Case Study – Just Transition Initiative

What is "Just Transition"?

Report/Case Study; Guidelines, Strategies and Recommendations

Jul 2021

From the grand to the granular: translating just transition ambitions into investor action

The report describes the current state of the just transition discourse amongst businesses and highlights, with the help of case studies, a just transition “Expectations framework” that can be used by businesses and investors to help with investment assessments and due diligence, shareholder engagement, as well as capital allocation decisions.

Geographic Scope
Sectors: General
Focus Areas: Government intervention > Other, Regulation; Investment > ESG and corporate engagement, Other, Private finance
Keywords: supply chain; CSR; co-creation; reporting; Task Force on Climate-related Financial Disclosures (TCFD); investors; private sector; OECD’s Guidelines for Multinational Enterprises; EU taxonomy; benchmarks; Climate Action 100+ (CA100+)
By: Nick Robins, Sabrina Muller, Katarzyna Szwarc
Publishing Organization: Grantham Research Institute on Climate Change and the Environment, Centre for Climate Change Economics and Policy, London School of Economics and Political Science
Academic/research institution or journal
Summary: The report describes the current state of the just transition discourse amongst businesses and proposes a path forward for businesses and investors to integrate just transition considerations into business decisions. The authors identify the just transition as a critical enabling factor in reaching net zero, noting how governments are increasingly recognizing that climate policies that do not take into account the effects on employment, communities, and consumers run the risk of failure. According to the authors, as the strategic case for just transitions has deepened, leading companies in the energy system have begun to formalize their responses as part of wider climate change strategies., Investors can also play a significant role by making sure that the social dimension is fully integrated into their assessment, stewardship, capital allocation, and policy activities.

The report presents a seven-point framework that combines the governance dimension for businesses (in terms of strategy, policy dialogue, and transparency) with a stakeholder component (including workers, communities, supply chains, and consumers). The intention is for this framework to be used in investment assessments and due diligence, shareholder engagement and stewardship, as well as the capital allocation decisions for portfolio companies. The framework is applied to analyze the work accomplished to date by five European international power utility firms.

The report identifies key lessons, including that businesses acknowledge some of the core foundations of just transitions, though the strategic approach is still emerging, with and that transparency and disclosure on just transitions is still lagging. It also points out how it is likely that investors will increasingly expect an active interest from companies to promote just transitions through public policy advocacy. Furthermore, supply chain realities loom large, in terms of generating quality green jobs for local people and also making sure that sustainability and human rights due diligence are intensified in international sourcing from developing countries. The authors highlight the need for community engagement to move from traditional corporate social responsibility activities to a more transformational model that is built upon co-creation. The report concludes with some critical next steps needed, including: promoting convergence around common approaches; modeling to help identify priority areas for investors; understanding better the role of participation and investor dialogues in just transition plans; along with clarifying the investor role in just transitions in emerging and developing economies.

Report/Case Study; Guidelines, Strategies and Recommendations

Dec 2018

Climate change and the just transition: A guide for investor action

This report applies a just transition lens to investor approaches, using illustrative examples to propose a framework that helps investors to place just transition principles at the center of their climate strategies.

Geographic Scope
Sectors: General
Focus Areas: Government intervention > Other, Regulation; Investment > ESG and corporate engagement, Other, Private finance
Keywords: investors; framework; fiduciary responsibility; financial risk management; private sector; capital allocation; Principles for Responsible Investment (PRI); Task Force on Climate-related Financial Disclosures (TCFD)
By: Nick Robins, Vonda Brunsting, David Wood
Publishing Organization: Grantham Research Institute on Climate Change and the Environment
Academic/research institution or journal
Summary: This report contends that investing in a just transition is set to be the best way to manage the strategic risks and opportunities flowing from the shift to a prosperous, low-carbon, resilient, and inclusive global economy. It highlights the influential role played by investors as the fiduciaries of assets and allocators of capital. The report also suggests how strategies for tackling the growing threat of climate change need to incorporate the full range of environmental, social, and governance (ESG) dimensions of responsible investment. This guide draws from an international review of investor approaches and dialogues with investors to provide a framework that can be applied both by individual institutions and through collaborative initiatives to help investors place just transition principles at the center of their climate strategies.

The article, using several examples of investor actions from around the world, highlights some strategic motivations for investors to pursue this work, including: broadening the understanding of systemic risks from climate change; updating the fiduciary responsibility to capture interrelated environmental and social drivers of long-term performance; recognizing the material drivers of long-term value; and identifying new growth opportunities in areas that combine climate and social goals. Based on these motivations, the article suggests five core areas of action for investors, including investment strategy, corporate engagement, capital allocation, and policy advocacy. The article also provides initial questions for investor engagements with companies on the just transition and highlights the need to build in a process to learn from the emerging experience and the lessons of practice, in terms of corporate engagement, capital allocation, and policy advocacy.

Report/Case Study; Guidelines, Strategies and Recommendations

Jun 2021

Assessing vulnerability from coal dependence and need for a just transition

This paper identifies the linkages that surround the Indian coal economy as well as the possible economic, societal, and cultural repercussions of a coal phaseout in the major coal mining states.

Geographic Scope
Sectors: Mining
Focus Areas: Employment > Job creation and/or equality; Environment and/or pollution > Nature; Government intervention > Public finance, Regulation; Inequality and/or poverty > Gender inequality; Investment > ESG and corporate engagement; Social and/or cultural impacts > Non-financial loss, Other
Keywords: Coal communities; tribal women; health insurance; income inequality; informal sector; CSR revenue; state revenue; community identity; livelihood alternatives; social capital of land; illegal mining; legislative gaps; energy democracy
By: Souvik Bhattacharjya, Ruchi Gupta, G. Mini, Saswata Chaudhury, Mani Juneja, Kartikey Sharma
Publishing Organization: The Energy and Resources Institure (TERI)
Academic/research institution or journal
Summary: This paper—the first of a two-part release from The Energy and Resources Institute (TERI)—lays out the socioeconomic and environmental contexts of the coal economy in India. The authors highlight the detrimental impacts that the phaseout is likely to have on: the livelihoods and social surplus across coal-dependent states; the coal royalties that make up a significant portion of the no-tax revenue for a state; the stoppage of social empowerment initiatives and infrastructural losses; along with the unintended losses of the financial and social structures functioning within the gray market of the coal mining industry.

The authors also draw out the disproportionate impact on women and the vulnerable within these communities expected from the phaseout. The authors contend that in a mixed economy like India, a just transition takes utmost precedence, because it not only aims to formalize the deeply informal coal sector, but also seeks to achieve the critical characteristics needed to fulfill the notion of an “energy democracy”. The paper also discusses how the existing regulatory framework cannot comprehensively handle the complex interlinkages that exist within the subsector of the informal mining segment, part of which is both licensed and illegal and part of which is artisanal in nature.

Academic paper/Case Study; Definitions and Concepts

Dec 2019

Becoming fundable? Converting climate justice claims into climate finance in Mesoamerica’s forests

The article assesses the efforts of the indigenous and forest people’s groups in Mexico and Central America to promote claims to climate finance in terms of the different concepts of justice and identifies constraints to more transformative and reparative pathways to just climate outcomes.

Geographic Scope
Sectors: Land-use
Focus Areas: Environment and/or pollution > Nature; Government intervention > Public finance; Inequality and/or poverty > Other; Justice
Keywords: Forest governance; REDD+; indigenous communities; Mesoamerican Alliance of Peoples and Forests,; climate finance; UNFCCC; empirical justice analysis; Free Prior and Informed Consent; full consent; reparative or transitional justice narratives; buen vivir; self-determination
By: Laura Aileen Sauls
Publishing Organization: Climate Change
Academic/research institution or journal
Summary: The article draws upon the experiences of a coalition of 10 Indigenous and forest peoples’ groups in Mexico and Central America—the Mesoamerican Alliance of Peoples and Forests (AMPB)—with regards to their navigation of the discursive strategies suited for accessing climate finance, particularly through the REDD+ instrument. The author uses the history of community positions toward REDD+ to suggest that the claims underpinning their engagement reflect conceptualizations of climate justice, which deviate from those that have dominated policy and popular discussions. The author assesses the feasibility of the AMPB-proposed Mesoamerican Territorial Fund that aims to directly capture climate finance, which would bypass problematic relations with national governments and traditional donors.

The article finds that although Indigenous peoples and local communities have made significant advances in terms of representation, recognition, participation, and concrete funding, the constraints of “becoming fundable” may hinder more transformative and reparative pathways to just climate outcomes. The requirement to “become fundable”, under the terms of the United Nations Framework Convention on Climate Change (UNFCCC) and major donors, is also a demand for the Indigenous peoples and local communities to become legible . This demand presents a clear tension with the member groups’ priorities of self-determination and “buen vivir”—a term that signifies an explicit recognition of the importance of nature for well-being. The author concludes that moving toward distributive justice may be much easier than a more critical interpretation of procedural justice. As such, efforts to support forest climate initiatives in these contested landscapes may benefit from moving away from results and performance-focused discussions toward a view of climate finance as among the means of achieving distributive, procedural, and historical justice on a territorial scale.

Report/Case Study; Policy Tools or Evaluations

Apr 2021

Workers and Communities in Transition: Report of the Just Transition Listening Project

The report synthesizes lessons from more than 100 listening sessions with labor and community groups to gather their perspectives on transitions as well as identifies how coalitions have come together and what pathways exist to a just future.

Geographic Scope
Sectors: Agriculture; Energy; General; Land-use; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans; Employment > Job creation and/or equality, Skills, Social protections; Environment and/or pollution > Human health; Government intervention > Public finance; Justice; Social and/or cultural impacts > Pride or cultural identity
Keywords: Just Transition Listening Project (JTLP); Transitional services; unjust transitions; social protection; employer-based health coverage; labor unions; collective bargaining; labor climate movement; Trade Adjustment Act; wage insurance; Washington Initiative 1631; Free Prior and Informed Consent; systemic racism; holistic transition; formal and informal education; “bargaining for the common good”; intergenerational mentorship; unionization; coalition building; facilitated dialogue; power inequities; Huntley Plant Closure Fund; Diablo Canyon Nuclear Plant; Lordstown Transition Center; Redwood Employee Protection Program 1978; United Steelworkers
By: J. Mijin Cha, Vivian Price, Dimitris Stevis, Todd E. Vachon, Maria Brescia-Weiler
Publishing Organization: Labor Network for Sustainability
Labor organization, Non-profit organization/civil society organization
Summary: The findings of this report are derived from more than 100 in-depth listening sessions, including qualitative interviews and focused discussion groups with workers and community members from across the United States, which were conducted in 2020. The sessions, typically lasting an hour or more, involved workers from dozens of unionized and nonunionized industries; union leaders; members of frontline communities, including environmental justice communities, communities of color, and Indigenous communities; along with leaders from labor, environmental justice, climate justice, and other community organizations.

The aim of the sessions was to capture the voices of the workers and community members who had experienced, are currently experiencing, or anticipate experiencing some form of economic transition. The report suggests how past transitions, driven by market forces, corporate entities, and shortsighted public policies, often leave workers and communities largely behind, with little to no support. As such, community trauma has gone unrecognized and unaddressed for years.

The report identifies several themes that have emerged through these sessions, including a picture of what transition entails; how coalitions have come together, particularly those including labor and environment groups; how common vision and strategies for change are built; and what pathways to a just future exist. The report also highlights how individual and collective understandings of transitions range widely, according to type of work, class, gender, race, age, political ideology, previous experiences with environmentalists or the climate justice movement, and relationships with unions and the community. The report affords insightful reading and covers recommendations for policymakers; labor and movement organizations; and future research to fill in the identified gaps in knowledge, including understanding how sectoral transitions such as automation, digitalization, hybrid working, and health care could be done in an equitable manner.

Academic paper/Case Study; Guidelines, Strategies and Recommendations

Apr 2017

Just Transitions for the Miners: Labor Environmentalism in the Ruhr and Appalachian Coalfields

This report argues that labor environmentalism with a tradition of neo-corporatism is best positioned to support a just transition for affected workers with the help of examples from Ruhr (Germany) and Appalachia (United States).

Geographic Scope
Sectors: Mining
Focus Areas: Employment > Job creation and/or equality, Skills, Social protections; Environment and/or pollution > Human health
Keywords: Environmental reforms; unions; collective action; militancy; neo-corporatism; limited corporatism; Ruhr; Saarland; United Mine Workers of America
By: Judson Abraham
Publishing Organization: New Political Science
Academic/research institution or journal
Summary: This report challenges the idea that corporatism holds back environmental reforms and prevents workers from meaningfully participating in the decisionmaking process of a coal transition. Using two case studies, it highlights how militant unions with a tradition of neo-corporatism are best positioned to demand just transitions for their members. The author draws on existing literature to identify industrial militancy as: radical opposition to managerial prerogatives; deep advocacy for workers’ rights; a belief in industrial democracy and rank and file control over working conditions; along with support for collective action.

The author makes a case for industrial militancy by using the example of the German neo-corporatist approach of Ruhr and Saarland, a set of practices whereby governments, unions, and employers set the industrial policy together. Through this collaborative approach, the unions and workers’ militants achieved success on behalf of the coal miners. The author compares their success to the limited corporatism approach of the Appalachian coal unions and argues that the failure of the United Mine Workers of America (UMWA) to achieve a just transition is due to a lack of democracy within the governing system and the absence of the union members’ militancy. The author suggests that the environmental and social achievement of the German coal unions stems from militant activism. A similar approach could benefit the UMWA in achieving a just transition for its miners and their communities. The author concludes that balancing the concerns of labor with the environment requires some degree of worker control over the industrial policy and disruptive militant activism.

Academic paper/Case Study; Definitions and Concepts; Policy Tools or Evaluations

Mar 2019

Just transition? Strategic framing and the challenges facing coal dependent communities

The author highlights the importance of strategic framing for policies and unpacks how the reframing of the issue, scale, and place of a coal-mine closure to deliver a “just transition” exacerbated the local sense of perceived injustice.

Geographic Scope
Sectors: General; Mining
Focus Areas: Government intervention > Public finance; Social and/or cultural impacts > Pride or cultural identity
Keywords: Latrobe Valley; top-down planning; reframing; strategic place framing; Issue framing; scale framing; carbon pricing; Clean Energy Act (Australia); privatization; identity; power relations
By: Sally A Weller
Publishing Organization: Environment and Planning C: Politics and Space
Academic/research institution or journal
Summary: Using an example from the Latrobe Valley in Australia, the author uses the paper to deconstruct how a series of strategic reframings were applied to a transition in a coal community and how they exacerbated the local sense of perceived injustice. The top-down strategy adopted deployed a series of reframings: defining the issue as ‘transition’, defining the scale of intervention as ‘regional’, and then creating a bespoke region as the arena of policy action. A multilevel governance arrangement, created to plan for the transition, was heralded by the policymakers as building local consensus and empowering local communities to take responsibility for the future. The author argues that, in practice, these moves excluded directly affected local constituencies, exacerbated the pre-existing local sense of injustice, and enabled redistributive funding to be diverted to unaffected adjacent areas.

The author argues that the deliberative ‘transitioning’ approach described in this paper failed because it sought to side-step local fears about the likely impacts of change. It deployed the technologies of governance—reframing, reterritorialization, faux deliberative engagement, and quantitative gymnastics—to make the problem of the industrial valley appear unproblematic. The conclusion stresses that progress on closing high emissions fossil-fuel activities requires a more sympathetic and politically astute understanding of place and the situation of affected communities.

The author also highlights how the strategic scaling of policy problems aims to make it easier for the dominant actors to control the policy process and shape the perceptions of the winners and losers of change. This paper contributes to the understanding of the strategic reframing of issues and scales of governance by highlighting their implications for the territorial arenas of policy action, which this paper calls “strategic place framing”. The paper advances the argument that when strategic place frames conflict with accepted territorial boundaries, they invite opposition and resistance, thereby limiting, to some extent, the potential of strategic issue and scale framing because of the political durability of territorial place frames.

Report/Case Study; Guidelines, Strategies and Recommendations

Jul 2019

The Risk of Fiscal Collapse in Coal-Reliant Communities

This report analyzes the future of coal under various economic scenarios and the bond markets in three coal-dependent counties in the United States (U.S.) and makes recommendations on how these counties can avoid the fiscal collapse that can have an impact on regional economies through the bond market.

Geographic Scope
Sectors: Energy; Industrial; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Infrastructure investment, Other; Employment > Job creation and/or equality, Skills, Social protections; Environment and/or pollution > Human health; Government intervention > Carbon pricing, Regulation
Keywords: Coal-dependent communities; depopulation; municipal bonds; coal revenues
By: Adele C. Morris, Noah Kaufman, Siddhi Doshi
Publishing Organization: Center on Global Energy policy, Brookings Institute
Academic/research institution or journal
Summary: This paper looks into the long-term implications of the federal climate policies on the coal-dependent counties’ economy across the U.S. and discusses what it would mean for future coal production. Additionally, it examines a potential spill out to the national economy through the national bonds market and proposes the measures necessary to both reduce the risks associated with bonds issued by coal jurisdictions and ensure the economic resilience of those counties.

The authors argue that coal mining across the U.S. has declined in the last decade, due in part to new environmental regulations imposed by the federal government. Focusing specifically on three counties (Mercer, Boone, and Campbell), they further analyze the regions’ fiscal exposure to coal and various carbon pricing scenarios, and predict a fall in the counties’ revenues under stringent climate policy scenarios.

Additionally, the authors examine the bonds issued by coal jurisdictions, arguing that municipal bonds are becoming volatile due to “budget pressure” and extreme weather conditions. Moreover, they caution investors against the “vague and incomplete” disclosures of risks associated with coal assets, citing the economic defaults of late 1970 and the early 1980s due to their negligence on risk exposure associated with nuclear power bonds. The authors conclude with recommendations for local economic diversification, urging the federal government to invest more in programs that ensure worker retraining and the provision of other social benefits. They further suggest combining climate policies with investment to ensure the financial health of coal-dependent counties.

Academic paper/Case Study; Guidelines, Strategies and Recommendations

Mar 2020

Electrifying the ‘eighth continent’: exploring the role of climate finance and its impact on energy justice and equality in Madagascar’s planned energy transition

The study looks at Madagascar’s history of energy transition in the context of various financing instruments and actors as well as identifies the potential impacts on social equity.

Geographic Scope
Sectors: Energy
Focus Areas: Economic diversification/restructuring > Infrastructure investment; Government intervention > Public finance; Inequality and/or poverty > Other; Investment > Competitiveness, Private finance
Keywords: rural electrification; private sector; financial innovation; subsidies; electricity prices; stakeholder maps; direction of power; veto player; leapfrogging; stakeholder alliances
By: Tim Cholibois
Publishing Organization: Climate Change
Academic/research institution or journal
Summary: Through an analysis of projected energy finance flows and key financiers’ financing strategies, this paper shows a shift from grant-based climate finance to financial instruments with clear return profiles, such as concessional loans and private capital. It finds that the choice of financial instrument does impact the provision of complementary social services in rural electrification schemes. While grants are associated with higher investments in complementary social services, private financiers are focused on innovation and scale. Electrification projects that are financed purely privately were found to negatively impact social cohesion by increasing the inequality in access to energy.

The authors identify that apart from the financing gap of USD13 billion identified in the national plan as the main roadblock to successful implementation, there exist a whole set of interrelated, mutually reinforcing barriers to successful electrification, such as low institutional capacity, a lack of human capital and technical knowledge, corruption, and a dysfunctional utility. The authors use stakeholder maps and case studies from three rural electrification projects as part of the analysis.

The study concludes that, if only commercially viable energy projects were to be financed going forward, up to 19 million Madagascans might be excluded from future electrification efforts. Thus the paper recommends the need to promote climate finance literacy and the use of multiple electrification pathways. The author provides some examples, such as “grid extensions” through concessional loans, “scalable innovation” using private capital and risk guarantees, or grant-based “social mission” programs. The author suggests that the findings are relevant not only to Madagascar, but to most, if not all, least-developed countries (LDCs) aiming to decarbonize their economies.

Report/Case Study; Guidelines, Strategies and Recommendations

Apr 2021

Europe’s coal regions: Boosting employment, environment, economy through ‘just transition’

The report, aimed at the European Union (EU), national and local policymakers, looks at coal regions in Poland, Greece, and Bulgaria and assesses the consequences of decarbonization for the local labor market; identifies alternative economic activities that could transform the economic structure of the region; as well as defines the tools and support needed to effectively plan and manage the process.

Geographic Scope
Sectors: Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Infrastructure investment; Employment > Job creation and/or equality, Skills, Social protections; Government intervention > Public finance; Investment > Stranded assets
Keywords: EU Just Transition Mechanism; indirect effects; stranded assets; Territorial Just Transition Plans; Partnership Principle; Just Transition fund; alternate employment sectors; lost income
By: Sarah Azau, Katie Treadwell, Marta Anczewska, Robert Krzysztofik, Joanna Mazurkiewicz, Jan Frankowski, Jakub Sokołowski, Michał Hetmański, Damian Iwanowski, Daniel Kiewra, Paweł Czyżak, Dimitris Tsekeris
Publishing Organization: World Wildlife Fund (WWF)
Non-profit organization/civil society organization
Summary: The report takes a detailed look at expected local employment and community-related impacts in Silesia and Eastern Wielkopolska in Poland; Western Macedonia and Megalopolis in Greece; and the Pernik and Bobov Dol regions of southwestern Bulgaria. Furthermore, it also offers recommendations on the biggest Bulgarian coal region, Stara Zagora. The authors report that, as of March 2021, half of Europe’s coal plants had already shut down or set a closure date. The study profiles individual regions and highlights key findings related to employment and wage prospects, lost income from indirect jobs, the types of jobs to which mining workers could transition, and the expected delay before economic benefits from the transition accrue.

It finds that planning, local participation, transparency, and a commitment to ending fossil fuels are crucial aspects for all the regions. These aspects, along with financing, can turn coal communities into sustainably and economically thriving places to live. The report makes recommendations for EU policymakers to consider while approving the Territorial Just Transition Plans that include: the verification of the “Partnership Principle”; the prevention of further investment in fossil-intensive industries; the application of the “polluter pays” principle; the provision of support for all workers affected; and the alignment with other EU funds. The report provides additional recommendations to national and local policymakers to ensure a just transition.