Initiating engagement on just transition policy: a blueprint
Ahead of the first ever high-level ministerial roundtable on just transition, to be held at COP28, Antonina Scheer, Tiffanie Chan and Setenay Hizliok outline a blueprint to drive discussions with national policymakers on priority areas for connecting climate ambition with social justice, building on the foundations of established human and labour rights.
How to ramp up climate action while ensuring that the low-carbon transition delivers for all is a significant challenge and one that countries are set to address at the upcoming UN climate conference COP28. A decision is due there on implementing the Work Programme on Just Transition announced at COP27. This comes eight years after the concept of just transition was included in the Paris Agreement and on the back of increasing action by policymakers, trade unions, business, finance and civil society. The launch of the Work Programme is a moment to consolidate existing experience and there is appetite for guidance around which engagement and action can be developed.
The just transition requires minimising negative impacts from climate policies and maximising positive social impacts for workers, communities and other stakeholders. Ensuring that the just transition is firmly part of the net zero agenda can determine whether social pressure from affected communities is an enabler or a barrier to the transition. Policies that address distributional impacts minimise the risk of political backlash and carry a message of economic opportunity. Well-designed policies can help avoid conflict and mitigate the risk of just transition litigation. But what exactly would it mean for a country to implement a just transition domestically?
Challenges in developing just transition guidance
A few months before the Paris Agreement was signed in 2015, the International Labour Organization (ILO) set “a globally endorsed framework” for governments and social partners to utilise to manage the social impacts of the low-carbon transition. Countries can also draw on a burgeoning field of initiatives and platforms to guide and fund just transition policy. For example, the Just Energy Transition Partnerships (JETPs) offer an initial, albeit imperfect, financing model, while the Powering Post Coal Alliance (PPCA) and the Climate Investment Funds (CIF) enable knowledge-sharing and guidance for just transition planning. A recent report by the Grantham Research Institute and several partners advises governments on the different phases of policymaking for a just transition.
These are useful initiatives and have already played a role in progress on the just transition in various locations. But it is challenging to create universally applicable guidance on the just transition, given that its dimensions are deeply place-based and the term itself has a variety of definitions and synonyms used in different local contexts. Not every country will transition in the same way or timeframe. Nor is there the same onus on every country, as described by the principle of ‘common but differentiated responsibilities’, which contends that historically high-emitting developed countries have a greater mitigation role to play globally.
A national blueprint for just transition policy
In reflection of the challenges described, we have developed a blueprint of questions to guide governments to develop a set of priorities as a starting point, which can also be used to measure progress. For example, the questions may be useful to integrate into JETP dialogues, or similar platforms, to help develop policies tailored to specific country contexts.
The blueprint can also act as a cornerstone for different stakeholders advocating a just transition. Where countries cannot yet say ‘yes’ to certain questions in the blueprint, civil society, investors and politically-active stakeholders can focus on these questions to spark progress by engaging governments to better address just transition in national policymaking. It can be used in tandem with the wider resources mentioned above to set the direction and hammer out the details of just transition policy.
|Part I: Foundation of social protection|
– Has the country ratified the ILO Fundamental and Governance Conventions?
– Does the country have in place social protection policies?
– Does the country have adequately resourced agencies to ensure implementation, oversight and enforcement of social protection policies?
– Is there equal access to justice to seek redress, through courts, tribunals or alternative forms of dispute resolution?
– Has the country ratified the Core International Human Rights Instruments?
– Does the country have policies to protect human rights in line with the UN Guiding Principles on Business and Human Rights?
– Has the country ratified the Indigenous and Tribal Peoples Convention?
– Does the country support the United Nations Declaration on the Rights of Indigenous Peoples and has the country incorporated it into domestic law?
– Does the country recognise the right to a clean, healthy and sustainable environment (either through international agreements, national constitutions, laws or policies)?
|Part II: Just transition governance|
– Does the country’s Nationally Determined Contribution (NDC) or framework climate legislation acknowledge the just transition?
– Does the country have a national just transition strategy?
– Does the country’s governance of climate issues include social dialogue with workers, citizens and communities affected by decarbonisation?
– Does the country specify the categories of stakeholders consulted (e.g. workers, Indigenous Peoples, rural communities, civil society) and how it identifies them?
– Does the country demonstrate and report on progress relating to ongoing social dialogue and meaningful engagement?
– Does the country have a national Just Transition Commission that is supported and adequately resourced by public financing mechanisms?
– Are collaborations between ministries on the just transition promoted at national, regional and local levels?
|Part III: Just transition lens on climate policy|
|Just fiscal policy|
– Does the country’s carbon pricing system or fossil fuel subsidy reform assess potential regressive effects while ensuring appropriate coverage and ambition?
– Does the country have a plan to address identified regressive effects and report on the outcomes on affordability?
|Just transition out of emissions-intensive economies|
– Does the country develop, fund and implement support programmes for workers affected by the phase-out of emissions-intensive activities?
– Does the country develop, fund and implement regional revitalisation programmes for affected communities?
– Does the country’s land use commitments incorporate just transition principles, at a minimum respecting free, prior and informed consent (FPIC) of Indigenous peoples?
|Just transition into low-emissions economies|
– Are the country’s targets for low-carbon energy complemented by a commitment to ensure affordable energy access for all citizens?
– Does the country develop and fund green skills development programmes?
– Does the country actively coordinate or contribute to the growth of green jobs?
– Has the country issued a just transition bond or a green or sustainability bond with key social provisions?
The blueprint in action
According to the UNFCCC, just transition principles now appear in 38% of NDCs and 56% of long-term strategies. Many countries are starting to implement many of the just transition measures referenced above.
Examples include Spain with its Law 7/2021 on Climate Change and Energy Transition, which requires the government to approve a just transition strategy every five years; the Philippines’ Green Jobs Act, which includes social dialogue in its definition of green jobs and coordinates efforts across the government departments focused on labour and environment; South Korea’s Carbon Neutral Green Growth Framework Act, which requires the government to conduct a regular survey on the impacts of the low-carbon transition on employment and to prepare retraining measures; and Chile’s Just Transition Strategy, which sets out how to create new clean energy jobs and reskill workers affected by the closure of coal-fired power stations.
There are also supranational (and subnational) just transition policies, including the EU’s Just Transition Fund, which supports affected regions through territorial just energy transition plans.
The crucial need for ongoing country-specific discussions
Delivering a just transition requires proactive planning from all lines of government along with significant financing. Alongside civil society groups, international investors, in particular sovereign bond holders, can play a role as advocates for climate action through collaborative sovereign engagement.
To support such engagement, investors and countries need more than a blueprint: assessable indicators evaluated by an independent third-party are required as the basis of accountability. While corporate just transition indicators have been developed for banks and high-emitting companies (e.g. Climate Action 100+, World Benchmarking Alliance), indicators universally applicable to countries are not yet available.
Drawing on the broad blueprint of just transition questions above, priority indicators have been developed for the Assessing Sovereign Climate-Related Opportunities and Risks (ASCOR) framework. These indicators evaluate how countries address social risks and realise social opportunities associated with the energy transition and may form a fruitful basis for consistent investor engagement on the just transition. The first ASCOR results, which include assessments of just transition indicators for 25 countries, will be published in December 2023.
Action to develop effective, fair and operational just transition policies is needed to accelerate progress towards a resilient net zero economy. But as the JETPs have already signalled and COP28 will underscore, deepening international cooperation in terms of finance, trade and standards will be crucial.
The authors would like to thank Catherine Higham, Nick Robins and Jodi-Ann Wang for their helpful reviews of this commentary. The commentary draws on research conducted by Antonina Scheer and Setenay Hizliok for Assessing Sovereign Climate-Related Opportunities and Risks (ASCOR), an investor-led project. ASCOR’s academic partner is the Transition Pathway Initiative Centre (TPI Centre), which is based at the Grantham Research Institute on Climate Change and the Environment.