COP28: The irresistible rise of the just transition

Nick Robins reviews outcomes from the latest UN climate summit and explores how the just transition emerged as key to achieving net zero and climate resilience.  

Historic but inadequate sums up the results of the COP28 climate summit hosted in the United Arab Emirates (UAE). The UAE Consensus that was finally agreed by governments certainly contains a number of important climate firsts: the first endowment of the new Loss and Damage Fund, the first ever goal for renewables and energy efficiency, the first mention of transitioning away from fossil fuels and the first just transition work programme, cutting across all climate activities. These are neither sufficient to keep the goal of holding global warming to 1.5°C alive or to protect those increasingly harmed by climate impacts, notably in the Global South. But what these milestones do signal is where governments and citizens, business and finance now need to focus their efforts to go beyond the consensus and deliver the leadership that the climate crisis demands: leadership that has justice at its heart.

Harnessing the ‘transformational twins’

Central to making headway on these priorities are the transformational twins of climate action: climate justice and the just transition. Climate justice means overcoming what Adam Tooze has called the ‘triple inequality’ at the heart of the climate crisis: it is predominantly high-income groups and nations that have caused the problem, while those harmed by climate impacts are mostly low-income groups and developing countries, and the resources needed to turn the tide are unevenly distributed.

The just transition is then the strategy to make sure that vital climate action is delivered with full respect for labour and human rights so that existing inequalities are not widened (‘leaving no one behind’). It is also the strategy to maximise the socioeconomic gains from climate action, particularly for those often excluded in today’s global economy, notably those in developing countries, women and young people (‘bringing everyone along’). Both climate justice and the just transition are clearly powerful ethical imperatives. But they are also essential for mobilising the breadth of commitment needed for lasting change.

Climate justice was the driving force behind the establishment of the Loss and Damage Fund at COP27 which was followed by the announcement of $790 million in start-up capital on the first day of COP28. Avinash Persaud, climate envoy for Barbados’s Prime Minister Mia Mottley, described the Fund as an essential tool for ensuring that vulnerable countries do not sink “under an ocean of debt” as intensifying climate impacts undermine economic prospects in the Global South. But this is only a start as the Fund needs to grow rapidly to reach at least $100 billion per year. This requires tapping new fiscal resources such as taxes on oil and gas revenues, aviation, shipping and financial transactions, and potentially repatriating revenues from the EU’s Carbon Border Adjustment Mechanism back to developing countries.

The just transition was also prominent in the energy package that formed the core of the UAE Consensus. Ultimately, governments could only agree on the need for “transitioning away from fossil fuels in energy systems”, doing this “in a just, orderly and equitable manner” and getting going by “accelerating action in this critical decade, so as to achieve net zero by 2050”.

Surprisingly, never before has action on fossil fuels been explicitly included in a COP decision: COP26 in Glasgow only achieved agreement on the ‘phase down’ of coal. At COP28, opposition from major fossil fuel producer states ultimately blocked the necessary unanimity on ending coal, oil and gas; the absence of funding on the table from industrialised countries to enable this to happen in developing countries also limited ambition. Yet it is important to recognise that policy support for phase out still reached a new high, with at least 127 countries calling for or endorsing a decision to end fossil fuels at COP28. For Simon Stiell, the UNFCCC’s Executive Secretary, COP28 marked the “beginning of the end” of the fossil fuel era.

One of the key determinants of how quickly fossil fuels are replaced will be whether the just transition moves from being a slogan to becoming the lived experience for workers and communities dependent on coal, oil and gas. According to the International Energy Agency, use of all three fuels will peak this decade, bringing the prospect of disorderly transitions, with facilities being closed without provision made for those impacted or plans for renewal. The recent announcement of the closure of the Grangemouth oil refinery in the UK without a just transition plan is a sign of a future that has to be avoided. Another determinant of transition velocity will be the success with which countries implement the new COP28 commitments to triple renewables and double energy efficiency by 2030.

Closing the financing gap in developing countries with significant injections of public and private capital from the Global North will be essential to achieve the exponential growth that is required to meet these goals – another dimension of climate justice. And the just transition is equally relevant for these growth sectors in terms of labour standards, skills and social dialogue for the world’s growing net zero energy workforce, as is full respect for human rights and benefit-sharing for communities involved across energy supply, housing, industry, minerals and transport. As the representative of Colombia stated in the closing session of the COP: “we have to be clear that the energy transition cannot be at the cost of Indigenous peoples, local communities, and biodiversity”.

Fast forwarding with the new Just Transition Work Programme  

High-level commitments at a COP summit are one thing. Turning them into action on the ground means mobilising hearts, minds and money at the local, national and sectoral levels. Spain’s ecological transition minister, Teresa Ribera, made it crystal clear at the first ever ministerial meeting on the just transition that “the transition won’t happen unless it’s fair”. From a one-line mention in the original 2015 Paris Agreement, the just transition went viral at COP28 with the acceptance that delivering the scale of climate action needed by 2030 and then by 2050 requires a new social contract within and between countries.

This momentum has been building for a while. The International Labour Organization’s 2015 just transition guidelines were reaffirmed by all countries in June this year and over 30% of national climate plans for 2030 (Nationally Determined Contributions or NDCs) now incorporate the social dimension through dedicated just transition funds, as well as laws and strategies for protecting workers, job creation and skills development. But these efforts remain in the minority and in most cases are still relatively new.

The task is now to mainstream social justice throughout climate decision-making. Here, COP28 could make a difference by agreeing the UNFCCC’s first-ever Just Transition Work Programme (JTWP). Its priorities include:

• Just transition pathways: Understanding of net zero pathways has grown but we do not have similar forward-looking assessments or strategies for the socioeconomic, workforce and other dimensions, resulting in a lack of a shared direction of travel. Developing and sharing these is where is the JTWP could have real value, helping to sequence action to avoid disruption, identify barriers and seize opportunities.
• Adaptation and resilience: The just transition is equally as relevant for achieving resilience to increasing climate shocks as it is for mitigation, not least in terms of providing social protection for workers and communities impacted by both extreme and slow-onset events.
• Workforce transitions: The work programme emphasises the importance of “decent work and quality jobs in accordance with nationally defined development priorities, including through social dialogue, social protection and the recognition of labour rights.” The inclusion of labour rights was another first for COP28.
• Inclusion and participation: Inclusive and participatory approaches are identified by the programme as a key element and promoting effective models could prove transformational. Meaningful participation is needed by key stakeholders such as workers, local communities and Indigenous Peoples, micro-, small and medium-sized enterprises (MSMEs), consumers and across all of these, women and young people.
• International cooperation: The JTWP points to international cooperation as an enabler of further action, highlighting the opportunities, challenges and barriers relating to sustainable development and poverty eradication from global transitions. There are already four Just Energy Transition Partnerships (JETPs), in South Africa, Indonesia, Vietnam and Senegal, with mixed results so far. As the pace of transition intensifies, further cooperation on trade and investment will be needed. 

Finding the finance for just transitions

Mobilising finance for just transitions was the biggest gap left unaddressed by COP28. South Africa’s Environment Minister Barbara Creecy was emphatic at the summit that the “current global financial system is not designed to respond appropriately” to developing country needs. Developed countries have failed to meet the longstanding goal of delivering $100 billion per year in climate finance, originally set for 2020, with only $89.6 billion provided in 2021. The latest projections suggest that the goal may have been met in 2022. But this is like a student handing in an assignment three years late and expecting praise. Furthermore, the $100 billion commitment simply does not reflect the scale of developing country needs.

A new assessment published at COP from the Independent High-Level Expert Group on Climate Finance forecasts that emerging markets and developing countries will need to mobilise $2.4 trillion a year by 2030 for climate and nature spending (including $85 billion a year for dedicated just transition activities in terms of workers and communities). Of this, $1 trillion is needed annually by 2030 in external finance from public and private sources, many multiples of current flows, including a five-fold increase in concessional public investment (including from the multilateral development banks).

In essence, COP28 postponed serious discussion of financing until 2024. The first milestone will be the Spring Meetings of the IMF and World Bank in April, culminating at COP29 during November in Baku, which is scheduled to finalise the New Collective Quantified Goal (NCQG) for finance. As part of this, the next generation of JETPs will be needed, with credible financing to deepen action on both phasing down coal and scaling up renewables as well as supporting developing countries to boost energy efficiency and kick-start the transition away from oil and gas. Developed countries will also need their own comprehensive financing plans to make the just transition come to life across every sector and region.

Beyond the negotiations

COP28 also showed how the just transition is taking shape in the real world. New business and trade union pacts are being negotiated and launched, such as the Just Transition for Transport pledge between 3.5 million road transport operators and 18.5 million transport workers. The General Secretary of the International Transport Workers (ITF) union, Stephen Cotton, described the pledge as representing “our joint recognition that a just transition in the road transport sector requires that workers and their unions [are] at the centre of decision making” and that “all supply chain actors take responsibility for labour standards and emissions reductions”.

The financial sector also came to COP28 with new mechanisms to support the just transition, including guidance for banks and insurance firms, frameworks for the managed phase out of coal that include just transition principles, and initiatives for mobilising global bond markets for climate action that incorporates social justice. The Grantham Research Institute and Climate Bonds Initiative have set out the potential for the global green, social, sustainable and sustainability-linked (GSSS+) market to channel capital for the just transition. And the summit also showed how taking just transition seriously will require an intergenerational approach, not least in terms of responding to the needs and concerns of the world’s young people, who are too often excluded from jobs, decision-making and finance.

All in all, COP28 achieved some vitally important but fundamentally partial victories in terms of loss and damage, the energy system and just transition. Profound gaps remain in terms of policy commitment and implementation, business planning and financial system reform, dealing with nature and deforestation, and ensuring that the irresistible rise of the just transition has integrity in terms the active involvement of people in the decisions that affect them.

The author would like to thank Jodi-Ann Wang and Brendan Curran for input into this commentary. The views in this commentary are those of the author and do not necessarily represent those of the Grantham Research Institute.

The next deadline for submissions into the Just Transition Work Programme is 15 February 2024 and the first global dialogue will be held in June.