Editing IPCC:AR6/WGIII/Chapter-5 (section)

=== Box 5.10 | The Informal Sector and Climate Mitigation ===

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The informal economy represents a large and growing portion of socio-economic activities ( [[#Charmes--2016|Charmes 2016]] ; [[#Muchie--2016|Muchie et al. 2016]] ; [[#Mbaye--2018|Mbaye and Gueye 2018]] ), including much of the work done by women worldwide. It accounts for an estimated 61% of global employment in the world; 90% in developing countries, 67% in emerging countries, and 18% in developed countries ( [[#Berik--2018|Berik 2018]] ), representing roughly 30% of GDP across a range of countries ( [[#Durán%20Heras--2012|Durán Heras 2012]] ; [[#Narayan--2017|Narayan 2017]] ). Due to its importance, policies which support informal-sector climate mitigation activities may be extremely efficient ( [[#Garland--2015|Garland 2015]] ). For example, environmental and energy taxes may have negative gross costs when the informal sector dominates economic activity since these taxes indirectly tax the informal sector; informal production may substitute for energy-intensive goods, with strong welfare-enhancing effects ( [[#Bento--2018a|Bento et al. 2018a]] ). The informal sector can assemble social and financial capital, create jobs, and build low-carbon local economies ( [[#Ruzek--2015|Ruzek 2015]] ). Constraints on small and informal-sector firms’ ability to build climate resilience include financial and data barriers, limited access to information technology, and policy exclusion ( [[#Kraemer-Mbula--2016|Kraemer-Mbula and Wunsch-Vincent 2016]] ; [[#Crick--2018a|Crick et al. 2018a]] ; [[#Crick--2018b|Crick et al. 2018b]] ).

Informal-sector innovation is often underrated. It gives marginalised people access to welfare-enhancing innovations, building on alternative knowledge and socially-embedded reciprocal exchange ( [[#Jaffe--2019|Jaffe and Koster 2019]] ; [[#Sheikh--2019|Sheikh 2019]] ; [[#Sheikh--2020|Sheikh and Bhaduri 2020]] ). Large improvements in low-emission, locally-appropriate service provision are possible by facilitating informal-sector service providers’

Box 5.10

access to low-energy technologies (while taking care not to additionally burden the unpaid and marginalised), through such means as education, participatory governance, government policies to assist the informal sector, social services, health care, credit provision, and removing harmful policies and regulatory silos. The importance of the informal economy, especially in low-income countries, opens many possibilities for new approaches to decent living standards service provision along with climate resilience ( [[#Rynikiewicz--2006|Rynikiewicz and Chetaille 2006]] ; [[#Backstränd--2010|Backstränd et al. 2010]] ; [[#Porio--2011|Porio 2011]] ; [[#Kriegler--2014|Kriegler et al. 2014]] ; [[#Taylor--2014|Taylor and Peter 2014]] ; [[#Brown--2016|Brown and McGranahan 2016]] ; [[#Chu--2016|Chu 2016]] ; Satterthwaite et al. 2018; [[#Boran--2019|Boran 2019]] ; [[#Hugo--2019|Hugo and du Plessis 2019]] ; [[#Schröder--2019|Schröder et al. 2019]] ; [[#Javaid--2020|Javaid et al. 2020]] ).

Public information and understanding of the CO 2 -eq emissions implied by consumption patterns can unleash great creativity for meeting service needs fairly and with lower emissions ( [[#Darier--1999|Darier and Schüle 1999]] ; [[#Sterman--2002|Sterman and Sweeney 2002]] ; [[#Lorenzoni--2007|Lorenzoni et al. 2007]] ; [[#Billett--2010|Billett 2010]] ; [[#Marres--2011|Marres 2011]] ; [[#Zapico%20Lamela--2011|Zapico Lamela et al. 2011]] ; [[#Polonsky--2012|Polonsky et al. 2012]] ; [[#Williams--2019|Williams et al. 2019]] ). Community-based mapping, social learning, green infrastructure development, and participatory governance facilitate such information-sharing ( [[#Tauhid--2018|Tauhid and Zawani 2018]] ; [[#Mazeka--2019|Mazeka et al. 2019]] ; [[#Sharifi--2020|Sharifi 2020]] ), strengthening mitigation policies ( [[#Loiter--1999|Loiter and Norberg-Bohm 1999]] ; [[#Stokes--2017|Stokes and Warshaw 2017]] ; Zhou et al. 2019).

Since informal settlements are usually dense, upgrading them supports low-carbon development pathways which leapfrog less-efficient housing, transport and other service provision, using locally-appropriate innovations (Satterthwaite et al. 2018). Examples of informal-sector mitigation include digital banking in Africa; mobility in India using collective transport; food production, meal provision, and reduction of food waste in Latin America (e.g., soup kitchens in Brazil, community kitchens in Lima, Peru); informal materials recycling, space heating and cooling, and illumination ( [[#Hordijk--2000|Hordijk 2000]] ; [[#Baldez--2003|Baldez 2003]] ; [[#Maumbe--2006|Maumbe 2006]] ; [[#Gutberlet--2008|Gutberlet 2008]] ; [[#Chaturvedi--2011|Chaturvedi and Gidwani 2011]] ; [[#Nandy--2015|Nandy et al. 2015]] ; [[#Rouse--2016|Rouse and Verhoef 2016]] ; [[#Ackah--2017|Ackah 2017]] ).

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