We only have one shot – the case for a just energy transition

Achieving the energy transition is one of greatest, most critical goals of our time. The IPCC's latest report revealed that if we continue on our current trajectory and remain reliant on fossil fuel driven, high emission economies, we will not meet the UN’s Sustainable Development Goals. Achieving the rapid and significant transformation of our global energy system will require unprecedented economic, industrial, and technological transformation in all countries and radical collaboration across all facets of society. With great minds focused on the complex engineering, operational, logistical, and financial challenges of this transition, we must not forget a crucial lynchpin – people.

The strategic decisions we make to further the transition to a low carbon, environmentally sustainable economy must not leave communities behind. Instead, we must take a people-centred, inclusive approach to deliver on climate action and carbon reduction goals to mitigate the clear and foreseeable risks associated with such a significant global evolution. An energy transition that is just should provide decent and quality jobs, security for supply chains, and social inclusion for communities that face unemployment/poverty or are vulnerable to immediate climate threats such as sea-level rise, extreme weather, and biodiversity loss.

Currently, there is a clear disparity between communities that can easily adapt to environmental and economic changes, and those that cannot. The move to more sustainable economies can have significant, long-term negative impacts on workers and communities. Failing to adequately address these will risk leaving assets, workers, communities and even countries ‘stranded’ – left unsupported to deal with oncoming changes, particularly areas dependent on fossil fuels for growth, trade and employment. When the UK’s coal mining industry severely contracted in the 1980s, it had a devastating impact on the communities. Even today, affected areas continue to lag behind national averages when it comes to health and wellbeing, skills and employment.

The transition into renewable energy can have significant impacts across the value chain, from vulnerabilities facing those involved in extracting critical minerals for renewables technologies, to potential abuses of the rights of people near land needed for rapidly scaled up green infrastructure growth, and dangerous and unfair working conditions throughout supply chains.

When it comes to the transition out of high-carbon industries, exiting from mining and fossil fuel extraction risks not only instability for commodity-dependent economies, but also for workers and communities who may not be able to secure new employment and livelihood opportunities.
The good news is that, if handled correctly, evidence suggests that the transition to a low-carbon economy will create greater socio-economic opportunities for many. There are huge potential co-benefits to gain from a fossil-free world, such as job creation, productivity enhancements and inequality reductions. A successful clean energy transition should also improve the access, affordability, quality and reliability of energy for all. The IEA’s Net Zero by 2050 roadmap estimates that while the transition could cause around five million job losses, it could also create 30 million jobs across the energy system while providing clean energy to the nearly 800 million people currently without electricity and the 2.6 billion people without clean cooking solutions.

There isn’t one single approach that will suit every community or country. Economic, social, geographic, political, and educational factors, as well as development level all play their part. While certain countries and regions have greater dependency on fossil fuels for their livelihoods for example, others will need greater financial assistance.

Success is dependent on the prevention, mitigation and remediation potential of socio-economic impacts of climate policy and actions, and this will require bold and diverse action from all societal actors, whether in government or the private sector. Whilst it is impossible to list all the actions required within a short article, I have summarised some of the key themes in the below:

The just transition is a process as well as an outcome, which means that those impacted by change should be included in the decision-making that affects them. Just transition planning is only effective when informed by negotiation through social dialogue, stakeholder engagement (involving unions, employers, government, communities, international organisations, academia and civil society, including youth) and mitigation of social impact. We have worked with the Scottish Government to start the just transition process for the Grangemouth industrial cluster, providing a new and granular understanding of the cluster’s relationships with place, people, and economy, and moving the whole community towards a shared vision for the future. Central to the engagement was the convening of public and private sectors stakeholders and local community voices to reimagine, through co-design, how a net zero future could regenerate economic, environmental, and social value, providing a blueprint for others to follow. Dialogue and buy-in is also critical for the private sector and current net zero transition plans often fail to account for just elements. A 2021 report by World Benchmarking Alliance researched 180 companies in high emitting sectors and found that only 15 companies included the voices of those who will be most impacted in their plans. Not only this, but of all the companies assessed, only two met the fundamental requirements of just transition in their net zero transition plans.

International, national, regional and local policy action is critical to shifting our economies towards more sustainable production and consumption patterns. Climate policies must consider potential social costs, which risk being disproportionately higher for the most vulnerable groups in our societies that have a higher sensitivity and lower adaptive capacity to adapt to climate change – especially in the short term. Equity and inclusion, taking demographic factors like race, gender and income levels into account, should be built into clean energy policy design to prevent any risk of disproportionate or unintended consequences for certain segments of society. Doing so will avoid exacerbating existing inequalities and support the principles of human rights, ensuring that no one is left behind.

Equipping affected workforces in high emitting sectors with the skills needed for new manufacturing or production processes or maintenance needs for new, green industries is critical. To address this will involve quantification of job potentials, analysis of the skills gap and a comprehensive plan to effectively identify workers, educate and train them in the skills needed and making equally available decent, quality work. The UK, for example, has set up a Green Jobs Taskforce to gather evidence on skills needed for the transition to net zero. Additionally, following the country’s decision to phase out oil and gas production in the North Sea by 2050, the Danish government is planning an aid package to ensure local oil and gas workers are upskilled through carbon capture, utilisation and storage (CCUS) and electrification projects.

Energy industries and supply chains are often geographically concentrated, meaning they contribute significantly to the social, economic and cultural fabric of the communities they are located in. The move to greener industries needs to take a targeted and localised approach to help communities adjust to, and benefit from, the transition. Governments have a responsibility to ensure social protection systems are in place, and companies must pay fair taxes, contribute to insurances, and provide additional benefit packages to help impacted stakeholders effectively navigate through the transition. The EU Just Transition Fund was created as a financial instrument to help member governments address asymmetric job shifts through long-term support mechanisms. The financial sector has a key role to play in making financial flows consistent with a pathway towards net zero and climate-resilient development, and need to better incorporate social and human rights considerations when financing the energy transition – through product offering, investment process and stewardship. COP28 saw UNEP FI and the ILO launch a just transition roadmap for the finance industry, helping to embed just transition practices in their operations.

Historically, calls to address the social dimensions of climate change have often been met with fears that it could undermine necessary and urgent environmental action. It is however important to recognise the social dimensions as critical to pathways for climate action. Many of the strategies that make sense from a social and human rights perspective – indigenous rights, decent work and responsible supply chains – also support better climate outcomes. Social dimensions can help reduce community opposition to new policies or projects for example, or mitigate the risk of deepening inequality within and between countries, regions, communities and people.

Ultimately, a just energy transition will provide decent work, quality jobs, security for supply chains and social inclusion for communities and people that face unemployment, economic challenges or are vulnerable to immediate climate threats. This is why we must ensure that the just transition is not seen as a ‘nice to have’, or an afterthought, but a critical factor in enabling success. We cannot pursue and catalyse a net zero transition in isolation from our efforts to ensure a just transition. There can only be one transition and it needs to be just.

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