Just Transition

Posted 17 Dec 2024

5 min read

Why in the News?

India underscored the need for global climate justice and equitable action during the Second Annual High-Level Ministerial Round Table on Just Transition at COP29.

About Just Transition

According to International Labour Organization (ILO), a just transition means greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities, and leaving no one behind.
- It is a process of shifting from high-carbon, unsustainable systems to low-carbon, sustainable economies in a way that is equitable, inclusive, and fair.
It was recognised by the Just Transition Declaration agreed at the UN Climate Change Conference in Scotland (COP26).
Key elements include:
- Equity: Protecting the rights and livelihoods of workers and communities, particularly those dependent on fossil fuels and other high-carbon industries.
- Inclusion: Ensuring that all stakeholders—workers, governments, industries, and civil society—are involved in decision-making.
- Sustainability: Aligning economic and social systems with the goals of reducing GHG emissions and conserving natural ecosystems.

Timeline of events related to evolution of Just transition in UNFCCC discussions

Need of Just Transition

Impact on Workers: ILO estimates that while 24 million new green jobs could be created by 2030, 6 million jobs in carbon-intensive industries might be lost.
Climate Change Mitigation: Emission reduction in energy sector plays a significant role in meeting the Paris Agreement target of limiting global warming to 1.5°C.
- GHG emissions must peak before 2025 at the latest and decline 43% by 2030.
Energy Security: Adoption of diverse renewable energy sources reduces reliance on volatile fossil fuels subject to geopolitical tensions and price fluctuations.
Avoiding Discontent: E.g., Yellow Vest protests in France (2018) protested against climate measures which disproportionately affected lower-income groups.

Challenges in Just Transition

High Costs of Transition: For instance, India will require more than a trillion dollars over the next three decades to transition its coal mining and thermal power sectors (Just transition, Just Finance report).
Regional Disparities: Coal-reliant regions, such as South Africa’s Mpumalanga or India’s Jharkhand, have limited resources to diversify their economies, exacerbating inequalities in transition readiness.
Energy security and accessibility: Coal-based power plays a significant role in developing countries for development purposes and enhancing energy accessibility and affordability for their citizens.
- E.g., coal accounts for about 55% of India’s commercial energy requirements and coal-based TPPs produce more than 70% of electricity.
Economic losses: As per International Energy Agency (IEA) stranded fossil fuel assets (i.e., no longer economically viable) could result in losses due to shift toward green transition.
- E.g., Saudi Arabia derived 68% of its 2022 budget revenue from oil.
Inequitable Impacts: For instance, women are overrepresented in informal and low-carbon jobs, limiting their opportunities in green sectors (UN Women, 2023).
Other issues: Infrastructure challenges like upgradation of grid infrastructure; lack of adequate technology transfer; etc.

Initiatives Taken for Just Transition

India

Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY): To ensure certain minimum provisions for development programme by all District Mineral Foundations (DMFs).
DMFs (non-profit trust): Established under Mines and Minerals (Development and Regulation) Amendment (MMDRA) Act 2015 set up by the State Governments in all mining-affected districts.
PLI Scheme: National Programme on High Efficiency Solar PV Modules: To build an ecosystem for manufacturing of high efficiency solar PV modules in India.
Global Collaboration: Collaboration with Asian Development Bank to develop a Just Transition Worker Support Facility for coal-mining reliant districts and states.
National Clean Energy Fund (NCEF): funds clean energy ventures through a coal cess.
Other initiatives: Solar cities and parks, National Green Hydrogen Mission, and the Green Energy Corridors, etc.

Global

Just Energy Transition Partnership (JETP): Launched at COP 26 of UNFCCCwhere a developed country provides financial and technical support for inclusive energy transitions in a developing country.
ILO Guidelines for a Just Transition towards Environmentally Sustainable Economies and Societies for All adopted by representatives of governments, employers’ and workers’ organizations in 2015.
‘Just Transition for All’ initiative: Initiative by the World Bank emphasizes a people-centric approach to transitioning away from coal, a major and carbon-intensive energy source.

Way Forward

Set up National Just Transition body to independently monitor coal closure and repurposing and ensure fair distribution of transition benefits and costs.
Explore sustainable financing through mechanisms like Just Energy Transition Partnership (JETP), green bonds, etc.
Banks and multilateral institutions should raise commitments by providing more grants, concessional loans, etc.
Maintain and enhance social infrastructure, e.g., introduce compensation packages to formal workers engaged in low-carbon jobs, such as severance pay, voluntary retirement scheme (VRS), etc.
Develop strategies to create new, sustainable jobs and provide adequate training, and reskilling programs for workers impacted by the energy transition.
Foster active participation of all affected groups, especially marginalized and vulnerable communities, in the planning and decision-making process.
Develop and augment green energy infrastructure by upgrading the transmission and distribution systems.