Just transition is the shift from an extractive to a regenerative economy, through a just and equitable process. To ensure that low-carbon transitions are truly just, it is critical to map the broad socio-economic implications of such transitions, and develop policy interventions, investment plans, financial mechanisms, and community engagement that holistically address the fundamental changes occurring as part of these transitions.
Rooted in country- and sector-specific contexts, CPI’s Just Transition work identifies pathways for sustainable and equitable development that accounts for the impacts on all key stakeholders at all levels from national to local—workers and communities, public and private employers, governments, financial institutions—and then identifies policy and finance tools to advance a just transition.
Leveraging our deep portfolio of climate policy and finance work and local expertise in emerging economies—including Brazil, India, and Indonesia—we use a data-driven approach that supports multi-stakeholder efforts at the sectoral, state, and national levels to inform decisions of policymakers and private actors, mobilize capital, and build capacity of local institutions.
More specifically, CPI’s Just Transition work includes:
1. Analytical Frameworks
Low-carbon transitions carry significant economic and social risks, but also create new economic opportunities that can simultaneously address existing socio-economic inequalities. To support policymakers in better understanding these complex issues and design effective policy solutions, CPI has developed analytical frameworks for just transitions of four main carbon-intensive sectors—electricity, transport, agriculture, and heavy industry (steel and cement)—with the following key components:
- Financing Frameworks for policymakers and other critical stakeholders to create economic models and comprehensive financing approaches that can equitably manage transitions risks for those impacted.
2. Transition Policy Strategies
- Diagnostic analysis to provide policymakers with a comprehensive assessment of the socio-economic status quo and potential transition impacts to provide a baseline from which to measure policy changes and impacts.
- Policy development and implementation identifies, tailors, and assesses policy instruments to support country and sector-specific just transitions, as well as interim milestones.
- Monitoring of policy implementation tracks and analyses the implementation of policies and funding devoted to just transitions.
3. Transition Assistance Finance Strategies
Low-carbon transitions will add significant burdens on governments and public funds. Our just transition planning includes Transition Assistance Finance Strategies, sector-specific policies and financial mechanisms designed to mobilize development finance from international public sector and private investors.
Key aspects of our transition assistance finance work include:
- Recognizing costs and financial needs of the transition, taking into account the impacts on various actors and the corresponding needs for—and sources of—transition assistance finance.
- Design of effective and equitable financial mechanisms to channel development and commercial finance to those impacted by the transition.
- On-ground delivery of financial assistance to impacted stakeholders through capacity building efforts and extensive collaborations with relevant local implementing partners.
4. Effective, Inclusive Convening
None of the above work can be successfully implemented without bringing disparate groups together to provide input and expertise, create buy-in, and agree upon implementation. Leveraging our reputation as a neutral third party able to build bridges between policy, finance, civil society, and academic leaders at the international, national, and local level, CPI advances just transition strategies through:
- Stakeholder Mapping to identify the actors involved, their interests, and their influence.
- Convening local groups along with policy and finance decision makers to articulate and plan for the needs and interests of those most affected, develop shared standards, and reinforce action and ambition.
To learn more about CPI’s Just Transition work, contact any of our team members.
Vulnerability of Indian States to Energy Transition
Academics, think-tanks and policy-makers to date have focused on devising policy interventions required for just transitions. CPI is focusing on developing ‘Finance’ as the transition assistance (TA) tool. This blog introduces “Vulnerability Assessment” as a stepping stone to identify regions/states which would require this assistance.
Climate Finance in Indonesia: A landmark 2022 lays solid foundation for action in 2023
As Indonesia took up the mantle of G20 presidency, 2022 was a particularly momentous year filled with opportunities to examine the country’s climate finance landscape, improve the underpinning regulatory framework, and foster greater global cooperation on ensuring just energy transitions. Here is a reflection of progresses we have achieved in both sustainable finance and energy transition areas last year and a preview of what is underway for 2023.
Global Landscape of Renewable Energy Finance 2023
This third edition of the biannual joint report by IRENA and CPI analyses investment trends by technology, sector, region, source of finance and financial instrument in the period 2013-2020.
Smallholders in the Caatinga and the Cerrado: A Baseline Analysis for a Rural Just Transition in Brazil
CPI/PUC-Rio researchers tackle the concept of rural just transition in Brazil, providing a baseline of smallholders in two of Brazil’s most critical biomes: the Cerrado and the Caatinga.
Are Indonesian Banks Ready to Account Climate-related Matters?
Based on a focus group survey involving Indonesia’s major commercial banks, Climate Policy Initiative has analyzed the country’s financial sector readiness and progress in assessing, reporting, and disclosing climate-related matters against national guidelines and international best practices.
Gender-smart climate finance: Three things you need to know ahead of COP27
Women are disproportionately impacted by climate change and face greater exposure to disasters, economic losses, and health repercussions than men. Women also act as benefit multipliers, with the ability to improve the effectiveness of climate finance when it’s gender-smart but what does this mean?