Competitiveness – Just Transition Initiative

What is "Just Transition"?

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; 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.

Academic paper/Guidelines, Strategies and Recommendations

Apr 2020

Equity, Climate Justice and Fossil Fuel Extraction: Principles for a Managed Phase Out

This paper offers general principles and policy insights to help the international community equitably manage the social dimensions of a rapid transition away from fossil-fuel extraction.

Geographic Scope
Sectors: Energy; Mining
Focus Areas: Economic diversification/restructuring > Industry and/or sector assistance or plans; Employment > Job creation and/or equality, Skills, Social protections; Environment and/or pollution > Human health, Nature; Government intervention > Public finance, Regulation; Investment > Competitiveness, ESG and corporate engagement; Justice; Social and/or cultural impacts > Other
Keywords: equity; public revenue; transition loss; fossil fuel dependence; common but differentiated responsibilities; global commons; international climate politics; environmental justice; human rights
By: Greg Muttitt, Sivan Kartha
Publishing Organization: Climate Policy
Academic/research institution or journal
Summary: This paper explores how to equitably manage the social dimensions of a rapid transition away from fossil-fuel extraction within international climate politics. It analyzes equity issues related to fossil-fuel extraction and efforts to curb it in accordance with climate targets. The authors examine three common equity approaches from the literature, from which they derive guiding principles and policy recommendations for managing this global challenge.

The authors review the distributional issues arising from the phaseout of fossil-fuel extraction and argue that meeting international climate targets will require a more strategic approach to accelerating transitions in both Organization for Economic Cooperation and Development (OECD) and non-OECD countries. They then examine the implications of fossil-fuel extraction for employment, public revenues, and energy provision, examining how extraction activities can be both a “blessing” and a “curse.”

The authors then discuss three equity frameworks that appear in the broader climate-policy literature: allocating carbon budgets based on economic efficiency, development needs, and “fair shares” of global transitional efforts. Drawing from this analysis, they propose five principles for managing concerns related to equity and climate change, touching on questions surrounding the cost and pace of transitions, as well as the distributional impacts at various levels of government. They conclude with policy suggestions for how to apply these principles in practice.

Report/Guidelines, Strategies and Recommendations

Aug 2020

Economic Development Policies to Enable Fairness for Workers and Communities in Transition

This report analyzes the potential efficacy of U.S. federal policies and programs that could help fossil fuel–producing regions and workers transition to a low-carbon future.

Geographic Scope
Sectors: Agriculture; Energy; Land-use; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans, Infrastructure investment; Employment > Job creation and/or equality, Skills; Government intervention > Public finance, Regulation; Investment > Competitiveness, Private finance
Keywords: financial support mechanisms; rural development; capacity building; place-based strategies
By: Daniel Raimi, Wesley Look, Molly Robertson, Jake Higdon
Publishing Organization: Resources For the Future (RFF), Environmental Defense Fund (EDF)
Academic/research institution or journal, Non-profit organization/civil society organization
Summary: This report analyzes the U.S. federal programs that could help fossil fuel–producing regions transition to a low-carbon future. It divides these programs into those that target local or regional economies driven by natural resource development (including timber and agriculture as well as fossil fuels) and those with broader geographic or economic scope. The authors suggest that the former, place-based development approaches can be especially effective.

The report examines three regional economic approaches that might be successful in a just transition context: offering capacity-building programs and technical assistance, financially supporting public and community organizations, and financially supporting private firms that may otherwise struggle to access funding. The authors also indicate that such efforts would require coordination among federal, state, and local officials and that substantial scaling up would be required for them to have a meaningful impact.

The report identifies programs that target natural resource–dependent communities and highlights a handful of initiatives that could aid just transitions efforts. For example, the Economic Development Integration program coordinates multiple economic development initiatives across agencies while making deliverables more efficient, and the U.S. Department of Agriculture’s rural development programs provide technical and financial support for public and private rural institutions. An extensive appendix in the report details many federal policies in full.

Report/Guidelines, Strategies and Recommendations

May 2014

Jobs after Coal: A Just Transition for New Zealand Communities

This report examines New Zealand’s coal sector, identifies opportunities for green growth and development in a low-carbon economy, and offers general policy recommendations for a just transition

Geographic Scope
Sectors: Energy; 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 > Regulation; Investment > Competitiveness
Keywords: carbon bubble; sustainable wood industry; alternative low-carbon industries
By: Cindy Baxter, Jenny Campbell, Rachel Eyre, Jeanette Fitzsimons, Kristin Gillies, Zella Downing, Tim Jones, Rosemary Penwarden
Publishing Organization: Coal Action Network Aotearoa (CANA)
Non-profit organization/civil society organization
Summary: This report examines the coal industry in New Zealand, including the various challenges the industry is facing in the country and globally. The authors suggest ways in which coal communities can reinvent themselves and identify areas in which they will need help in planning a transition to a low-carbon economy.

The report discusses the potential losses and regional impacts of a transition away from coal and examines the possibility of sustainable job creation in a low-carbon economy. It draws on experiences from various transitions around the world to inform how the transition to a green economy could be achieved in New Zealand. The authors offer a general policy roadmap to achieve a transition, emphasizing the importance of early assessments of the impacts of phase-out scenarios and social dialogue with workers and their unions. They call for a long-term planning process that involves all stakeholders to take place prior to the transition.

Report/Case Study

Jun 2017

Coal Transition in the United States

This report describes the U.S. shift away from coal, including its driving forces and policy measures to ease the transition.

Geographic Scope
Sectors: Energy; 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; Investment > Competitiveness
Keywords: power plus plan; environmental reclamation; bankruptcy
By: Irem Kok
Publishing Organization: Institute for Sustainable Development and International Relations (IDDRI), Climate Strategies
Academic/research institution or journal
Summary: This report provides an analysis of the U.S. coal sector transformation over the last decade. It describes the decline of U.S. coal production after 2008 due to unfavorable market dynamics and a changing federal regulatory environment. It then discusses the shale gas revolution and the expansion of renewable sources of energy, which created competition with alternative fuels in utility sectors.

The report focuses on Obama-era environmental regulations, which had a significant impact on U.S. coal production between 2014 and 2016. The Obama administration’s decarbonization efforts, which set limits on carbon dioxide and other greenhouse gas emissions, led to a decline in domestic demand for coal. Moreover, the federal extension of renewables tax credits enabled wind and solar to become competitive in the energy market.

This report examines recent distributional impacts of the coal sector transition and discusses the various policy measures that were introduced, including their successes and their failures. The author argues that the Trump administration’s rollback of environmental regulations and tax cuts for coal companies will not be enough to revive the coal sector and emphasizes the need to manage impacts on coal communities.

Report/Case Study

Jun 2017

Coal Transition in the Netherlands

This report presents the Netherlands’ successful attempt to exit coal and explains how the oil crisis in the 1970s subsequently led to an energy-mixed economy.

Geographic Scope
Sectors: Energy; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans, Infrastructure investment; Employment > Job creation and/or equality, Skills, Social protections; Government intervention > Public finance, Regulation; Investment > Competitiveness
Keywords: subsidies; coal revival; natural gas
By: Ben Gales, Rick Hölsgens
Publishing Organization: Institute for Sustainable Development and International Relations (IDDRI), Climate Strategies
Academic/research institution or journal
Summary: This case study examines the coal transition in the Netherlands from 1965 to 1990 in the region of Limburg and discusses the reasons for the transition as well as its socioeconomic impacts. Due to market competition from oil imports and the domestic discovery of natural gas, the country decided to reduce its economic dependence on coal in favor of other energy sources.

The authors focus on the factors that made the transition possible, including the cooperation of labor unions, the presence of alternative employment opportunities (such as in the chemical sector), and particularly the conservative view of then Prime Minister Joop den Uyl, who was convinced that mining was inhumane. The unions foresaw an unfavorable future for coal miners and reached an agreement with state-owned companies for alternative employment. The study analyzes the effect of the measures adopted to accompany the transition. The authors focus on the government’s redevelopment strategies—such as the restructuring of the coal sector, with major mining companies transforming into chemical companies—and the development of new businesses.

The last two sections of the study discuss the return of coal as an imported energy source in the mid-1970s due to the oil crisis, as well as the country’s current struggle to stop coal consumption, which accounts for 12% to 13% of national energy consumption.

Report/Case Study; Guidelines, Strategies and Recommendations

Jun 2017

Coal Transition in the United Kingdom

This report highlights the main elements of the coal transition in the United Kingdom and discusses the government’s policies in response to the unintended consequences of the coal transition.

Geographic Scope
Sectors: Energy; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Infrastructure investment; Employment > Job creation and/or equality, Skills, Social protections; Environment and/or pollution > Nature; Government intervention > Carbon pricing, Public finance, Regulation; Investment > Competitiveness
Keywords: environmental reclamation; coalfield regeneration
By: Steve Fothergill
Publishing Organization: Institute for Sustainable Development and International Relations (IDDRI), Climate Strategies
Academic/research institution or journal
Summary: This case study examines the United Kingdom’s coal transition, which began in the early 1980s amid unfavorable market conditions and the privatization of coal mines and power plants. A 2013 carbon tax, as well as the 2015 government decision to close unabated coal-fired power plants, accelerated the transition process, leading to a near complete phase-out of coal use.

The report analyses the socioeconomic impacts of the transition, focusing on unemployment, high electricity bills for the poor, and low wages for alternative jobs. The author also discusses the policy measures implemented to ease the transition and describes various financial streams, such as the European Union Structural funds, that helped finance the revitalization of coal regions.

The report evaluates those policy measures against their intended outcomes. The measures were considered economically successful (as they provided 180,000 alternative jobs) but failed to meet other social needs. Although they were never designed to be aligned with climate change policies, they have evolved through time in response to political pressures. Some of the measures, such as the welfare benefits for redundant workers, are well embedded in the United Kingdom’s economic model. The report, however, calls for enhanced planning and early warnings of closures in future transitions.

Report/Case Study; Guidelines, Strategies and Recommendations

Sep 2018

Coal Transition in Spain

This case study discusses the main features of the transition away from coal in Spain, including the driving forces, policy responses, and potentially negative socioeconomic effects.

Geographic Scope
Sectors: Energy; Mining
Focus Areas: 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 > Nature; Government intervention > Public finance, Regulation; Investment > Competitiveness
Keywords: environmental restoration; labor unions; national coal plans
By: Pablo del Río
Publishing Organization: Institute for Sustainable Development and International Relations (IDDRI), Climate Strategies
Academic/research institution or journal
Summary: This case study analyzes the policy-driven coal transition that occurred in Spain over the last two decades. The study describes the key role of coal in the Spanish economy and discusses the motives behind the coal transition, its impacts, and the policy measures that were introduced to mitigate such impacts.

Generally, market competition from cheap imported coal has triggered a downturn in Spanish coal production since 1993 and a decrease in employment in the coal sector. This report details how a plan signed by labor unions and the government in July 1997 to protect the future of coal miners, as well as a subsequent 2006–12 coal plan and EU legislation, have all provided a roadmap for Spain’s coal transition.

The report describes the positive and the negative effects of these policies, identifying lessons learned. It calls for greater collaboration among stakeholders to better understand the priorities and for the establishment of social funds to ensure better transition assistance and worker compensation.

Report/Case Study; Guidelines, Strategies and Recommendations

Sep 2018

Implementing Coal Transitions: Insights from Case Studies of Major Coal-consuming Economies

This report summarizes insights from the various workstreams of IDDRI’s Coal Transitions project, which seeks to develop feasible trajectories and policy guidance for deep transitions in major coal-producing countries.

Geographic Scope
Sectors: Energy; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans; Employment > Job creation and/or equality, Skills; Environment and/or pollution > Nature; Government intervention > Carbon pricing, Public finance, Regulation; Investment > Competitiveness, Stranded assets
Keywords: energy access; transition scenarios; coal trade
By: Oliver Sartor
Publishing Organization: Institute for Sustainable Development and International Relations (IDDRI), Climate Strategies
Academic/research institution or journal
Summary: This report summarizes key findings from the Institute for Sustainable Development and International Relations’ (IDDRI) Coal Transitions project, which seeks to support fact-based dialogue on the future of coal through analysis of past coal and industrial transitions. It reviews transition scenarios for six major coal-consuming economies (China, India, South Africa, Poland, Germany, and Australia) to analyze the global coal trade.

The author argues that coal transitions are already underway due to both climate and non-climate policy factors, that coal transitions are technically feasible and affordable, that past successes indicate just transitions for coal workers and communities are possible, and that coal transitions could strengthen global climate action and deliver other social and economic objectives.
The report concludes with recommendations for further research in order to better understand options related to local contexts and how an industry can limit its use of thermal and metallurgical coal. It emphasizes the importance of social dialogue as a condition for appropriately supporting workers and communities to manage the transition in a way that does not exacerbate existing fragilities.