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New Energy World magazine logo
New Energy World magazine logo
ISSN 2753-7757 (Online)

How we can be sure of a just energy transformation, and why it matters

27/3/2024

8 min read

Dean Cooper Photo: Oliver Dixon Photography/Energy Institute
Dean Cooper, WWF Energy Lead, makes a point at International Energy Week 2024, while Sam Fankhauser, Oxford Net Zero Research Director and Professor of Climate Economics and Policy, looks on

Photo: Oliver Dixon Photography/Energy Institute

The concept of a ‘just transition’ has increasingly become a compulsory issue for discussion amongst climate policymakers. But what does this mean, and will it really make any difference? How can any organisation or individual align with this process? asks Dean Cooper, Global Energy Lead at WWF.

One of the first problems is that a just energy transition means different things to different people. It refers to the urgently required shift from fossil fuels to renewables that must take account of the associated social impact. Those with income and livelihoods currently dependent upon fossil fuels (and related supply chains) will not support this transition unless they have other work opportunities. This will depend upon the conditions locally (at the country, regional and community levels), including the availability of renewable energy resources.

 

So, the world needs many just energy transitions – together these can form a lasting global transformation. In 2021, at the UN climate talks held in Glasgow (COP26), WWF released a discussion paper: Just Energy Transformation, which included several real-life examples of how just energy transitions have been achieved, but also showed the lack of any coordination or dedicated resources.

 

One of the key outcomes from the resulting discussion at this event was… confusion! Everyone had a different angle, and no one was clear how to turn the rhetoric into reality.

 

New alliance
Recognising the essential need for any climate action to be well-managed and inclusive of people and nature, we brought together a group of diverse organisations that were all committed to just energy transformation. In 2022, at the UN climate talks in Egypt (COP27), WWF together with the UN Development Programme and KPMG, launched the Alliance for Just Energy Transformation (AJET). AJET is a platform for like-minded organisations to work together on the broader impacts of energy transitions around the world.

 

To address the urgent need for a global energy shift, AJET members aim to share knowledge and understanding of issues related to energy transitions, thereby ensuring full alignment of international expertise and resources. This alignment is critical since we really have no time to waste.

 

Just transition has become a popular term in climate negotiations but still has no globally-accepted definition. It remains open to interpretation, risking a lack of clarity over whom should benefit from it, and how it applies to the dramatic shift we need from fossil fuels to renewables. Countries at the UN climate talks held last year in Dubai (COP28) agreed to move away from fossil fuels, though the details of how will only be agreed during consultations in the coming months. It is crucial that countries and organisations align to commonly agreed principles for just transition.

 

Energy the leading cause
The global energy system is the leading cause of the climate crisis – primarily driven by fossil fuels, which are responsible for around 81% of global CO2 emissions. We urgently need sustainable energy transitions away from such fossil fuels to renewable energy, taking care to avoid unnecessary disruption to the natural environment. (We must not allow this process to deepen the nature crisis that already threatens the planet, with about 70% loss of nature over the past 50 years.)

 

Such energy transitions bring the threat of social resistance unless alternate opportunities are created for those most affected by this shift through loss of livelihoods and income generation.

 

Conversely, any energy transition can offer a massive opportunity for social justice, thereby addressing past inequalities. Transitions to renewable energy can help bring universal energy access, generate new opportunities for decent work, and so contribute to better quality of life and wellbeing. However, this is not guaranteed if the energy transitions that need to take place are not timely and well-managed.

 

This need for effective alignment is the driver behind AJET – to develop and unite different stakeholders around a common understanding. Since its launch, membership has grown to include organisations such as the ITUC, REN21, the Environmental Defence Fund, Gridworks, Neyen, and the World Benchmarking Alliance. All members have agreed to the eight core principles for AJET:

  1. Be fair; protect the rights and needs of everyone, and respect values, without privileging any one group over another.
  2. Ensure climate and energy justice.
  3. Deliver energy access and development.
  4. Be comprehensive, coherent and transparent.
  5. Include clearly defined, robust and inclusive stakeholder engagement and social dialogue.
  6. Ensure justice, transparent decision-making and access to reliable information for all people impacted by energy transactions.
  7. Be sustainable, ambitious and consistent.
  8. Be science-based.

NDCs
To provide some clear short-term targets, the Alliance has agreed a two-fold focus for 2024: first, to integrate just energy transitions (JETs) into nationally determined contributions (NDCs), and second to facilitate mechanisms for raising finance and investment for activities that will help bring about effective JET implementation.

 

The basis for including JETs into NDCs is directly linked to the Paris Agreement, which enshrines the imperative for a just transition for the workforce (preamble). It also demands that its goals are achieved based on equity and the principle of common but differentiated responsibilities and respective capabilities (articles 2.2 and 4.1).

 

The Agreement notes that society’s dependence on fossil fuel must discontinue in order to meet the climate goals, though this shift away from fossil fuels will most negatively impact those with the least resilience (the poorest and most marginalised groups in society). Unless this disruption is carefully managed, and support given to groups at risk of suffering disproportionately from the transition to unlock and access a fair share of the benefits, they will resist the change, undermining political and societal support, thereby delaying the necessary action.

 

On this basis, a growing proportion of nearly 40% of NDCs now refer to just transition, while the increasing number of related events and the inclusion of just transition as a theme in recent climate change COPs demonstrates the growing recognition of the importance of this issue.

 

However, despite this increasing acknowledgement, there is still little common application or shared understanding of how to implement just transition in practice. This lack of detail can be seen by the fact that only 17% of NDCs in 2022 incorporated a dedicated chapter or section on just transition, with its inclusion even less common in developing country NDCs.

 

To combat the need for more urgent focus on this issue, the Just Transition Work Programme (JTWP) was established at COP27. At COP28, the modalities were agreed for JTWP, which aims to assist more countries incorporate the social impacts of energy transition into their climate action plans, and so implement actions that also reduce inequalities.

 

Transitions to renewable energy can help bring universal energy access, generate new opportunities for decent work, and so contribute to better quality of life and wellbeing. However, this is not guaranteed if the energy transitions that need to take place are not timely and well-managed.

 

A significant short-term opportunity now exists to prepare revised NDCs holistically, to ensure that their development also helps to drive the achievement of other policy targets such as the sustainable development goals, and the Paris Agreement goals (including JETs for an overall just energy transformation). AJET’s working group on JET in NDCs led by WWF is already working to provide a clear rationale for the critical incorporation of JETs into NDCs, and to trigger discussion about what is needed to urgently deliver the necessary action on the ground.

 

However, none of this will be possible without adequate and targeted financing. The Alliance aims to mainstream the principles of the just energy transformation in the investment community, focusing on the identification of investors who are willing to take additional risk associated with emerging markets because of the just transition benefits. We aim to identify the barriers and enablers for investors, as well as the barriers and enablers of projects themselves, who are in need of financing, taking into account regional and cultural nuances across four pilot countries.

 

Finance is key to delivering on the just energy transition, and to accelerate pace on existing project implementation. By creating the business case for just energy transition principles, the Alliance and its partners will seek to transform the traditional methodology of energy investment in a way that is inclusive and sustainable in our changing economy.

 

To join the Alliance, please visit the AJET website, or contact us at ajet@wwfint.org

 

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.