Policy Tools or Evaluations – Just Transition Initiative

What is "Just Transition"?

Report/Guidelines, Strategies and Recommendations; Policy Tools or Evaluations

Nov 2018

Managing Coal Mine Closure: Achieving a just transition for all

This paper narrates the lessons and key considerations for planning and implementing a coal mine closure program, as derived from a review of global experiences and over two decades of World Bank assistance in coal mine closures to governments, enterprises, workers, and their communities.

Geographic Scope
Sectors: Mining
Focus Areas: Economic diversification/restructuring > Economic development plans; Employment > Job creation and/or equality, Skills, Social protections; Environment and/or pollution > Nature; Government intervention > Public finance, Regulation; Inequality and/or poverty > Gender inequality; Investment > Private finance; Social and/or cultural impacts > Non-financial loss
Keywords: mine mechanization; coal mine community characteristics; narrow economic base; political economy; labor mobility; mobility assistance; financial assurance mechanisms; Canada’s Industrial Adjustment Services; China’s urban Dibao social assistance program; transition funds
By: Michael C.Stanley, John E. Strongman, Rachel Bernice Perks, Helen Ba Thanh Nguyen, Wendy Cunningham, Achim Daniel Schmillen, Michael Stephen Mccormick
Publishing Organization: World Bank Group (WBG)
Development finance institution
Summary: The paper, using a review of global experiences and the World Bank’s decades of assisting governments to close mines, provides recommendations to policymakers on how to plan and implement a coal mine closure and mitigate the impacts on the people, communities, and livelihoods. The article highlights the typical characteristics of coal mining communities, which influence the potential for regional recovery after a closure. Many coal-dependent regions continue to lag behind other regions socially and economically, decades after a mine has been shut down. It further highlights how there are few if any instances of fully satisfactory economic rejuvenation outcomes in mono-industry coal mining towns, thereby emphasizing the acute need for early and careful planning to deal with the impacts of a closure.

The paper identifies nine lessons learned from managing coal mine closures, which are organized under three themes—namely policy and strategy development; people and communities; and land and environmental remediation. The policy and strategy development theme emphasizes that coal mine closures require clear policy direction, large budget outlays, and significant stakeholder consultations. The section on people and communities underlines the importance of a Just Transition for All to meet the needs of workers, families, and the wider community. The land and environmental remediation strategies advance the importance of financial planning for environmental remediation and land reclamation and summarizes a range of possible financial assurance mechanisms available. Some of these mechanisms are mobility assistance, employment services and small business support services, social assistance payments, and various financial assurance mechanisms for mine closures.

Report/Policy Tools or Evaluations

Jun 2021

Towards a Just Transition Finance Roadmap for India: Laying the foundations for practical action

The report identifies priority actions for the financial sector in India to address social risks arising from the economic transition, with the help of a just transition framework that assesses the exposure by sector and region.

Geographic Scope
Sectors: Energy; General; Industrial; Mining; Transportation
Focus Areas: Employment > Job creation and/or equality; Government intervention > Other, Public finance, Regulation; Investment > ESG and corporate engagement, Other, Private finance
Keywords: India Just Transition Finance Roadmap (JTFR) project; urbanization; digitalization; Sustainable Development Goals (SDGs); double materiality; credit rating; green bond regulations; ESG reporting; Central Banks and Supervisors Network for Greening the Financial System (NGFS); freight; cement; green bonds; green loans; Reserve Bank of India; fiscal policy; CSR
By: Suranjali Tandon, Annapurna Mitra, Nick Robins
Publishing Organization: CDC Investment Works
Academic/research institution or journal
Summary: This report, a product of the India Just Transition Finance Roadmap (JTFR) project, identifies some priority actions that financial institutions can take to support climate action that also delivers positive results in terms of livelihoods and sustainable development. It involves a review of existing practices, an assessment of exposure by sector and region, and the identification of some priority actions for the finance sector. The authors describe the just transition agenda as the “connective tissue” that binds climate goals with social outcomes.

The authors highlight how India simultaneously confronts the challenges of multiple economic transitions—urbanization, digitalization, and the shift to zero carbon. They identify the distributional impacts on Indian states in sectors that are expected to be the most impacted, including: coal mining, electricity generation, agriculture, manufacturing and industry, along with transportation. Using the four dimensions of social risk arising from the net zero transition—namely livelihoods, energy access, public finance, and human development, they find that Madhya Pradesh, Jharkhand, Chattisgarh, Uttar Pradesh, Bihar, Odisha, Telangana, and Rajasthan will be the most affected by the zero-carbon transition.

The authors suggest that the framework shows a possible mapping of risks to investments, highlighting the role that financial sector players, regulators, and policymakers need to play in ensuring that a just transition is achieved. Furthermore, they highlight how the framework can be used to provide guidance for investors to understand company operations in vulnerable regions, and whether there are any investment strategies capable of mitigating the risks in these regions. It can also provide guidance for investors seeking to align capital allocations with the just transition framework. From their conversations with investors, the authors identify how the just transition is still at an early stage of development in India and needs definition and how it needs to be placed in a core sustainable developmental context. Furthermore, the conversations also reveal that policy action is a crucial catalyst for a just transition and that shareholder engagement on just transitions is increasing.

Report/Policy Tools or Evaluations

Jan 2021

Toolkit for assessing effective Territorial Just Transition Plans

This paper identifies a set of principles and proposes a tool for assessing whether European Union (EU) member states’ Territorial Just Transition Plans (TJTPs) that are required for them to access the EU Just Transition Fund would be effective for delivering a just transition.

Geographic Scope
Sectors: General
Focus Areas: Economic diversification/restructuring > Economic development plans; Government intervention > Other, Public finance; Investment > Private finance
Keywords: EU Just Transition Fund; Territorial Just Transition Plans (TJTPs); scorecard; assessment tool
Publishing Organization: World Wildlife Fund (WWF)
Non-profit organization/civil society organization
Summary: This paper identifies a set of principles and includes an associated toolkit to assess whether the Territorial Just Transition Plans (TJTPs), developed by member countries of the EU in order to access the EU Just Transition Fund, can enable the delivery of a truly just transition to climate neutrality. Targeted at policymakers, municipalities, civil society, and other partners involved in developing plans, it aims to provide guidance on what a good plan looks like and enable an evaluation of the quality of the plans developed.

The methodology of the tool is based on a series of indicators that allow one to review the performance of the plans against 10 principles. The application of the methodology, which is also available as a webtool, results in a “traffic-light” rating on the plans. WWF intended for the toolkit to be used by the European Commission, national and local policymakers, and any other stakeholders engaged in the development of the plans. WWF has also indicated that published reports are verified and added to their website’s resource page.

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.

Report/Guidelines, Strategies and Recommendations; Policy Tools or Evaluations

Jul 2020

Jobs in a Net-Zero Emissions Future in Latin America and the Caribbean

The report details a decarbonization pathway for Latin America and the Caribbean region, identifies expected labor changes in various sectors, and focuses on equity considerations needed in each of the affected sectors.

Geographic Scope
Sectors: Agriculture; Energy; Industrial; Transportation
Focus Areas: COVID-19; Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans, Infrastructure investment; Employment > Job creation and/or equality, Skills, Social protections; Environment and/or pollution > Human health, Nature; Government intervention > Public finance; Inequality and/or poverty > Gender inequality; Investment > Competitiveness, Stranded assets
Keywords: decarbonization; input-output analysis; manufacturing; animal-based and plant based food systems; energy subsidy reform; social protection systems; Public employment programs; dietary shift; gender
By: Catherine Saget, Adrien Vogt-Schilb, Trang Luu
Publishing Organization: Inter-American Development Bank, International Labor Organization (ILO)
Inter-governmental/international organization, Labor organization
Summary: This report takes a detailed look at decarbonization pathways in the Latin America and the Caribbean region and highlights the potential to create 15 million net jobs in sectors, such as sustainable agriculture, forestry, solar and wind power, manufacturing, and construction during such a transition. The report suggests that, with adequately-designed measures to ensure that these jobs are decent and that those who lose out in the transition are protected and supported, recovery plans can create climate benefits, while also boosting growth, tackling inequality, and making progress towards the Sustainable Development Goals.

This report is based on an input-output analysis using a Global Trade Analysis Project Power database, a commonly employed tool for assessing the direct and indirect environmental and socioeconomic impacts of decarbonization efforts. The study finds that only three sectors would shrink in the transition to a decarbonized economy: 1) fossil-fuel based electricity, with about 80,000 jobs lost, or more than half of the current number; 2) fossil-fuel extraction, with almost a third of the current number, or 280,000 jobs eliminated; and 3) animal-based food production systems, with five percent of current jobs lost, representing half a million jobs.

The report provides a sectoral overview of the region and highlights how it is still struggling with gender and ethnic inequalities, skills gaps, insufficient social protection, and a large informal sector, despite more than a decade of steady progress. Prevailing decent work deficits, inequalities, and dependence on fossil fuel exports are expected to make Latin America and the Caribbean particularly susceptible to the social and economic impacts of climate change. The report also identifies the critical need for fairness in this transition and devotes a chapter to identifying the sector-wise equity and justice considerations needed to allow a successful transition in sectors that include energy, agriculture, forestry, waste management, tourism, transport, and construction.

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/Policy Tools or Evaluations

Jun 2019

Can government transfers make energy subsidy reform socially acceptable? A case study on Ecuador

The report looks at the impact of energy subsidies in Ecuador and its distributional effects as well as explores the scenarios of how the subsidies could be removed and replaced to confer benefits to vulnerable households equitably.

Geographic Scope
Sectors: Energy
Focus Areas: Employment > Social protections; Government intervention > Other, Public finance
Keywords: subsidy removal or reform; Bono de Desarrollo Humano; cash transfer programs
By: Filip Schaffitzela, Michael Jakobb, Rafael Soriac, Adrien Vogt-Schilbd, Hauke Ward
Publishing Organization: Inter-American Development Bank
Inter-governmental/international organization
Summary: The report identifies the impact of energy subsidies on public finance in Ecuador and looks at the distributional impacts of subsidies. To inform policy design, the authors use the household survey data from Ecuador, in combination with augmented input-output data, to assess the distributional impacts of energy subsidy reform. Energy subsidies account for about seven percent of Ecuador’s yearly public spending or two-thirds of the fiscal deficit. The study finds that it costs USD20 to transfer USD1 to the bottom income quintile through gasoline subsidies; USD10 through electricity; USD9 through diesel subsidies; and USD5 through liquefied petroleum gas (LPG) subsidies. Relative to household income, subsidy removal without compensation would be regressive for diesel and LPG, progressive for gasoline, and approximately neutral for electricity.

While removing these subsidies would yield clear economic and climate benefits, the expected adverse effects on vulnerable households are likely to make such reforms politically difficult. The authors analyze how a fraction of financial resources, freed up by the subsidy reform, could be used to mitigate the income losses of poor households by means of in-kind and in-cash revenue recycling schemes. The results indicate that removing all energy subsidies and increasing the existing social protection program, Bono de Desarrollo Humano, by nearly USD50 per month would confer net benefits of almost 10 percent of their current income to the poorest quintile and also free up significant amounts in the public budget.

The authors also conduct expert interviews to evaluate the political and institutional challenges related to the energy subsidy reform. They identify two combinations of reform options and recycling schemes that would benefit the poorest 40 percent of households, namely eliminating subsidies on gasoline, while increasing the amount transferred to vulnerable households through Bono de Desarrollo Humano; and replacing the universal LPG subsidies with targeted LPG vouchers. The authors suggest that countries in Latin America may benefit from increasing energy prices to fund development programs, reduce public deficits, and incentivize a transition to a low-carbon economy. The cash transfer programs of the region could be an instrument to reduce the impact of energy price hikes on poor consumers, thereby making price reforms more palatable.

Academic paper/Guidelines, Strategies and Recommendations; Policy Tools or Evaluations

Jan 2021

Mitigating inequality with emissions? Exploring energy justice and financing transitions to low carbon energy in Indonesia

This article analyzes energy justice in Indonesia’s transition to low-carbon energy and explores how policies have exacerbated energy injustice.

Geographic Scope
Sectors: Energy
Focus Areas: Inequality and/or poverty > Other; Investment > Private finance; Justice
Keywords: energy justice; energy poverty; climate finance; private finance; procedural justice; recognition
By: Abidah B. Setyowati
Publishing Organization: Energy Research & Social Science
Academic/research institution or journal
Summary: This article explores Indonesia’s efforts to reduce energy poverty in its transition to low-carbon energy, with a particular focus on how distributive, procedural, and recognition justice has been included in policies aimed at increasing private investment in renewable energy electrification. Based on the analysis derived from qualitative interviews, field observation, and the review of government documents and policies, the author argues that despite Indonesia’s energy justice agenda of providing access to affordable electricity for all, the policies in place do not effectively promote energy justice.

In terms of distributive justice, the author argues that spatial injustice in electricity access is still prevalent, especially in the eastern part of Indonesia, where many communities lack reliable energy access. The author suggests that many renewable rural electrification projects may exacerbate this spatial inequality by supplying households and cities that have access to a grid network, while neglecting communities that live closest to the electricity generation sites. This is partly due to the government’s encouragement of private investment that favors large-scale projects, thereby further exacerbating geographic inequalities. The author argues that procedural injustice is also prevalent in the energy decision-making processes due to a lack of transparency in the current bidding and procurement processes and limited space for the public participation and engagement in decisions. In terms of recognition, the author asserts that marginalized communities living in areas, where electricity is not considered economically favorable, are neglected and denied electricity access.

The author also makes suggestions for better ways to incorporate energy justice principles into policies and programs. First, energy policies should include more inclusive approaches, such as encouraging public participation and increasing transparency. Second, energy policies need to incentivize diversity beyond large-scale and on-grid projects to effectively target those most affected by energy poverty. Third, contextually grounded approaches best suited to the needs of local communities should be prioritized. Finally, public finance should also be considered in addressing the needs of those most vulnerable to energy poverty.

Report/Guidelines, Strategies and Recommendations; Policy Tools or Evaluations

Jun 2020

Transformative Climate Finance: A new approach for climate finance to achieve low-carbon resilient development in developing countries

The report highlights the need for the catalytic deployment of international public finance for climate finance and identifies eight levers for driving climate action, with just transition considerations seen as a necessary crosscutting theme to ensure progress.

Geographic Scope
Sectors: General
Focus Areas: Government intervention > Carbon pricing, Public finance; Investment > Private finance
Keywords: international climate finance; fiscal policies; sectoral policies; trade policies; carbon markets; innovation and technology transfer; climate intelligence; financial instruments
Publishing Organization: World Bank Group (WBG)
Development finance institution
Summary: The report identifies the mismatch between the amount of funding available and the amount needed for climate finance, thus highlighting the need to deploy international public climate finance more catalytically to increase the flows of private capital and government spending. The report identifies eight sets of financing levers for driving climate action: project-based investments, financial sector reforms, fiscal policies, sectoral policies, trade policies, innovation and technology transfer, carbon markets, and climate intelligence. For each of these levers, the report identifies the main interventions available, barriers to action, as well as the role and relevance of the instruments available. The report also broadly lists the mitigation and adaptation priorities across different sectors, including energy systems, land and ecosystem, the urban and infrastructure, as well as industrial systems.

The need for an equitable consideration of social and political economy issues in the countries and the regions to which they are applied is highlighted as a crosscutting issue across all levers. The report states that the use of climate finance to support this process, even when it does not achieve climate results directly, is essential for successful clean development. The report suggests that more can be done to refine the differentiation of climate finance to match the specific needs and circumstances of countries. This includes applying tiered conditionality for more advanced countries, which is dependent on their own efforts and orientation toward long-term strategies.

The report also acknowledges that a systematic and comprehensive analysis of the societal dimensions of transformative climate action covering all relevant sectors of the economy, along with the major types of transformative climate action, is still lacking. It states that the World Bank intends to contribute to closing this knowledge gap through a forthcoming report on the societal dimensions of transformative climate action.

Report/Policy Tools or Evaluations

Dec 2018

Enabling a just transition to a low-carbon economy in the energy sector: Progress and lessons in Emerging Markets

The report looks at the scope of just transitions in the energy sector in emerging markets, specifically Brazil, Russia, India, China, and South Africa (BRICS) as well as the Next 11 countries, through a simplified framework.

Geographic Scope
Sectors: Energy
Focus Areas: Employment > Job creation and/or equality, Other, Social protections; Government intervention > Regulation
Keywords: BRICS; Next 11 Countries (N11); emerging markets; state owned enterprises (SOE); business; private sector; indicators
By: Leah Worrall, Leo Roberts, Shelagh Whitley
Publishing Organization: HSBC Centre of Sustainable Finance
Private sector
Summary: The report takes a broad look at the enabling environment for just transitions in the energy sector in BRICS and the Next 11 countries through a framework that considers the macroeconomic and energy sector conditions, employment policies, and social structures in these countries.

The report finds that employment policies that exist across the countries, while key to economic growth, are often disconnected from the energy transition and wider macroeconomic planning. While the authors briefly map out the stakeholder base involved in just transitions in the energy sector, the report focuses on the role played by the government, businesses, and workers. The report posits the key role that state-owned enterprises (SEOs) have to play in enabling a just transition and identifies the absence of engagement platforms as a hindrance to effective dialogue.

The report applies a framework that uses transition indicators to broadly illustrate each country’s level of readiness for a just transition. However, the effectiveness of the indicators in representing procedural justice and inclusion issues will have to be assessed further.