Stranded assets – 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.

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; Policy Tools or Evaluations

Sep 2020

How (Not) to Phase-out Coal: Lessons from Germany for Just and Timely Coal Exits

This paper identifies nine key lessons learned from Germany’s coal phaseout to help guide effective and equitable coal transitions elsewhere in the world.

Geographic Scope
Sectors: Energy; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans, Infrastructure investment; Government intervention > Public finance, Regulation; Investment > Stranded assets
Keywords: coal phase-out; compensation for plant operators; German Coal Commission; transparent communication
By: Felix Heilmann, Rebekka Popp
Publishing Organization: E3G
Academic/research institution or journal
Summary: This report examines the positive and negative elements of the coal transition process in Germany. The authors propose nine benchmarks for governing coal phaseouts in Europe and elsewhere. A timely and just coal phaseout requires good leadership, transparency, social inclusion, and the legal flexibility to adapt to changing circumstances, among other aspects.

Looking at the legislation shaping Germany’s coal phaseout, the authors argue that its decision to set a rigid deadline created an unstable transition process and generated conflict. They suggest that the lack of flexibility in the country’s legal framework will result in an unsynchronized coal exit with no room for “future governments to adjust the pathways and end date.” Although a national commission was created to oversee the phaseout, the authors criticize the lack of clarity regarding the implementation of its recommendations. They claim that regional and local stakeholders were not sufficiently involved in the phaseout process and call for aligning just transition measures with climate and sustainable development targets

Report/Case Study; Guidelines, Strategies and Recommendations

Jun 2019

Energy Transition in Mexico: The Social Dimension of Energy and the Politics of Climate Change

This report addresses the challenges and opportunities associated with Mexico’s climate change mitigation targets and offers recommendations to incorporate social and environmental dimensions into the policymaking process.

Geographic Scope
Sectors: Energy
Focus Areas: Government intervention > Carbon pricing, Regulation; Inequality and/or poverty > Other; Investment > Stranded assets; Justice; Social and/or cultural impacts > Other
Keywords: energy poverty; energy generation costs; land management; renewable energy; natural gas; social dimension of energy systems; participation mechanisms; energy sector governance
By: Carlos Torrnel, Mariana Gutiérrez, Jorge Villarreal
Publishing Organization: Climate Transparency, Iniciativa Climática de México (ICM)
Inter-governmental/international organization, Non-profit organization/civil society organization
Summary: This report examines Mexico’s energy transition and its associated challenges and opportunities. The energy transition is largely driven by efforts to achieve the climate change mitigation targets outlined in Mexico’s nationally determined contributions under the Paris Agreement, reduce electricity-generation costs, and address the social and environmental inequalities of the current energy system. The authors seek to broaden the scope of the discourse on energy transitions and incorporate social and environmental dimensions in the decision-making process.

The paper urges policymakers to incorporate mechanisms for participation, consultation, and co-design of the policies. The authors criticize the lack of social inclusion in policy reforms so far and provide recommendations for future social inclusion through engagement with local governments. While acknowledging that the energy transition will inevitably result in winners and losers, the authors make a series of policy recommendations to help the Mexican government reach its climate change mitigation goals in a fair way, including by creating socially inclusive spaces to allow participation in the energy sector, especially at the local level.

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.

Report/Guidelines, Strategies and Recommendations

Jun 2020

The EBRD Just Transition Initiative: Sharing the Benefits of a Green Economy Transition and Protecting Vulnerable Countries, Regions and People from Falling behind

This paper sets out the aims, rationale, and broad approach to implementation of the European Bank for Reconstruction and Development’s just transition initiative.

Geographic Scope
Sectors: General
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; Inequality and/or poverty > Other; Investment > Competitiveness, Private finance, Stranded assets; Social and/or cultural impacts > Non-financial loss, Pride or cultural identity
Keywords: social inclusion; infrastructure investment; climate policy; private sector; coal assets; strategic and regional planning; coronavirus; environmental reclamation; green economy; just transition diagnostic; environmental legacies
Publishing Organization: European Bank for Reconstruction and Development (EBRD)
Development finance institution
Summary: This paper examines how the European Bank for Reconstruction and Development (EBRD) will support progress in the economies where it invests. The paper outlines the aims, rationale, and broad approach to implementation of the EBRD’s just transition initiative, which aims to help the bank’s regions share the benefits of a green economic transition and to protect vulnerable countries, regions, and people from falling behind. The initiative builds on the EBRD’s experience of fostering transition toward sustainable, well-functioning market economies and focuses on the link between the green economy and economic inclusion. Working with national and regional authorities, EBRD clients, and other partners, the initiative emphasizes policy and commercial financing interventions that support a green transition while also assisting workers (particularly those whose livelihoods are linked to fossil fuels) in accessing new opportunities.

The paper includes an overview of the EBRD’s emerging just transition diagnostic and metrics for screening investments. This approach helps the bank screen certain regions and industries for vulnerabilities, assess the potential for various investments to advance just transition objectives and the bank’s core goals, and develop a set of policies and investment activities. This framework is especially useful in demonstrating how development finance institutions can link individual investments with broader regional plans, including in place-based investment.

Academic paper/Guidelines, Strategies and Recommendations

Sep 2017

Politicizing Energy Justice and Energy System Transitions: Fossil Fuel Divestment and a “Just Transition”

This paper seeks to broaden conceptualizations of energy justice to help policymakers and citizens identify the unequal distribution of costs, risks, and vulnerabilities across energy lifecycles and ensure a transition to a more just and democratized energy system.

Geographic Scope
Sectors: Energy
Focus Areas: Environment and/or pollution > Nature; Inequality and/or poverty > Other; Investment > Private finance, Stranded assets; Justice; Social and/or cultural impacts > Other
Keywords: green industrial policy; keep it in the ground; social license; socio-energy system; divestment movement; democratizing transitions; energy politics; political economy; energy justice; carbon lock-in
By: Noel Healy, John Barry
Publishing Organization: Energy Policy Journal
Academic/research institution or journal
Summary: This paper seeks to expand the current concept of energy justice across entire energy lifecycles—supply chains, production, distribution, and waste—to better illustrate the injustices of the current energy system so policymakers and citizens can identify the unequal distribution of costs, risks, and vulnerabilities across energy lifecycles. The authors identify two key areas that require greater scrutiny.

First, they call for greater recognition of politics and power dynamics. They contend that the recent divestment movement has enabled broad democratic involvement in institutional investment decisions that could have been disruptive. That movement expands “energy justice” beyond issues of the climate injustice of burning of fossil fuels to include the negative impacts of extraction, refining, production, and distribution of energy—thereby forcing responsibility onto a new set of actors.

Second, the authors call for addressing the idea of a just transition and the distributional impacts on labor in low-carbon transitions more systematically. They advocate greater recognition of the potential socioeconomic costs of decarbonizing policies, which can hinder popular support, and encourage energy justice researchers to engage more on labor issues.
The paper argues that a politicized framing of energy injustice and just energy transitions should encourage specific and localized energy policy decisions. In this way, justice analysis of an entire energy life cycle can help bridge the “bigger picture” of climate justice with the more micro-scale dimensions of energy justice and localized just transitions.

Report/Case Study; Policy Tools or Evaluations

Oct 2016

The New Social Contract: A Just Transition

This report advocates a new social contract focused on building inclusive and clean regions through managed, fair, and just transitions throughout the European Union.

Geographic Scope
Sectors: Energy; Industrial; 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 > Human health, Nature; Government intervention > Public finance; Investment > Competitiveness, Stranded assets; Social and/or cultural impacts > Pride or cultural identity
Keywords: policy architecture; strategic development agencies; local ownership
By: Arianna Americo, Charlotte Billingham, Maroš Šefčovič, Sanjeev Kumar
Publishing Organization: Foundation for European Progressives Studies, Change Partnership
Academic/research institution or journal, Inter-governmental/international organization
Summary: The authors advocate a departure from conventional climate policy, proposing instead a new social contract to build inclusive growth and support just transitions. The three pillars of this new social contract are rapid delivery of clean technologies as a source for sustainable growth and economic redevelopment, a just transition away from polluting industries, and shared management platforms to oversee these objectives. The authors examine three case studies of transitions in industrial and/or coal-based regions: North Rhine-Westphalia in Germany; the United Kingdom; and Bilbao, Spain.

Their review primarily focuses on models for managing a just transition at various levels of government, financing the process, and assuring key outcomes. Despite the differing contexts and approaches of these case studies, the authors identify shared lessons and general stages of a deep transition. They build on these findings to propose a policy architecture for a new social contract in the European Union consisting of four main elements: ownership, finance, management, and delivery. This integrated and effective policy approach could be institutionalized throughout Europe’s regional, national, and supranational governments to decarbonize effectively and to support and finance inclusive regional regeneration and investment.

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

Jun 2020

Seven Principles to Realize a Just Transition to a Low-carbon Economy

This report proposes seven basic policy principles to support just transitions in response to climate change and offers concrete ways to apply these principles in practice.

Geographic Scope
Sectors: General
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; Inequality and/or poverty > Gender inequality, Other; Investment > Stranded assets; Social and/or cultural impacts > Non-financial loss, Pride or cultural identity
Keywords: carbon lock-in; small and mid-size enterprises (SMEs); entrepreneurial discovery process; polluter pays principle; environmental legacies; environmental reclamation; historical responsibility for global emissions
By: Aaron Atteridge, Claudia Strambo
Publishing Organization: Stockholm Environment Institute (SEI)
Academic/research institution or journal
Summary: “Based on a critical review of former transitions, the authors distill seven basic principles for ensuring just transitions: actively encourage decarbonization; avoid creating carbon lock-in and more “losers” in these sectors; support affected regions; support workers, their families, and the wider community affected by closures or downscaling; clean up environmental damage and ensure that related costs are not transferred from the private to the public sector; address existing economic and social inequalities; and ensure an inclusive and transparent planning process.

These principles highlight the importance of supporting affected workers but place equal emphasis on ensuring environmental protection and restoration, diversifying industry and other economic activities, and tackling socioeconomic inequity (including gender inequality) in an active pursuit of decarbonization. The authors offer recommendations on how to implement each of these principles, arguing that the justness of a transition comes from pursuing each of these principles simultaneously and that failure to do so will result in a lack of necessary social and economic support. “

Report/Guidelines, Strategies and Recommendations

Aug 2018

Towards a Just and Equitable Low-carbon Energy Transition

This paper presents a high-level review of existing literature on energy and non-energy transitions, exploring the distributive consequences of energy transitions and identifying common features of successful transitions.

Geographic Scope
Sectors: Energy
Focus Areas: Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans; Employment > Job creation and/or equality, Skills, Social protections; Government intervention > Carbon pricing; Investment > Competitiveness, Stranded assets; Social and/or cultural impacts
Keywords: energy access; industrial policy; low carbon technologies; distributional impacts; carbon bubble; land management; fossil fuel subsidy reform
By: Ajay Gambhir, Peter Pearson, Fergus Green
Publishing Organization: Grantham Research Institute on Climate Change and the Environment
Academic/research institution or journal
Summary: This paper explores which regions, sectors, and groups could be adversely affected by a rapid low-carbon energy transition and offers lessons from previous transitions that could minimize the adverse impacts of current and future transitions. The authors discuss the broader distributional impacts of low-carbon transitions. These include the effect of higher energy costs on poor and middle-income households due to carbon pricing or the removal of fossil fuel subsidies, the implications of lost fossil fuel-related revenues for specific countries and regions, the impact on regions and workers heavily dependent on carbon-intensive industries, and the potentially adverse consequences of rapidly deploying low-carbon technologies.

The paper presents a high-level review of existing literature on energy and non-energy transitions. While the authors focus on the distributive consequences of energy transitions, they also explore how equitable transitions are achieved. They provide examples and brief summaries of policy mechanisms incorporated in previous transitions. Based on their review, the authors identify common features of successful transitions: foresight and timing, social dialogue and coordination among stakeholders, short-term protections coupled with active government involvement in reindustrialization, and assistance to those potentially impacted by higher energy prices