality indicators. This lack of monitoring and accountability hinders progress tracking and gap identification. Effective monitoring and accountability mechanisms are essential for reducing inequalities, as it's impossible to address the issue without understanding its scope. Utilizing artificial intelligence (AI) alongside traditional methods can help address this data gap.

AI may worsen inequalities but can also aid data collection and SDG 10 efforts

AI plays a dual role in addressing inequalities, with governments needing to consider its impact on employment and its potential to reduce disparities. A Nature study examined AI's role in achieving the SDGs and found that while it can contribute to inequality, it can also be harnessed to identify and alleviate sources of inequality. AI can create equitable algorithms for various applications or as Gabriela Ramos from UNESCO suggests, enhance access to public services, such as microfinance, healthcare, and remote learning, particularly in developing countries, thus driving development. AI's ability to collect, analyze, and leverage data can be a powerful tool in addressing the challenges outlined in SDG 10.

Thirdly, there's a pressing need to reform the global macroeconomic system to properly advance issues other than economic growth. This involves shifting away from solely prioritizing GDP growth and adopting more holistic well-being measures like the Genuine Progress Indicator (GPI) or the Human Development Index (HDI), which accounts for health, education, and income distribution, highlighting inequality and poverty. Where possible, leapfrogging from underdevelopment to sustainable, equitable growth should be the preferred approach. Additionally, addressing various other macroeconomic issues can help reduce global inequalities.

For instance, climate change is set to alter wealth distribution by reducing the significance of fossil fuels while creating new opportunities through climate regulations and technology. To counteract resulting inequalities, governments should adopt measures such as wealth redistribution, progressive taxes, and strong social safety nets. Without these actions, and in a world that primarily values GDP-driven growth, vulnerable communities may remain mired in poverty, impeding progress toward meeting the targets of SDG 10.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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About the author

Galit Palzur is an economist and a board member at Forum Dvorah, the Israeli Energy Forum and Kessler Projects for the World. She specializes in risk management of natural disasters, sustainability and climate change, and climate finance. She was the Director of the Economics Division of the Ministry of Environmental Protection and the Chair of the Bureau of the OECD Working Party on Climate, Investment and Development. Galit also mentors cleantech startups.

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