The world has entered the “beginning of the end” of the fossil fuel era, according to UN leaders, with 200 countries signed up to a move away from fossil fuels and expanding renewables to cut planet-heating emissions.
But how will the world make the far-reaching transformation to a decarbonised economy in a fair and inclusive way without leaving behind fossil fuel workers, vulnerable communities, and low-income countries? The question of a “just transition,” as this is known, underpinned the last two weeks of low-key climate talks in Bonn, Germany, where negotiators tackled the thorny issue of who pays for the escalating costs of climate change ahead of the next major COP summit in November.
“It’s all about achieving social equity through climate action,” Adriana Chavarría Flores of the London-based NGO Climate Strategies, an observer at the talks, said. “So not forgetting about the social component and really putting it at the core of the decisions that are being taken within the climate space.”
What is a just transition all about and why is it important?
A just transition means ensuring the benefits of a green economy are shared widely. It also means supporting countries, regions, industries, communities, and workers—particularly low-income ones—that could lose out as the world decarbonises.
The Bonn climate talks, which brought together thousands of negotiators and civil society members from June 3 to 13 to lay the groundwork for COP29, kicked off with the first ever dialogue on how a just transition could look in practice.
“It is one thing to say we must leave no one behind,” said Simon Stiell, Executive Secretary of UN Climate Change in a statement. “But to actually deliver on that, we need to start making concrete plans. We need to be designing policies based on dialogue and engagement with all parts of society.”
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Participants, including civil society and government representatives, said countries should be incorporating elements of a just transition into their Nationally Determined Contributions (NDCs), for instance. These country-specific action plans to reduce emissions and adapt to climate change are up for revision in 2025. At the moment 38 per cent of NDCs mention a just transition. Some plans are detailed, others pay the idea lip service. But coming up with a detailed game plan is vital to help bring communities along as countries and industries wean off fossil fuels, observers said.
“The question is not whether we can have a just or unjust transition. That should not be up to debate,” said Jodi-Ann Wang of the Grantham Research Institute at the London School of Economics (LSE). “It’s how you build it into your planning process.” Countries like Chile are already laying the groundwork for their just transition. The Chilean government, for example, consulted residents, businesses, and trade unions in regions where power plants will be shut down. It recently finished an action plan for Tocopilla in the north of the country, which includes measures to expand electric mobility in the city—and to train people to work in this area.
Reskilling workers for the green economy as part of a just transition
One part of a just transition is “providing, education and training, reskilling, upskilling to make sure that marginalised groups—and everyone really—stay resilient” as economies and societies change, Wang said. “Sometimes that also means reforming the education system itself and tackling existing social and digital infrastructure gaps that already make access different for different groups,” added the sustainable financing policy analyst.
Right now, only a minority of the workforce has the requisite “green skills”. A report by business networking platform LinkedIn found 12.5 per cent of employees around the world using its platform have at least one such skill. For women, the share is 10 per cent. Green skills include repairing electric vehicles, providing climate education, or low-carbon farming methods.
The share of people with green skills is growing and demand for them is increasing rapidly. More than half of employment growth in the energy sector in 2022 was in industries like renewables, according to the International Energy Agency.
But to make the right decisions to support people in a just transition, policymakers need to consult with communities and collect data. That is especially important in places, such as Colombia, Bangladesh, or Uganda, where official data is limited because many work off the books. “If we don’t know who is going to be affected, what the scale is, what the cost of alternative solutions is or what alternative solutions even are, then how are we going to create policies?” she asked.
Stumping up the cash for a just transition
Climate financing, including to pay for climate harms, has long been a contentious issue, including at the 2024 Bonn talks. Negotiators are at odds over the size of the climate funding pot to help developing states fight climate change, and how to split it. The issue is set to dominate the COP29 talks in Azerbaijan.
The new target would replace the $100 billion a year high-income countries pledged in 2022—two years after the agreed deadline. Models indicate the new finance goal to be decided at COP29 in November should be in the trillions.
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For many low-income countries, transitioning to renewables in an equitable and just manner is not feasible without foreign funding. Financing can come in the form of grants or low-interest loans. But in some cases, wealthy nations actually make money by loaning climate cash at market-rate interest, a Reuters analysis found.
“A lot of developing countries today are spending more on servicing their existing debt than providing essential services like healthcare and education to its people,” said LSE’s Jodi-Ann Wang. “It really calls into question whether loans or financing offered at a market rate of return is the type of finance that can fall under just transition-related financing.” Wang hopes that, as the financing issue takes the spotlight at the summit in Azerbaijan, mention of a “just transition” will make it into at least some of those negotiations.
