Industrial – Just Transition Initiative

What is "Just Transition"?

Report/Policy Tools or Evaluations

Jun 2021

Towards a Just Transition Finance Roadmap for India: Laying the foundations for practical action

The report identifies priority actions for the financial sector in India to address social risks arising from the economic transition, with the help of a just transition framework that assesses the exposure by sector and region.

Geographic Scope
Sectors: Energy; General; Industrial; Mining; Transportation
Focus Areas: Employment > Job creation and/or equality; Government intervention > Other, Public finance, Regulation; Investment > ESG and corporate engagement, Other, Private finance
Keywords: India Just Transition Finance Roadmap (JTFR) project; urbanization; digitalization; Sustainable Development Goals (SDGs); double materiality; credit rating; green bond regulations; ESG reporting; Central Banks and Supervisors Network for Greening the Financial System (NGFS); freight; cement; green bonds; green loans; Reserve Bank of India; fiscal policy; CSR
By: Suranjali Tandon, Annapurna Mitra, Nick Robins
Publishing Organization: CDC Investment Works
Academic/research institution or journal
Summary: This report, a product of the India Just Transition Finance Roadmap (JTFR) project, identifies some priority actions that financial institutions can take to support climate action that also delivers positive results in terms of livelihoods and sustainable development. It involves a review of existing practices, an assessment of exposure by sector and region, and the identification of some priority actions for the finance sector. The authors describe the just transition agenda as the “connective tissue” that binds climate goals with social outcomes.

The authors highlight how India simultaneously confronts the challenges of multiple economic transitions—urbanization, digitalization, and the shift to zero carbon. They identify the distributional impacts on Indian states in sectors that are expected to be the most impacted, including: coal mining, electricity generation, agriculture, manufacturing and industry, along with transportation. Using the four dimensions of social risk arising from the net zero transition—namely livelihoods, energy access, public finance, and human development, they find that Madhya Pradesh, Jharkhand, Chattisgarh, Uttar Pradesh, Bihar, Odisha, Telangana, and Rajasthan will be the most affected by the zero-carbon transition.

The authors suggest that the framework shows a possible mapping of risks to investments, highlighting the role that financial sector players, regulators, and policymakers need to play in ensuring that a just transition is achieved. Furthermore, they highlight how the framework can be used to provide guidance for investors to understand company operations in vulnerable regions, and whether there are any investment strategies capable of mitigating the risks in these regions. It can also provide guidance for investors seeking to align capital allocations with the just transition framework. From their conversations with investors, the authors identify how the just transition is still at an early stage of development in India and needs definition and how it needs to be placed in a core sustainable developmental context. Furthermore, the conversations also reveal that policy action is a crucial catalyst for a just transition and that shareholder engagement on just transitions is increasing.

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.

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.

Academic paper/Policy Tools or Evaluations

Apr 2014

Industrial Risk Management: Shifting towards a More Just Transition

This report discusses France’s transformational change in industrial risk management from a top-down model to a more inclusive approach.

Geographic Scope
Sectors: Industrial
Focus Areas: Employment > Job creation and/or equality; Environment and/or pollution > Human health; Government intervention > Regulation; Resilience
Keywords: Industrial risk prevention; risk management plans; power dynamics; inclusive industrial governance; formal and informal negotiations
By: Antoine Le Blanc, Irénée Zwarterook
Publishing Organization: International Journal of Labor Research
Academic/research institution or journal
Summary: The authors examine France’s efforts to improve its approach to industrial risk management to promote fairness and resilience. The authors describe the traditional technocratic approach to managing industrial risk, contrasting it to the new legal framework—the Technological Risk Prevention Plan (PPRT)—introduced following a 2001 chemical plant explosion in Toulouse. This approach seeks to impose safety zones around industrial areas based on experts’ opinions and input from residents, bringing new voices into risk management.

The authors evaluate the implementation of this new legal framework in the industrial area of Dunkirk, discussing challenges due to technical complexities, competing interests, and inadequate consultation processes. They outline subsequent adjustments to local legislation to complement the PPRT and ultimately conclude that, while there are some failures, the process has encouraged fairer governance dynamics and local resilience.

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

Sep 2019

Accelerating Climate Action: Refocusing Policies Through a Well-being Lens

This report recommends increasing climate ambition by refocusing policy priorities through a well-being lens to facilitate “two-way alignment” between climate policy and other objectives.

Geographic Scope
Sectors: Agriculture; Buildings; Energy; Industrial; Transportation
Focus Areas: Environment and/or pollution > Human health, Nature; Government intervention > Carbon pricing, Regulation; Inequality and/or poverty > Other; Investment > Private finance
Keywords: well-being; policy trade-offs; policy synergies; social costs; indicators; affordability; competitiveness; job impacts
Publishing Organization: Organization for Economic Cooperation and Development (OECD)
Inter-governmental/international organization
Summary: To date, climate ambition has been largely hindered by potential trade-offs between climate policy and other goals, such as affordability, competitiveness, job creation, natural resource management, and public health and safety. In response, these authors recommend refocusing policy priorities through a well-being lens to facilitate “two-way alignment” between climate policy and these other objectives. The authors argue that systematically placing people’s well-being—not just their economic welfare, but also their political and social rights, health, education, security, and environment—at the center of decisionmaking will increase political and social support for more ambitious climate action and help overcome barriers to change.

The authors examine five economic sectors in depth: electricity, heavy industry, residential, surface transport, and agriculture. They explain how refocusing policy priorities and adopting indicators to track progress and inform decisions will make trade-offs and areas of potential collaboration more visible and manageable. They also highlight the importance of reconsidering traditional economic indicators—such as wealth, income, or GDP—when evaluating people’s well-being to acknowledge that pursuing purely economic goals can have negative impacts on other aspects of well-being. They point out the potential benefits of establishing priorities across sectors to deliver multiple well-being and sustainability outcomes, which they argue also helps identify opportunities for cooperation and coordination to meet ambitious climate mitigation targets.

Commentary/Case Study; Guidelines, Strategies and Recommendations

Jul 2020

Just Transitions: Lessons Learned in South Africa and Eastern Europe

This commentary summarizes critical elements of case studies on just transitions to help guide future research, and includes lessons learned in ongoing just transitions work in South Africa and Eastern Europe.

Sectors: Energy; Industrial; Mining
Focus Areas: Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans; Employment > Social protections; Inequality and/or poverty > Other; Justice
Keywords: case studies; power relations; racial justice; inclusivity
By: Ben Cahill
Publishing Organization: Center for Strategic and International Studies, Climate Investment Funds (CIF)
Academic/research institution or journal, Development finance institution
Summary: This commentary summarizes a workshop held by the Climate Investment Funds (CIF) and the Center for Strategic and International Studies (CSIS) on just transitions in South Africa and Eastern Europe. More case studies on sub-Saharan Africa, Latin America, and developing Asia could shed light on just transitions in countries with fewer economic resources and more limited social safety nets. The commentary includes a table summarizing critical elements of case studies to help identify key insights and best practices in future research.

In South Africa, just transitions are urgent because market and policy signals indicate an inevitable decline of coal, yet a transition could harm workers and communities dependent on coal mining. Policies intended to elevate renewable energy in the country have also failed to support energy access for black communities or address issues of racial injustice. The author notes that just transitions in South Africa need to address issues of inclusivity and power relations.

Central and Eastern Europe is a focal point for just transitions as many countries in the region anticipate phasing out coal and emissions-intensive industries in the coming decades. This commentary cites several positive examples of community engagement and local participation in just transitions. However, case studies indicate that more should be done to boost input at the local level.

Report/Guidelines, Strategies and Recommendations

Jan 2020

Green Jobs and a Just Transition for Climate Action in Asia and the Pacific

This report discusses the potential for green job creation and a just transition in the Asia-Pacific region.

Geographic Scope
Sectors: Agriculture; Energy; Industrial; Mining; Water
Focus Areas: Economic diversification/restructuring > Economic development plans, Industry and/or sector assistance or plans, Infrastructure investment; Employment > Job creation and/or equality, Skills, Worker safety; Environment and/or pollution > Nature; Government intervention > Regulation; Inequality and/or poverty > Gender inequality
Keywords: green jobs,; migration; tourism; Blue Pacific Big Ocean states; textile and garment industry; natural disasters; waste water management; foreign investment; capacity building; social dialogue
By: Cristina Martinez
Publishing Organization: International Labor Organization (ILO)
Inter-governmental/international organization, Labor organization
Summary: This report discusses the potential for green job creation and sustainable development in the Asia-Pacific region in the context of just transitions. It outlines how the region could accelerate this transformation by creating clean energy jobs that contribute to climate change mitigation—provided certain policy measures are put in place.

The report explores some of the opportunities and challenges of green job creation in the Asia-Pacific, in particular in the climate-vulnerable Pacific islands and in the textile and garment industry, a polluting sector that is nonetheless an important source of women’s employment and foreign investment. It then explores lessons learned from just transition pilot programs in the Philippines and Uruguay.

The report groups its recommendations for how to address the challenges of a just transition in Asia-Pacific into five categories: policy and institutions, training and capacity building, social dialogues and collaboration, awareness raising, and financing.

Report/Definitions and Concepts

Feb 2019

Labor Unions and Green Transitions in the USA: Contestations and Explanations

This paper concludes that unions are fragmented in their approach to climate policy, but it is too simplistic to divide them into two camps as supporters and opponents of more active climate policy.

Geographic Scope
Sectors: Buildings; Energy; Industrial; Transportation
Focus Areas: Economic diversification/restructuring > Industry and/or sector assistance or plans; Employment > Other
Keywords: political economy; stakeholder perceptions; unions; corporatism
By: Dimitris Stevis
Publishing Organization: Adapting Canadian Work and Workplaces to Respond to Climate Change (ACW)
Academic/research institution or journal
Summary: This paper examines approaches to climate policy among various unions and finds that they are fragmented in their approaches. Despite the tendency to divide unions into two separate camps on climate issues—supporters and opponents of more active climate policy—empirical analysis suggests a greater diversity of views.

The author suggests five distinct categories along a spectrum of support versus opposition, especially in response to the transition away from fossil fuels. He surveys union policies regarding the energy, construction, manufacturing, housing, and transport sectors. The second half of the paper proposes a political economy approach to green transitions, emphasizing the critical need to examine the social forces for and against a green transition, as well as the tactics and strategies that can help advance progress. The author also notes the diversity of U.S. unions, arguing that the lack of corporatism in the United States means that industrial relations and engagement with companies on environmental issues are quite different from those in Europe or other areas.