‘Just transition’ is becoming a buzzword at UNFCCC pavilions, board rooms of financial institutions, and academia.
The 28th Conference of Parties (COP28), hosted by the United Arab Emirates (UAE), has directed significant focus on providing alternative jobs for carbon-intensive sectors, diversification of regions and compensation to companies for their loss of revenue.
What is a just transition?
Just transition is commonly defined as a set of social and economic policies to ensure both the process and outcomes of transitioning from fossil fuels to clean energy sources are fair and equitable for all.
This particularly applies to frontline workers and fenceline communities who are dependent on jobs and industries in carbon-intensive sectors, as they may be most affected by the disruptions this transition causes.
Just transition rhetoric at the UNFCCC resolutions: a brief history
Over the years, just transition considerations have become embedded in UNFCCC mechanisms and have been more widely used in climate finance.
Historically, trade union movements primarily used the just transition concept to protect workers’ rights, with the progressive labour movement playing a significant role.
As far back as thirty years ago, this idea was endorsed by trade union movements in the United States and later, unions in the European Union.
This happened long before it emerged as a climate change narrative.
Fast forward, the term appeared in UN resolutions from 2010 onwards. It appeared in the text of the Paris Agreement in 2015, and as a work program in the Talanoa Dialogue in 2017.
The most recent milestone in articulating justice in climate policy was the Silesia Declaration. This declaration is the outcome of COP24, which took place in the heart of Poland’s coal country, Katowice.
The Declaration demonstrated policymakers’ interest and willingness to move past the ‘jobs versus climate’ debate and focus on ‘community renewal’, which promotes economic diversification and jobs programs for coal-dependent regions.
Then came nation-state alliances’ focus on just transitions. At COP26, two years after its launch, the Powering Past Coal Alliance initiated a just transition taskforce to address workforce concerns for its 48 national and 48 local signatories.
Societal actors, such as civil society organisations, think tanks and philanthropies, and mainstream international development and energy agencies, such as the IEA, World Bank, and OECD, start coming on board in the popularisation phase, in the 2020s.
Recently, international cooperation in the form of Just Energy Transition Partnerships (JETP) – a new financial tool to catalyse private capital to accelerate energy transition and enable social protection mechanisms – emerged as a game changer.
Introducing just transition into financial tools: Just Energy Transition Partnerships
JETPs were first launched at COP26 in Glasgow to support a fair and equitable transition away from coal in industrialising countries that rely on fossil fuels, such as South Africa (2021), Indonesia (2022), Vietnam (2022), and Senegal (2023).
The JETP financing mechanism promotes a partner-country-led model for both phasing out/down of unabated coal-fired power generation, and the cessation of permits for the construction of new, unabated coal-fired power plants.
In the first year JETPs were launched in Indonesia and Vietnam, related ‘push’ policies drove interest in investing in decarbonised technologies.
However, despite developments around governance structure, a significant gap remains between the total financing that is needed, and committed public and private finance.
With so few grants in the mix – just 2 per cent in Vietnam and 7 per cent in Indonesia – the financial feasibility of JETP goals seems questionable.
Localised issues regarding the phasing out of carbon-intensive infrastructure also persist. In Indonesia, for example, the mineral mining industry’s dependence on coal plants makes them harder to decommission.
Another issue that remains important is social protection.
JETPs aim to provide schemes that protect the most vulnerable communities from the potential disruption of an energy transition, while delivering climate-aligned outcomes.
Participation and support of marginalised communities are both crucial to ensuring social protection mandates are met.
To address this, Indonesia’s JETP recognises opportunities to create quality green jobs with a specific emphasis on women, youth and vulnerable groups.
Similarly, the JET-IP in Vietnam recognises the participation of women, youth and ethnic minorities in JETP initiatives.
What’s happening in Dubai?
The UAE’s COP28 Presidency is focusing on fast-tracking a just, orderly and equitable energy transition; fixing climate finance; putting nature, lives and livelihoods at the heart of climate action; and hosting an inclusive COP.
The theme of the 6th day of the conference (5 December) focused on just transition, energy and industry, and Indigenous peoples.
The first annual high-level ministerial roundtable on just transition convened 90 representatives to provide direction and recommendations for the work program on just transition that was established at COP27 last year.
Parties highlighted that the work programme should focus on several key areas, including building international cooperation, facilitating national policy acceptance, involving multiple stakeholders, addressing financial and economic aspects, and ensuring inclusivity, equity, and ambitious and effective transitions that leave no one behind.
The roundtable recommended a draft decision on the work program for adoption during COP28.
A notable development on a gender-responsive just transition through the announcement of comes by way of a new COP28 Gender-Responsive Just Transitions & Climate Action Partnership, which is endorsed by over 60 parties, including Australia.
The partnership was announced by UN Climate Change High-Level Champion H.E. Racan Khalifa Al Mubarak on COP28’s Gender Equality day, 4 December.
COP28 proceedings are underscoring the significance of incorporating just transition principles in net zero governance frameworks.
However, principles are only the beginning.
Concrete measures will be required, in order to develop sectoral just transition pathways, integrate just transition principles into investment decision-making, enhance international cooperation to deliver positive social and economic outcomes and uphold the integrity and impact of action.
The question now, is how can we best utilise climate diplomacy, international trade multilateral initiatives to reduce the economic and social disruption likely to occur at both country and regional levels, through a disorderly and unjust transition?
Central to this question, will be the way that JETP investment and policy plans effectively activate regional diversification, support workers to transition to decent jobs, foster dialogue, ensure affordability and address these principles in their supply chains.
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