Enabling the Green Transition to be a Just Transition

This article is part of the series — Raisina Files 2022.

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We are at the cusp and in the middle of multiple transitions: Some are beginning, some are tipping, but they’re all redefining, reimagining, and restructuring life, lifestyles, and livelihoods. The net effect of these transitions and disruptions can only be hypothesised and remains unknown. The COVID-19 pandemic has provided a peek into what disruptions can do. It has been an accelerated transition to a “new normal” that has made the precarity of global supply chains evident. The global economy is said to have shrunk by 3.5 percent in 2020.^<1> It also laid out a picture in contrasts; and revealed the trade-off between health and livelihoods resulting from the lockdowns. The adequacy and ability of the health and economic systems to face such a challenge and slowdown was put to test. At the same time, the labour market was shaken to its core, and, unfortunately, it brought to the fore its embedded inequities, where vulnerable informal labour and certain sectors, in particular, suffered greatly.

The pandemic, perhaps, provided an accelerated view of another imminent challenge in front of us—that of climate change, being driven by rising emissions; the only difference being that climate change is not a recent challenge, and efforts to thwart its pace have been ongoing, albeit not at the scale or speed required. It is also one of those challenges that affects all parts of the world and, to that extent, unites us and pushes us towards a common imperative—to address its impacts (both direct and cascading) on all (especially vulnerable communities) through mitigation and adaptation.

The reality, however, is that communities, and where they may be in their socio-economic journey, look different across the world and also within nations and sub-national regions. This means that the capacity to undertake mitigation as well as adaptation measures is different across geographies, both globally and nationally. This dichotomy is evident in how in certain parts of the world, we are mulling over electricity grid modernisation, digitalisation, advanced vehicle technologies, etc. to effect carbon mitigation, while in others, communities are faced with lack of access to energy, existence of transport deserts, and poor working conditions, which severely impact their ability to adapt.

And yet, both these contrasting contexts find common ground in the pursuit of clean/green transitions and, in fact, provide unique leapfrogging opportunities. A developing economy like India, for example, recognises that an ambitious move towards renewable energy (RE) is as important for a cleaner environmental future, as it is for a robust economic future as well. This is seen in the ambitious targets set by the country at CoP 26, where Prime Minister Modi declared the achievement of 500GW of RE and 50 percent generation from non-fossil sources as intermediate goals for 2030, before reaching net zero in 2070. Reaching this goal can create 3.4 million new jobs in the clean energy space, particularly in distributed RE that helps to power not just local economies, but also improves energy access and electricity resilience.^<2>

However, climate mitigation goals through pursuit of low carbon pathways is about more than pursuing emissions reduction goals. It also implies new economic opportunities, and more importantly, opportunities to reinvent livelihoods in a way that they ascribe to the tenets of a ‘just transition’. This confluence of the green transition opportunities with the socio-economic realities and needs is a new and emerging dynamic for governments and businesses alike and points towards the need for a just transition.

Shared Need for Just Transition

A clean energy transition is inevitable and necessary to address emissions contributing to burgeoning climate impacts and to improve local health and environmental outcomes. At the same time, it will lead to industrial and technological transformations, where new jobs will be created, but some jobs will be lost or transformed as well. According to the International Labour Organisation (ILO), while there are a net of 24 million jobs likely to be gained by following a transition pathway consistent with limiting global temperature rise to 2 degree Celsius, there is also a likelihood of losing 6 million jobs, which will be experienced unevenly across the globe.^<3> This scale of job loss, stemming from phasing out of fossil fuels-based industries, is because they offer not just direct employment to individuals, but also support indirect jobs in multiples, and  induce local economic activity as well. If energy transition was a massive challenge, then the associated social transition that must take place—such that it conforms to the principles of justice and equity—is an equally considerable challenge, but rarely recognised as such. This should not mean paring down ambition, however, but should involve raising the intensity and pace of action.

These transitions provide an opportunity to rethink lives and livelihoods in a way that conventional energy systems have not. Take, for instance, the growing trend of decentralisation and democratisation of renewable energy systems in developing country contexts. Decentralised renewable energy is an application that combines decarbonisation with reliable electricity provision (even in remote/disaster prone areas) and enables local economies to emerge and sustain themselves. This can have positive impacts for electricity access, greater RE integration, and potential for economic diversification and autonomy in driving livelihoods. At the same time, global coordination and support through sharing of technological know-how between advanced and developing economies can be key to unlock leapfrogging opportunities that can help accelerate climate action.

As countries plan for transition, it will be important to engage with stakeholders across the board and enable participation in the planning and decision-making process. Communication of transition plans will be critical, as seen in the South African context. The country offers an example of including the voices of the parties affected by the clean energy transition in the process of planning itself. After including “Just Transition” in its National Development Plan back in 2012, at the behest of trade unions, the country set up a statutory body that brings together different stakeholders for nation-wide dialogues on just transition plans.^<4> This integration of just transition in planning should extend to wider climate action planning as well.

The nature of impacts associated with the clean energy transition, across communities, will determine whether the outcomes of the transition are rooted in justice or not. Beyond jobs, socio-economic growth and development through job security, access to transport and energy, growth of local industries, etc. is also important to build the adaptive capacity of communities to deal with uncertainties.

The following section delves deeper into these themes.

Developing 'Just’ Transition Pathways 

The concept of ‘just transition’ offers a holistic approach to green transitions that is rooted in justice and equity. It harbours elements of environmental justice (distribution of environmental benefits and burdens across communities), energy justice (equitable access and participation in energy systems), as well as climate justice (distribution of benefits and burdens of climate change across communities and generations).^<5>  Similar to climate action, while just transition is an important consideration for all country contexts, the capacity to deal with and address simultaneous developments on both the energy transition front and the social or labour transition front differs across countries, and even across communities within countries. This section paints the common imperatives and diverging realities of the clean energy transition in three broad strokes, while anchoring on ideas of justice and equity.

● Adjusting to Geopolitical Realignments 

• Regionalisation of Supply Chains: During the onset of the COVID-19 pandemic, the world experienced economic shifts, and social and political unrest. As international trade got affected, the pandemic spurred an increasingly inward-looking focus among economies. In India, the ‘Make in India’ campaign to promote localisation of supply chains was prioritised. As we move towards new low carbon supply chains, changes in the economic and geopolitical landscapes, in line with emerging resources and technology hubs must be anticipated. Power and politics will realign themselves as countries’ demand for green hydrogen, battery storage, solar panels increase vis-à-vis that of coal, oil, and gas. Currently, the ongoing war between Russia and Ukraine has brought Europe’s natural gas dependence on Russia, and the connectedness of global supply chains, in focus. It has led to inflationary pressure across the world, much like the impacts experienced through the 2000s as a result of disruptions such as the financial crisis, SARS epidemics, and the tsunami. All of these disruptions pushed nations to hedge their risks and look towards increasing localisation of supply chains.^<6> For the energy transition, while such actions may be motivated by the need for ensuring energy security, there is also the risk of isolation for countries that are not well equipped to sustainably transition to low carbon pathways independently, similar to the way in which vaccine nationalism would have been counter-productive to achieving the global goal of overcoming the COVID-19 pandemic. Countries that have achieved inflection points for clean energy technologies should strongly tread on the path of technology transfer to prevent other countries from having to reinvent the wheel.

• Narrowing the Global Decarbonisation Divide: Countries across the world are differently equipped to partake in the clean energy transition and are on different timelines to achieve decarbonisation goals. Part of this is due to the different stages of socio-economic and technological development that countries are at, and that justifies international assistance to developing and vulnerable nations, as mentioned above. A second aspect stems from the historical practices in the global political economy, wherein despite resource abundance, local communities could get exploited in the absence of strong institutional and labour laws. A just and equitable transition is important to ensure that this phenomenon, otherwise known as the ‘resource curse’, does not repeat itself in a clean energy future.^<7> For instance, African nations such as the Democratic Republic of the Congo and Ghana fall in the upstream (mining) and downstream (disposal of electronic-waste (e-waste)) parts respectively of the low carbon technology supply chain, and face sizeable associated environment and public health risks. ^<8> Globally, there is uneven distribution in terms of where the mining for minerals and metals takes place, where these resources get utilised in the form of low carbon technologies, and where resultant e-waste gets disposed of—all of which have differential implications for the pace of advancement towards a clean energy economy across countries. Global climate action can benefit from narrowing these gaps in the pursuit of decarbonisation, also called the ‘decarbonisation divide’. ^<9> On the other hand, renewable energy technologies as well as green hydrogen (renewable powered hydrogen production) lend themselves to some degree of decentralisation that potentially aid regions in gaining a sense of energy independence and power resilience.

● Reviewing Climate Action from a Social Justice Lens 

• Collaborative Climate Action: For the developing world, the sustainable development goals are paramount for long term well-being. Climate change impacts pose risks to this development process. At the same time, the more a region is socio-economically dependent on the sector that is soon to become obsolete, the greater the need for a just transition.^<10> When done in a ‘just’ manner, climate action through green transitions and development processes can account for these risks, while also providing livelihoods that prevent vulnerabilities from worsening. This includes thinking of justice as recognition of the different stakeholders, their vulnerabilities, and their needs. It also includes procedural justice and distributive justice, which ensure access to decision-making processes as well as to any benefits emerging from the transition. Just transition calls for a whole system approach to climate action with people at the centre. Therefore, securing public awareness and buy-in through practicing equity and inclusion in transition processes, can make the experience relatively smooth and collaborative for all parties involved.^<11> Governments can further support economic diversification and job seeking, such that workers are able to apply their skills across sectors.

• Human-Centred Approach to Transition Planning: To prevent unintentional externalities resulting from climate mitigation activities, ‘just transition’ must be integrated within these goals. This would demand that the process of nationally determined contributions goals achievement is inclusive and supplemented with participatory and bottom-up approaches.^<12> For India, this would entail strong collaboration between the Centre and the State (“cooperative federalism”) as well as with local governments and organisations that are closer to communities. This implies thinking of transitions with a ‘human-centred design’ approach^<1>. This approach could potentially open up pathways for pure-play decarbonisation efforts and sustainable development to converge.

● Reimagining Transition in Employment

• Beyond Job Creation: As mentioned above, just transition is about more than job creation. The ‘number of jobs created’ does not help understand the quality of jobs, for instance, and by itself cannot speak to the goals of environmental, energy, or climate justice. Just transition highlights importance of job accessibility, quality of jobs, security of jobs, as well as resultant impacts on lives and livelihoods.

• From Informal to Formal Jobs: According to the ILO, even today, more than 60 percent of workers are part of the ‘informal economy’, usually characterised by the absence of ‘decent work’ conditions, or adequate labour and social protection, in other words.^<13> Informal jobs can severely dent the adaptive capacity of individuals and households embedded in such jobs, especially in the face of major shocks like the COVID-19 pandemic, or industrial obsolescence. Context-specific social characteristics can further determine specific outcomes. In India, for instance, female participation in the workforce contracted by 9.4 percent between 2020 and 2022.^<14> Unlike the male workforce, the female workforce has not returned to pre-pandemic levels, owing to increasing domestic responsibilities during the pandemic.^<15> In the case of the clean energy transition, therefore, addressing systemic socio-economic inequities and inequalities will be important from the perspective of how well vulnerable stakeholder groups are able to adapt to the transition. 

• Transition Support: A potential temporal lag between job elimination and securing new jobs can be expected, and governments should offer transition support to that end. This can prevent vulnerable communities from experiencing adversities while transitioning between jobs and offer temporary sustenance. The absence of socio-economic support for communities can exacerbate negative outcomes and put development and equity goals at risk. 

• Cross Sectoral and International Cooperation and Collaboration: It is crucial to examine the informal sector so that it can be included in any government or private sector plans for training and skilling, and that these training programmes can be better designed for workers. Private sector collaboration will be instrumental to this effort, given that they have direct access and reach to workers, and can be first movers in taking informal labour associated with their operations into the ambit of formal labour. Such collaborative action on labour transition should extend internationally as well. International assistance and partnerships in enabling countries to implement a just transition will be crucial, but given the shortfall in climate finance and lack of partnerships all these years, it may not be prudent for national governments to depend on such an avenue.^<16>

Conclusion 

As we journey on, it is evident that the low carbon pathways—while unquestionably desirable from a climate mitigation standpoint—will be more socially beneficial than the fossil fuel regime only with active interventions to ensure a just transition. A clean energy future is not an equitable future by default. In other words, they do not do away with the creation of ‘winners’ and ‘losers’ by virtue of being clean. It will be important to question where and how the average person fits in large-scale transition, who this transition is for, who is impacted, who is paying for it, and what role can different people play in it, such that both their lives and livelihoods are secure.  These questions will have different answers across countries and, therefore, just transition principles need to be contextualised.

However, what is clear is that the pursuit of a just transition means to ensure that the most vulnerable do not get further pushed back. Certain clear pathways to integrate justice in green transitions will rely on: Global collaboration and partnerships, as well as strong enforcement of rules and laws that determine social outcomes for people engaged in resource intensive industries; view climate action from a social justice lens and adopt bottom up approaches to drawing up energy transition and climate mitigation plans and activities, such that they serve just transition principles of recognition, and procedural and distributive justice; and looking beyond job creation towards the nature of jobs, and support in between jobs to gauge how the emerging clean energy industry is faring on justice and equity fronts.

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^<1> In general terms, ‘human-centred design’ places the people and contexts that a product, service, or policy is being designed for, at the centre of the design process, and includes communities to co-design solutions through multiple iterations.

^<1> Eduardo Levy Yeyati, and Federico Filippini, “Social And economic impact Of COVID-19,” Brookings, 2021.

^<2> Sameer Kwatra and Charlotte Steiner, comment on “India Could Create Millions of Jobs Through Renewable Energy,” NRDC Blog, comment posted on January 27, 2022.

^<3> Aaron Atteridge, Isabel Blanco, and Claudia Strambo, Insights from Historical Cases of Transition: Background Paper for the EBRD Just Transition Initiative, European Bank for Reconstruction and Development, 2020.

^<4> International Energy Agency, Recommendations of the Global Commission on People-Centred Clean Energy Transitions, IEA, Paris, 2021.

^<5> Frida Lager et al., “A Just Transition for Climate Change Adaptation: Towards Just Resilience and Security in a Globalising World,” PreventionWeb, 2021.

^<6> David Simchi-Levi and Pierre Haren, “How the War in Ukraine is Further Disrupting Global Supply Chains,” Harvard Business Review, March 17, 2022.

^<7> J.-F. Mercure et al., “Reframing incentives for climate policy action,” Nature Energy, 6, (2021): 1133–1143.

^<8> Benjamin K. Sovacool et al., “The decarbonisation divide: Contextualizing landscapes of low-carbon exploitation and toxicity in Africa,” Global Environmental Change 60, (2020).

^<9> Sovacool et al., “The decarbonisation divide: Contextualizing landscapes of low-carbon exploitation and toxicity in Africa”

^<10> Christiane Beuermann and Victoria Brandemann, Just Transition in National Climate Plans: An Analysis of Case Studies from South Africa, Costa Rica and Ukraine, Friedrich-Ebert-Stiftung, 2021.

^<11> “Just Transition in National Climate Plans: An Analysis of Case Studies from South Africa, Costa Rica and Ukraine”

^<12> “Just Transition in National Climate Plans: An Analysis of Case Studies from South Africa, Costa Rica and Ukraine”

^<13> International labour Organization, Transition from the informal to the formal economy - Theory of Change, February 2021, Switzerland, UN, 2021.

^<14> Ashmita Chowdhury, Mitali Nikore, and BehanBox, “India needs a more gender-sensitive fiscal policy,” India Development Review, April 1, 2022.

^<15> Chowdhury, Nikore and BehanBox, “India needs a more gender-sensitive fiscal policy”

^<16> Ian Mitchell, comment on “Climate finance is the elephant in the room at COP26,” Chatham House, comment posted November 5, 2021.

• Climate Change
• America
• Bhutan
• The Pacific
• East and Southeast Asia
• East Asia
• climate change
• Climate Mitigation
• COP 26
• economic systems
• global economy
• green hydrogen
• Green Transition
• socio-economic
• supply chains

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