compensation – Just Transition Initiative

Summary

The authors of this paper identify and discuss important factors for successful implementations of green fiscal reforms in Chile, Mexico, Colombia, Belize, Venezuela, and Ecuador. When taken into consideration, these factors can help increase the technical and political feasibility of green fiscal reforms.

The authors draw on academic literature and expert knowledge to provide insights into the possibilities for—and limitations of—green fiscal reforms. Based on their analysis, they identify key factors for the successful introduction of green fiscal reforms, emphasizing the importance of favorable political conditions, comprehensive reform planning, and the gradual sequencing of reforms. They also emphasize the need to address distributional impacts on low-income households through social protection schemes based on stakeholder consultations with all relevant social groups. Their inclusion in the decisionmaking process should alleviate concerns about disproportionate adverse impacts on any single group.

The authors conclude by highlighting the international community’s important role in supporting green fiscal reforms through knowledge sharing and financing the macro-economic costs of reforms (such as by tying results-based payments to the introduction of a price on emissions or the de-risking of investments in clean energy and energy efficiency).

Summary

This report from Climate Transparency reviews climate actions by the Group of Twenty (G20) states, assessing their transition to low-carbon and climate-resilient economies. The report questions whether the G20 countries are on track to meet Paris Agreement goals, documenting leaders and laggards.

The report finds that current Nationally Determined Contributions (NDCs) would lead to a global temperature increase of around 3.2 degrees Celsius. The authors outline the progress made by G20 countries since the Paris Agreement based on several decarbonization indicators. They criticize nearly all G20 countries for not implementing climate mitigation policies more aggressively, calling on them to institute a 50% emissions cut by 2030 to reach Paris Agreement goals.

The report analyzes several just transition initiatives in G20 countries to identify lessons learned. In Canada, for example, a federal task force developed a just transition plan for coal workers and communities, and the Chinese government seeks to allocate $4.5 billion over the next three years to support the closure of small coal mines. Australia, on the other hand, negotiated a comprehensive agreement with the Victoria government and three privately owned power stations to reduce job losses rather than manage their effects.