Financing people-centred climate action: a Just Transition Bond for the Northern Ireland Housing Executive
Northern Ireland will need additional investment of £1.3 billion a year by 2030 to reach net zero by 2050, according to the Climate Change Committee’s most recent estimates. A significant portion of this investment will need to be raised from private investors.
There is growing demand for financing that both contributes to climate action and delivers social objectives – the ‘just transition’. This paper highlights how an innovative public-private programme that focuses on Northern Ireland’s housing stock can help to fund an equitable low-carbon economy, through the use of a ‘Just Transition Bond’. This would be similar to a Green, Social and Sustainability (GSS) use-of-proceeds bond but the proceeds would be specifically aligned to just transition outcomes. The paper sets out how the bond could be structured and how it could catalyse momentum for just transition finance in Northern Ireland.
- If Northern Ireland does not deliver a just and equitable transition to a net zero economy it could see a number of negative social impacts, including significant job losses in carbon-intensive industries, growing fuel poverty and an increasingly unaffordable housing stock that doesn’t meet energy standards.
- The authors propose a Just Transition Bond as part of the Northern Ireland Housing Executive’s investment programme to revitalise communities. This would include large-scale retrofitting to deliver energy efficient homes with decarbonised heating, supporting green growth and improving residents’ health and wellbeing.
- Within the context of the cost-of-living crisis, measures that can enable households to reduce their spending on heating could make a significant and positive impact to help financially squeezed and low-income households to cope with the pressures.
- The Just Transition Bond would build on a growing number of examples of housing associations in the UK that are raising debt funding through ‘social’ or ‘sustainable’ bonds, follow the policy direction set by the Northern Ireland Executive and the UK’s net zero commitments and set a global example against which delivering a just and inclusive transition to net zero could be benchmarked.