Infrastructure investment – Just Transition Initiative

What is "Just Transition"?

Podcast/Guidelines, Strategies and Recommendations

Nov 2021

Just Transitions: Economic Diversification for Coal Dependent regions

This podcast looks at various opportunities and challenges for coal dependent regions in India and South Africa to create just and sustainable pathways to diversify their economies.

Geographic Scope
Sectors: Energy; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Infrastructure investment; Employment > (Re)Training and/or educational programs, Skills; Environment and/or pollution > Human health; Government intervention > Public finance, Regulation
By: Sandeep Pai, Gaylor Montmasson-Clair, Srestha Banerjee
Publishing Organization: Climate Investment Funds (CIF), Center for Strategic and International Studies
Academic/research institution or journal, Development finance institution
Summary: Gaylor Montmasson-Clair with Trade & Industrial Policy Strategies (TIPS) and Srestha Banerjee with iForest join Sandeep Pai (CSIS) to explore the opportunities and challenges for coal dependent regions in India and South Africa to create just and sustainable pathways to diversify their economies.

Commentary/Guidelines, Strategies and Recommendations

Aug 2021

COP26: The Perfect Opportunity for Latin America and the Caribbean to Champion a Just Transition to Net Zero

This commentary narrates the disproportionate impacts of the pandemic and extreme weather events on the Latin America and Caribbean region and highlights the urgent need for a just and equitable transition to net zero.

Geographic Scope
Sectors: Energy
Focus Areas: COVID-19; Economic diversification/restructuring > Infrastructure investment; Employment > Job creation and/or equality; Government intervention > Public finance, Regulation
Keywords: COP26; net-zero; energy efficiency
By: Leonardo Beltran
Publishing Organization: Center for Strategic and International Studies, Climate Investment Funds (CIF)
Academic/research institution or journal, Development finance institution
Summary: The disproportionate impacts of the pandemic and extreme weather events on the Latin America and Caribbean (LAC) region highlight the urgent need for a just and equitable transition to net zero in LAC. The region has a unique opportunity to step up at the upcoming COP26 by incorporating just transition priorities into two foundational energy initiatives. The Renewable Energy for Latin America and the Caribbean (RELAC) Initiative along with the implementation of the Observatory of Energy Management Systems in Latin America and the Caribbean, supported by sources of climate finance, have the potential to help deliver on the region’s energy and climate goals while also generating the new economic and employment opportunities needed for a new green economy that works for all.

Commentary

Jun 2021

Worker’s Voice and Investing in a Just Transition: The Fonds de Solidarité FTQ

Investors are embedded in society, and the Solidarity Fund of Québec shows one example of direct engagement by investors to help workers and communities to prepare for an energy transition.

Geographic Scope
Sectors: General
Focus Areas: Economic diversification/restructuring > Infrastructure investment; Employment > Skills; Investment > ESG and corporate engagement, Private finance
Keywords: investors; multi-sector dialogue; labor movement
By: David Wood, Andre Almeida Santos
Publishing Organization: Center for Strategic and International Studies, Climate Investment Funds (CIF)
Academic/research institution or journal, Development finance institution

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.

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.

Report/Case Study; Guidelines, Strategies and Recommendations

Mar 2021

Seizing the Urban Opportunity: How National Governments can Recover from Covid-19, Tackle the Climate Crisis and Secure shared Prosperity through Cities

This collaborative report examines how national governments can leverage cities to help address the triple challenge of Covid-19, sustainable development, and climate change.

Geographic Scope
Sectors: Energy; Industrial; Transportation
Focus Areas: COVID-19; Economic diversification/restructuring > Infrastructure investment; Employment > Job creation and/or equality; Environment and/or pollution > Human health; Government intervention > Public finance, Regulation; Inequality and/or poverty > Other; Investment > Private finance; Resilience
Keywords: Shared prosperity; inclusive societies; resilient cities; poverty; emerging economies; urban infrastructure; national-level government; Covid-19 recovery
By: Marion Davis, Shagun Mehrotra, Aarathi Kumar, Alfredo Redondo, Anna Kustar, Britta Rennkamp, Christopher Gillespie, Daizong Liu, Freya Stanley-Price, Gorka Zubicaray, Hendricus Andy Simarmata, Jessica Hanlon, Leah Lazer, Madhav Pai, Nick Godfrey, Pablo Lazo Elizondo, Pandora Batra, Retno Wihanesta, Robin King, Shiyong Qiu, Sophia Vitello, Tanya Jiménez
Summary: The authors discuss how national governments can harness cities to bring about a sustainable and inclusive post-pandemic economic recovery while achieving climate goals. They focus on six emerging economies to demonstrate how fostering zero-carbon, resilient, and inclusive cities can advance national economic priorities for shared prosperity.

Referencing case studies from China, India, Indonesia, Brazil, Mexico, and South Africa, the authors explore three themes: 1) the need for a low-carbon urban transformation and its associated socio-economic benefits; 2) the importance of both resilience and decarbonization; and 3) the availability of resources to foster low-carbon, resilient, and inclusive cities. To inspire countries ahead of the 2021 UN Climate Change Conference (COP26), they analyze how cities can help national governments not only achieve their climate goals and shared prosperity, but also accelerate the Covid-19 recovery by making them more connected, inclusive, and clean.

The authors conclude with a global call to action, urging national governments to develop climate and sustainable development strategies centered around cities. While governments are essential to implementing transformative policies, the authors urge national leadership to partner with the private sector and local climate-action groups to finance sustainable and resilient urban infrastructure.

Report/Guidelines, Strategies and Recommendations

Aug 2020

Enhancing the Role of National Development Banks in Supporting Climate-Smart Urban Infrastructure

This paper focuses on enhancing the role of national development banks in accelerating investment in climate-smart urban infrastructure.

Geographic Scope
Sectors: Energy; Industrial; Transportation; Water
Focus Areas: Economic diversification/restructuring > Infrastructure investment; Government intervention > Regulation; Investment > Other, Private finance; Resilience
Keywords: Climate-smart urban infrastructure; development finance; sustainable cities; climate resilience; national development banks; multilateral development banks
By: Sarah Conway, Priscilla Negreiros, Bella Tonkonogy, Kristiina Yang
Publishing Organization: Climate Policy Initiative
Academic/research institution or journal
Summary: Because cities are essential to climate mitigation and uniquely vulnerable to climate impacts, there are compelling and wide-ranging reasons for them to invest in low-emissions and “climate-smart” infrastructure. However, cities face various barriers to implementing such changes, including pressure to address infrastructure deficits and improve basic services. In this context, the authors explore how national development banks (NDBs) can support climate-smart investments and address cities’ larger systemic challenges in their efforts to contribute to the Paris Agreement goals and broader development objectives.

The authors emphasize the comparative advantages of NDBs in supporting climate-smart urban infrastructure. They recommend several opportunities to enhance NDB support for such investments. Some of these recommendations are directed at NDBs, while others require action by national and local governments, bilateral cooperation agencies, and multilateral development banks or international financial institutions.

Report/Guidelines, Strategies and Recommendations

Nov 2020

Coal Community Sourcebook: Local Experts, Issues & Ideas from Local Voices

This resource provides information and resources on community-led efforts in coal-impacted communities in Kentucky, West Virginia, and Wyoming, including a list of local organizations with innovative approaches and ideas.

Geographic Scope
Sectors: Agriculture; Energy; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Infrastructure investment; Employment > Job creation and/or equality, Skills; Environment and/or pollution > Human health, Nature; Government intervention > Public finance; Social and/or cultural impacts > Pride or cultural identity
Keywords: Community engagement; poverty; community well-being; local initiatives; social inclusion; community listening sessions; rural lifestyle; social entrepreneurship; land reclamation; community empowerment; sustainable agriculture; air pollution
By: Linda Lance, Kelsey Forren, Jim Lyon, Shannon Heyck-Williams, Jessica Arriens, Wes Look, Adele Morris, Jeremy Richardson, Elliot Diringer
Publishing Organization: Partnership for Responsible Growth, National Wildlife Federation
Non-profit organization/civil society organization
Summary: This report is the outcome of community listening sessions held by research organizations in West Virginia, Kentucky, and Wyoming to compile data and mainstream important issues and challenges pertaining to coal-impacted communities. It summarizes local communities’ work on these issues and provides an appendix of local organizations for policymakers’ consideration. It concludes by highlighting federal programs and actions that these communities have identified as crucial.

The report examines the socioeconomic impact of the coal decline on local communities across the United States and criticizes the lack of federal support to remedy those effects. It identifies key areas—such as local water and road infrastructure, healthcare, education, social safety nets, and local small businesses—that need federal funding to boost the local economy. More importantly, it calls for communities’ involvement in designing and implementing policy to ensure their knowledge and creativity are taken into consideration.

The report further describes key federal programs and actions that can be readjusted to provide resources and technical support to frontline communities. These include miners’ pension and health benefits, the Abandoned Mine Funds (AML), the Black Lung Disability Trust Fund, and the Department of Commerce’s Economic Development Administration and Small Business Administration, which provide grants to local small businesses. The report includes an appendix containing contact information for local organizations and individual leaders who can serve as resources to policymakers.