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.
Indonesia’s JETP launched its Comprehensive Investment and Policy Plan (CIPP) on 21 November 2023. As CPI was heavily involved in the process, supporting both the JETP Secretariat’s overall editorial process and the Finance Working Group’s specific input to the CIPP, we are sharing key highlights from the document.
This report complements our recent Landscape of Climate Finance for Agrifood Systems publication by examining the climate finance going specifically to small-scale agrifood systems.
“Transition Finance: Supporting India’s Net-Zero Goals” delineates the importance of transition finance and explores innovative financial solutions that can facilitate India’s ambitious journey towards net-zero.
Indonesia must make a rapid transition to decarbonization while maintaining economic resilience. We outlined key considerations and steps to adopt transition finance into the next iteration of Indonesia green taxonomy.
The chapter evaluates the transition linked to financial risk and proposes a business diversification framework for the PSUs engaged primarily in the business of solid fossil mining (Coal India Limited) and conventional power generation (NTPC Limited). The business diversification framework considers technology maturity, market potential, and financial attractiveness to develop competing investment scenarios. This analysis is aimed at supporting medium to long-term business planning for the futureproofing of these PSUs.
This study presents a policy map for climate mitigation and adaptation in Brazilian agriculture, identifying the government agencies responsible for implementation and the presence of elements of social and economic justice within each policy.
What is the Climate Risk for Rural Producers in the Caatinga? Challenges for a Rural Just Transition
The study evaluates agricultural vulnerability to drought events in the Caatinga, analyzing the climatic risk to which rural producers in the region are exposed.
Our latest tracking of Indonesia power sector finance examines renewable energy capacity and financing gaps, as well as opportunities to better align the country’s power sector finance with its NZE 2060 commitment.