Fairtrade and Climate Justice 

Based on Research by Dr Oliver Moore


The majority of greenhouse gas emissions have occurred in the last 30 years, and, since records began in 1850, over 90% of emissions have come from the places like Europe, US, (G8). Those who have contributed the least to the carbon crises should not have to pay the highest price to try and resolve it. Yet, vulnerable rural populations in the global south are currently paying the highest price.  Climate impacts are being seen in more frequent chaotic climate events like hurricanes, drought and  floods. And these are being added to pre-existing vulnerabilities like poverty, exclusion and exploitation. Fundamentally, climate justice  and a Just Transition need to include trade and economic justice, to ensure opportunities for everyone.

Fairtrade And Climate Justice

A Just Transition – Redressing historical injustices

A Just Transition has to take into account the ongoing impact of historical injustices and their living legacies in extreme poverty and economic exclusion. Clearly, the environmental damage caused by the wealthy world’s more excessive development models, including in particular the extraction and use of fossil fuels, has brought us to the point where we facing climate breakdown and ecological collapse. The people who caused and benefited the least from this, are now the ones who are suffering the most from it. There is thus an onus on the wealthiest nations and industrial sectors, to deal with the mess it has created, a mess still felt most acutely in the rural global south.

Just transition then, means economic, trade and climate justice coming together. It needs both climate mitigation and climate adaptation. It accepts that the global south is justified in focusing more on climate adaptation, as it has contributed so little to the green-house gas emissions load in the atmosphere. In seeking to balance the climate, trade-  and economic balance sheets – the 92% of global-north historic emissions – compared to the 8% historic emissions from global-south – should be the reference point in defining adaptive strategies for different parts of the world.

In Ireland for example,  “We emit more greenhouse gases than the poorest 400 million people on the planet. Almost unique in the EU, Ireland is failing to meet its obligations and is increasing its greenhouse gas emissions” according to Professor John Sweeney, Ireland’s leading climate change expert and member of the IPCC.

Where are we Now – Environmental Stresses


Greenhouse gas emissions and the need for the necessary reductions, need to be seen within an historical emissions, climate and trade justice framework. We must enable the significant improvement of social, economic and environmental situations for those in the poorest parts of the world for a just global transition to mean anything.

The vast majority of  greenhouse gas emissions have come from the wealthy countries described as the Global North –  the Intergovernmental Panel on Climate Change (IPCC) figures from1850 onwards estimate that 92% of excess emissions have come from this source. And while some parts of what is traditionally called the global south are speeding up their emissions- the BRIC countries of Brazil, Russia, India, China –  clearly climate and other environmental stresses are impacting rural farmers and land workers in the global south especially hard. (Hickel 2020)

Today, carbon dioxide levels in the atmosphere are at their highest level in at least 800,000 years; temperature records are constantly being broken in recent years, including in the arctic where unprecedented wildfires rage; wildfires and storms are more severe and may be causing other more severe weather occurrences; 

Stronger and more frequent weather extremes, from hurricanes to drought, temperature highs to flooding – are felt more, and with more severity, in the tropics: “The number of exceptionally hot days are expected to increase the most in the tropics…extreme heatwaves are thus projected to emerge earliest in these regions, and they are expected to already become widespread there at 1.5°C global warming (high confidence)” the IPCC states. Moreover, socio-economically it is more difficult for the rural poor to find the resources to both mitigate and adapt to climate change. The Tropics, the band of countries that lie within 10 degrees north or south of the equator, is where most commodities like coffee and cocoa are grown.

Environment and Biodiversity

With biodiversity it is a similar story for insects, birds and mammals.  Over half of Europe’s farmland birds have disappeared since 1980,  globally it is estimated that over 40% of all insects are threatened with extinction, and a  2018 study reveals that farmed poultry today makes up 70% of all birds on the planet, with just 30% being wild. The picture is even more stark for mammals – 60% of all mammals on Earth are livestock, mostly cattle and pigs, 36% are human and just 4% are wild animals. The interlocked nature of these crises is evidenced by the fact that  climate change is a key driver of biodiversity loss, after invasive species and  land use change. 

Producers in Sub-Saharan Africa

Producers in countries in Sub Saharan Africa face the most challenging circumstances of any commodity producers. In economic terms we see price volatility, increasing costs, low margins, lack of organising, and concurrently, a lack of access to affordable finance. These lead to increasing debt, more precarious work and lives, child labour and involuntary migration, among other severe problems. (OECD 2019) Environmentally, weather extremes brought on by increased climate breakdown; biodiversity loss and pollutants all impact on the ability to produce, from availability of clean water to changes in pest and disease behaviour. 

Socially, these climate changes impact the role of women and children everywhere. Rural women globally produce more food and work longer hours, yet have less of a say and less power in family and work/business life in much of the global south (UN FAO). Child labour is still too often a fact of life, out of economic necessity or more exploitative reasons, prevalent in cocoa production in West Africa. In the worst cases in west Africa, this still includes forced labour in cocoa plantations.

Fairtrade and Climate Justice

Fairtrade has its role to play here, in helping right the economic wrongs and also in contributing to climate mitigation and adaptation. 

The Fairtrade standards have rightly been focused on issues of economic justice from their inception. Moreover, it is a democratic right of the producer organisations to decide how to spend their premiums – which is how it should be. Finally, as has been established, a climate adaptation focus is justified in a climate justice context. Importantly, emissions from transport make up a small part of agri-foods overall green house gas emissions. Referencing the largest yet data set of food green house gas emissions, with data drawn from more than 38,000 commercial farms in 119 countries, Richie (2020) points out that transport is overall “a small contributor to emissions. For most food products, it accounts for less than 10%” of the overall total. (drawn from Poole and Nemecek 2018)

Fairtrade’s economic tools are part of necessary climate justice approaches

Fairtrade has primarily been focused on greatest needs of the rural poor in the global south, so economic justice has been the core focus. Fairtrade is a partnership that generates a minimum price and price premium. Minimum price gives stability, which allows farmers to plan and potentially borrow with a price guarantee behind them. The Fairtrade Premium is an additional sum of money which goes into a communal fund for workers and farmers to use – as they see fit – to improve their social, economic and environmental conditions. 

For cocoa, price premium and minimum price both increased recently: In 2019, as part of our effort to achieve decent incomes, we raised the Fairtrade Minimum Price for cocoa by 20 percent to US$2,400 per MT (FOB), and the Fairtrade Premium – also by 20 percent – to US$240 per MT.

Towards Living Incomes

But more is needed. As a frontrunner in promoting economic justice, Fairtrade is actively working towards establishing living incomes for producers and workers. This work has been ongoing since 2012; in 2017 a Living Income Strategy was developed. The work is being piloted in west African cocoa and the ways of working towrads living income are set out here).

Living Income – A Definition

Living income is defined as sufficient income generated by a household to afford a decent standard of living for the household members. Elements of a decent standard of living include: food, water, housing, education, health care, transport, clothing, and other essential needs, including provision for unexpected events.

(Fairtrade Living Income Strategy)

A Living Income Reference Price is based on the following key parameters:

  1. Cost of a decent standard of living (living income benchmark)
  2. Sustainable yields (productivity benchmark)
  3. Viable farm size (to fully employ the available household labour)
  4. Cost of sustainable production (in order to achieve the above mentioned yields).

Fairtrade estimates that in addition to its increased minimum price and premium for cocoa, an additional Living Income Reference Price (LIRP) of US$300 a ton is needed 

This living income work is progressing with a number of companies now involved. Tony Chocolonely are now paying a living income differential,  Ben & Jerry announcing in November 2020  a commitment to paying a higher price, an additional $600,000 over the next year to their 5,000 cocoa farmers. Way to go! Retailer LIDL’s latest range, is not only Fairtrade, but also contributes a supplementary premium of their own to move towards a living income. Lidl are working with the Kuapa Kokoo farmers’ cooperative.

Fairtrade and Climate work

Fairtrade has developed a voluntary climate standard with multiple wins including carbon insetting. This climate standard is intended for companies who have already made efforts to mitigate their carbon emissions and is a further way to support smallholders and rural communities to produce Fairtrade Carbon Credits and gain access to the carbon market.

Projects eligible for generating Fairtrade carbon credits fall into three categories:

  • Renewable energy projects such as solar thermal heating/electricity, solar photovoltaic, wind energy, hydropower, biogas heating/electricity
  • Energy efficiency projects such as improved cookstoves, water filtration/purification systems, energy saving lamps/fluorescent lamps
  • Forestry projects such as planting trees or replanting trees in a previously forested area

Many of these have the added benefit of being socio-economically, and, in gender and health terms, positive actions in themselves. Watering firework is time consuming and sometimes dangerous work conducted by women and children; moreover, open fires shorten lives though smoke inhalation and increase deforestation due to heat loss.

Importantly, companies purchasing Fairtrade Carbon Credits at the end of the supply chain must put in place a credible plan to reduce their emissions and increasingly compensate their emissions with Fairtrade Carbon Credits.

Climate Change Academies and Leadership

These are couple of examples of how Fairtrade has developed Climate Change Academies which help small producer organisations to make effective decisions around climate change; introduce disaster risk management and sustainable farming practices; increase use of renewable energies; increase income generating resilience activities such as diversification; develop best practice guides. These will help organisations transition sustainably. 

Fairtrade and The Environment

Fairtrade Standards

It is also important to point out that there are both a significant and increasing number of environmental components to the Fairtrade standards: a quarter of the criteria of the Fairtrade Standard for Small Producer Organisations (v1.5) are already environmental criteria, covering issues such pest management, pesticide use, soil management, water use, biodiversity and more. Many of these environmental components, of soil, water, pesticides and so on, were added recently, in 2019. 

In fact, of the 45 new elements to the standards added in 2019, one in three are environmental including; 

  • minimising the use of herbicides
  • identifying land at risk of erosion
  • implementing measures to enhance soil fertility
  • training members on sustainable water use
  • avoiding deforestation or impact on carbon storing ecosystems
  • preventing deforestation
  • protecting and enhancing biodiversity
  • adapting to climate change and reducing green house gas emissions

Work is also being done to improve data collection, monitoring and evaluation and so on, to make positive environmental impacts more measurable. There are strong and increasing synergies with other environmental standards, in particular  with organic certification. 

Fairtrade and the UN Sustainable Development Goals (SDGs)

Given the breath of Fairtrade’s work, we have touch points across all seventeen SDGs. However given our focus on supporting marginalised farmers and workers, we are emphasising our role the 8 SDGs Fairtrade focuses on 

Farmer organisations spend a significant amount of the extra money they receive in areas covered by the SDGs, this investment is shown as  percentages roughly on which SDGs the premium is spent on.

Related Media