“When it comes to climate action, inaction is not an option – be it from an environmental standpoint or an economic and social one”, World Economic Forum, June 2022
Just Transition has come of age as a key element of the global response to climate change. For the first time, it was central to discussions at the Sharm-El Sheik COP 27, having been only a sidenote in the 2015 COP 21 Paris Agreement.
The focus on Just Transition at COP 27 built on earlier announcements. A year earlier, at COP 26 in Glasgow, the governments of South Africa, France, Germany, the United Kingdom, the United States of America, and the European Union launched The Just Energy Transition Partnership (JETP). In Egypt, a Just Transition Pavilion, hosted by the EU and the International Labour Organisation (ILO) also provided COP attendees with a dedicated space for taking stock of Just Transition, and sought to deepen ownership of the approach. But why has the concept of Just Transition become increasingly central to the global response to climate change?
A Just Transition seeks to shift to a global use of low carbon energy systems, while at the same time working to address climate injustices. It focuses on ensuring decent work and social inclusion during the necessary changes needed for the planet. Despite concerns that phasing out fossil fuels will see many jobs lost and workers retrenched, the ILO reports that measures related to renewable energy and energy efficiency are projected to deliver a net positive impact of 18 million jobs globally by 2030. The question is how to achieve that benefit; Just Transition looks to create new value chains, transfer skills, maintain or enhance social protection (or compensation), and drive inclusive stakeholder participation and dialogue.
To date, most of our formal learning on Just Transition has come from the global north, including transitioning from heavy manufacturing in northern England and from coal mining in former East Germany. It will, of course, be a global process, and there is no doubt that achieving a Just Transition will look different in developing economies, raising different challenges, questions and opportunities.
The Just Energy Transition Partnership (JETP), announced at COP 26, is a promising start for increasing support for nationally owned and led Just Transition plans. JETP’s model aims to fast-track energy transition by encouraging countries to strike deals with each other to ensure various funding options are available to accelerate coal phase out and reduce emissions in selected developing countries. While the balance of funding will likely come from concessional loans, there will be some access to grant funding. A partnership with South Africa is the first to get underway, while Indonesia announced its intent to establish JETP during COP 27, financed by the governments of Japan, Canada, Denmark, Italy and Norway, as well as the UK, US, Germany, France and the EU. Discussions are ongoing with Vietnam and Senegal, while India has opposed JETP on the grounds that it doesn’t want to single out coal as a source. India is, however, working on a Long-Term Strategy for transition that could present other entry points for international support.
South Africa’s JETP will seek to decarbonise the economy, preventing up to 1-1.5 gigatonnes of emissions over the next 20 years. It will have a strong focus on supporting a transition away from coal-based power (which currently accounts for about 85% of the country’s electricity) and building a low emission, climate resilient society. An initial $8.5 billion is being mobilised to support the first phase of the partnership, which will include grant funding, concessional loans and investments, risk sharing instruments and mobilisation of the private sector. JETP will be driven by South Africa’s Just Energy Transition (JET) Investment Plan 2023-2027, launched by President Cyril Ramaphosa at COP 27, which provides a mechanism for donors to support a country led plan. As well as covering electricity, the JET also includes electric vehicles and green hydrogen.
JETP implementation in South Africa, Indonesia and elsewhere is an exciting prospect and should be seen as a key point of light and hope for inclusive, low carbon growth. It will, however, lead to several important questions, such as will the money be enough? Will the dominance of concessional loans, over grant funding, deter other developing countries from signing up to JETP? How will participation and dialogue be ensured and sustained across all levels of government and society, throughout the transition period? And what more must be done in order to tackle the climate crisis in a way that includes, appreciates and benefits all members of society?
As we look ahead in 2023, we look forward to exploring, consolidating and synthesising learnings from JETP implementation, and other mechanisms of Just Transitions, to enable our global community of researchers, implementers and stakeholders to ensure that support for transitions to low carbon systems remain responsive, flexible and adaptive. It may only be through a Just Transition, at a speed and scale required to ensure a positive future for our planet, that we can ensure the changes required are enacted by, and for, the benefit of all.