'Just transition’ strategies

14 May,2024

News Excerpt:

The fight against climate change demands a transition away from coal, but the economic impact on coal-dependent communities raises concerns.

The concept of “just transition” has been around since the 1980s, when it was used in a movement by US trade unions to protect workers affected by new water and air pollution regulations. 
In recent years, the concept has gained traction with reference to meeting climate goals by ensuring the whole of society – all communities, all workers, all social groups – are brought along in the pivot to a net-zero future.
The International Labour Organization (ILO) defines it this way: “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.”
What is important, though, is that each country fosters ongoing dialogue to develop a common vision for what a just transition means for their impacted workers, communities and businesses.

The study analyzed government plans for coal phase-out worldwide and found that over half of the plans involve monetary compensation for affected workers and communities.
The planned global compensation for the coal phase-out amounts to around $200 billion.

This figure excludes China and India, the world's top coal consumers, which currently lack concrete phase-out plans.
If China and India were to implement compensation measures similar to those already established, the projected compensation sum for both nations would be $2.4 trillion to achieve the 2°C target and $3.2 trillion for the 1.5°C target.

The study highlights the complex balancing act involved in phasing out coal, where ensuring a smooth transition for workers and communities is crucial alongside environmental benefits.
The study highlights the importance of international collaboration in financing Just Transition, particularly for developing countries like India, which may face greater economic burdens.

Combined, about 23 countries, home to 16 percent of global coal power infrastructure, have committed approximately $209 billion for compensation.
The amount it translates to just around 6 gigatonnes of carbon dioxide (CO2) emissions is avoided.

The cost of compensating for coal phase-out per tonne of avoided CO2 emissions is lower than recent carbon prices in Europe making Just Transition policies consistent with or lower than European carbon pricing.
Approximately half of the current compensation funds originate from international channels, such as the Just Energy Transition Partnerships, which are multi-lateral structures for accelerating the phase-out of fossil fuels.
The projected compensation figures for China and India alone rival the entirety of international climate finance pledged in Paris, surpassing current levels of international development aid to these countries.

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