How to ensure a ‘Just transition’ at all levels

As climate change threatens the life and lifestyle of millions across the globe, a rapid cross-sectoral transition away from fossil fuel usage has become urgent in order to mitigate its worst impacts. This poses a grave challenge in terms of overhauling existing physical infrastructure, human capital skill sets, and financial investments. On the other hand, such a transition also presents the opportunity to create a sustainable, equitable and just future for everyone. This is critically important for countries in the global south, which are likely to face disproportionate impacts of climate change and low carbon transition at the same time.

‘Just transition’ framework would ensure that the benefits of low carbon economic transformation are shared equitably, providing support to those who could lose economically – be they regions, countries, states, industries, businesses, communities, workers or consumers. However, just transition cannot be implemented through a one-size-fits-all approach; rather, it requires context-specific participatory processes in consultation with all stakeholders, including governments, employers, workers, civil society, and affected communities.

Any just transition framework needs to incorporate four basic principles – it needs to recognise that certain segments of society might suffer as a result of energy and environmental decisions, and identify such entities (recognition justice); uphold the right to a fair process for various stakeholders to participate equitably in decision-making processes (procedural justice); look into equitable distribution of burdens and benefits of energy and environmental decisions (distribution justice); and lastly, aim to repair the loss faced by individuals, as a part of climate change and linked transition (restorative justice).

Just Transition frameworks would have to change and adapt across geographies and sectors, focusing particularly on power, mobility, and industry, where significant sectoral transformation is underway, and the need for early development of suitable Just Transition frameworks is high.

Given India’s critical importance for the world to meet its climate goals, it is imperative for global institutions to facilitate a just and inclusive transition in the world’s most populous nation and other developing countries. In India, 80 per cent of the country’s 1.4 billion people live in districts with high climate vulnerabilities. CPI conducted studies reveal that states likely to be most impacted by the transition away from fossil fuels, are also amongst the most economically impoverished ones.

For instance, in Jharkhand, the impact of such a transition would be equivalent to ~19 per cent of its GSDP, in the current scenario. The complexity arising from the fact that climate change-affected and transition-affected stakeholders are largely the same, necessitates the development and implementation of a Just Transition framework that does not leave anyone behind. 

Equitable distribution of burden and benefits: The power sector globally, has witnessed a rapid decline in the cost of renewables and energy storage technology, thereby offering an increasingly viable round-the-clock alternative to fossil fuel-based power generation. The eventual transition from fossil fuel-based generation to clean energy-based generation would impact existing jobs, requiring significant reskilling and redeployment of human resources.

It would not only impact the economy of regions heavily dependent on fossil fuel-based activities but also the continuity of other businesses linked to such activities. However, the transition would open up vast new opportunities in the sphere of manufacturing, deployment, operating and recycling of clean energy generation solutions; energy storage systems; and supporting grid infrastructure.

Therefore, the ‘just transition’ framework for the power sector would need to include relevant policy mechanisms, financial resource planning, innovative financing structures, and capacity development frameworks to help equitably distribute the burden and benefits across all stakeholders. 

The mobility sector is witnessing vast transformation across passenger and goods categories. While the shift from fossil fuel to electric has been ongoing in rail transport for some time now, decarbonisation of ground transportation has been increasing with the growth in electric mobility supported by developments in battery technology.

The sectoral transition has been rapidly advancing with increasing digital transformation across the value chain. This shift is likely to require extensive reskilling of the workforce that is currently employed in the internal combustion engine vehicle value chain. It would also involve redistribution of supply chains, with the shift in mineral requirement for new-age vehicles, and recycling of end-of-life materials.

The just transition framework for this sector would need to factor in not only the natural resource availability, but also the equitable access to technology, gender, and inclusion-related implications, as well as the availability of financial and knowledge resources.

The industrial sector faces the highest degree of complexity in its transition, considering the hard-to-abate nature of emissions in key sectors such as steel and cement. This is due to the role of fossil fuels as input feedstock for these industries rather than being the energy source in the production process. Decarbonisation of this sector would require resource efficiency, material circularity, and innovative low-carbon technologies.

While solutions do exist, access to technology and low-cost finance to bridge the cost differential remains a barrier. The just transition framework would need to focus on policy measures and partnerships between countries, institutions and enterprises of the global north and the global south, to make available the technology, skillsets, and finance. To address the impact on workers, communities, and local governments dependent on the extraction of mineral resources, the framework would need to incorporate long-term diversification of climate-positive economic activities in these regions.

There is an urgent need to scale up and accelerate the mainstreaming of Just Transition discussions for the formulation of effective implementation frameworks to evaluate the impacts and outcomes. Such a Just Transition framework would require synchronised global efforts to strengthen partnerships and alliances that can support and enable a ‘just’ transition at all levels. 

Just transition is not only a necessity but also an opportunity to transform our economies and societies for a better tomorrow. 

(Vivek Sen is an Associate Director at Climate Policy Initiative; and Saarthak Khurana is an Energy Transition expert at Climate Policy Initiative)