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Just Transitions: An Introduction

This podcast discusses the importance of a just transition in the context of climate change policies and investments and explores the impact of Covid-19 on just transitions.

This podcast provides an accessible introduction to concept and importance of a just transition in the context of climate change policies and investments.  Mafalda Duarte, head of the Climate Investment Funds, and Nick Robins, Professor in Sustainable Finance with the Grantham Institute, join Sarah Ladislaw with the CSIS Energy Security and Climate Change Program to explain the meaning and importance of a just transition in the context of their work.  They move on to discuss how investors can support just transitions and close by examining the potential impacts of the Covid-19 pandemic on the just transition agenda.

Participants

  • Sarah Ladislaw: SVP, Director and Senior Fellow, Energy Security and Climate Change Program
  • Mafalda Duarte: CEO, Climate Investment Funds
  • Nick Robins: Professor in Practice for Sustainable Finance with the Grantham Institute
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from the Resource Library

Who Needs a Just Transition?

This commentary introduces the just transitions concept, summarizes its importance in meeting climate and social equity goals, and emphasizes the need to define the term more clearly and increase its appeal.

Detail

This short commentary introduces the just transitions concept and emphasizes its role in helping to meet climate and justice goals. It briefly outlines the origins of the term in the labor movement and its later adoption by the international climate community. The commentary notes that climate change will create unavoidable social and economic changes that will be distributed unevenly, underscoring the need for a proactive approach.

The authors acknowledge that the term “just transitions” is unfamiliar to many, while to others it suggests a threat to their livelihoods and way of life. A failure to better engage with labor unions, threatened business sectors, and governments has created resistance to decarbonization plans. However, the authors argue that just transitions can provide an organizing principle for dialogue and engagement, as well as a means of securing buy-in for climate action.

Finally, the commentary notes the relative lack of useful guidance on implementing just transitions, and the need for more concrete tools and strategies. A careful review of lessons learned about implementation, as well as practical plans and resources for policymakers and practitioners, will be critical in helping to advance just transitions.

Just Transition Concepts and Relevance for Climate Action

This report explains the origins and evolution of just transitions, and offers a framework to represent the range of definitions as well as underlying ideologies and approaches.

Detail

This report outlines the origins of just transitions in the US labor movement, the later adoption of the concept by the environmental and climate justice movements, and its role in international climate negotiations. The authors note that the term “just transitions” evokes a range of responses, from enthusiasm to confusion to outright skepticism, suggesting the need for a clear definition.

The paper presents a framework to capture the range of definitions and interpretations of just transitions. One key dimension is scope, including both distributional impacts—or who and what is affected in transitions—as well as intention (the ideological preference between reforming or transforming existing political and economic systems through just transitions). The other dimension in the framework is social inclusion, or the range of recognition and procedural justice for various groups. The framework does not seek to identify a single “correct” definitions of just transitions, but rather captures a range of ideologies and approaches to the concept.

A final section of the paper suggests that the next stage of just transitions work will be to advance solutions and to apply lessons learned. The authors list several priorities for future research including concrete tools and strategies, more case studies of developing countries, more effective social engagement, and new financing methods.

Climate and the Just Transition: A Guide for Investor Action

This guide provides a framework for investors to further the just transition agenda through their climate strategies and core operating practices.

Detail

This guide was generated as part of the “Investing in a Just Transition Initiative,” a joint program of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science (LSE) and the Initiative for Responsible Investment at the Harvard Kennedy School. This initiative seeks to enable institutional investors to support inclusive economies and sustainable development through their action on climate change. This guide explains the motivations for investor action toward just transitions and describes how investors can apply existing approaches to pursue a just transition in their climate strategies and core operating practices.

Investors can make an important contribution to the just transition agenda as fiduciaries, stewards of assets, allocators of capital, and influential voices in public policy. The authors identify five ways in which investors can incorporate just transition principles into their practices, both as individual institutions and collective initiatives. These approaches include investment strategy, corporate engagement, capital allocation, policy advocacy, and shared learning. The authors provide concrete examples of these approaches and recommendations for next steps.

Making Waves: Aligning the Financial System with Sustainable Development

This paper describes the structural barriers to sustainable development finance commensurate with climate change and development goals, arguing that interventions are needed to transition to sustainable finance.

Detail

This paper describes the significant increase in the financial community’s willingness to engage in sustainable development and the accompanying increase in sustainable development policy and regulatory measures over recent years. Despite this momentum, the authors argue that the current system and levels of commitment are insufficient to provide the financing needed to meet the 2030 Agenda and the Paris Agreement. They attribute this to misalignment and barriers in the financial system.

Based on this argument, the authors provide reasons to intervene in the financial system to mobilize finance for sustainable development. Chief among them are eliminating pricing externalities, promoting innovation, ensuring financial stability, and ensuring policy coherence. The authors also identify the “essential parts” of a financial system that can support these goals and explore the necessary components and risks of the transition to sustainable finance.

These components highlight the need to alter the design and function of the financial system itself through policy or regulatory interventions. This multidimensional and nonlinear process will also require new performance metrics to embed sustainability in the financial system and its outcomes.