Developing and Implementing Just Transition Policies
Following the transformational pathways to limit global warming to 1.5°C requires economy-wide transitions that may disrupt livelihoods, particularly those of workers and communities with high-carbon economies. As societies move toward zero-emissions targets, policy makers, businesses, and the broader climate community have an obligation to ensure the well-being of communities disproportionately affected by these changes; to provide safety nets for workers, create decent green jobs, and include communities historically marginalized by the high-carbon economy in conversations on transition plans. This essay lays out the elements of just transition policy action, barriers to implementing these policies, and a set of procedural principles for enacting them, applicable in a variety of socioeconomic situations. It also elucidates why the development of long-term climate strategies is exactly the right context to begin thinking about and planning for just transition. This essay draws on recommendations from experts—gathered for a high level conversation hosted by the Stanley Foundation in October 2017—for developing an international policy agenda on just transition.1 Not all of these recommendations are applicable in every circumstance. Notably, certain recommendations are more pertinent to social and economic situations in the Global North.
The Elements of a Just Transition
With the codification of the concept of “just transition” in the Paris Agreement and the Guidelines for a Just Transition (2015) negotiated by the International Labour Organization (ILO),2 the international policy community has noted the importance of this issue. This recent rise of just transition originates in part from practical challenges to increasing climate action. Climate change mitigation efforts, such as coal phaseout, have at times confronted opposition rooted in the concerns of workers and communities, particularly when transition policies are narrow-sighted or unable to convey what future livelihoods will look like for workers. But, while the topic of just transition is relatively new in international climate policy, it has been at the center of grassroots movements for decades, including labor movements and environmental justice campaigns concerned with creating better futures for workers and marginalized people. And though just transition is enjoying renewed attention, at least in part because it addresses climate action externalities, its success has required years of advocacy built by grassroots movements, for whom just transition has been not a pragmatic solution to policy issues but the impetus for social change in response to injustice.
Though there may not be complete agreement over the definition of “just transition”—as a fundamental element of achieving social justice or a climate action imperative—there is significant common understanding on a set of procedural principles and policy actions for implementing just transition policies. The following general procedural principles can help guide policy makers in developing long-term climate strategies:
- Taking stock: Policy makers and stakeholders must take stock of communities that will be affected by transitions and communities where transitions are required to achieve social justice. They must work to build inclusive conversations with these communities as they engage stakeholders in the development of long-term strategies. They should also plan to include communities early when developing mitigation pathways and actions to ensure that groups are not left out at key stages and are able to raise important issues.
- Providing a seat at the table: Affected communities must be involved in transition discussions and included early enough to determine the structure of conversations to include issues of social justice. Inclusive dialogue is necessary to ensure that the concerns and needs of affected communities are fully understood and addressed.
- Ensuring social protections: Social protections, such as skills training and early retirement, must be planned for and put in place to ensure social equity for affected communities. Long-term strategies should plan for the social protections required to complement mitigation efforts.
- Creating funds for just transition: Funds must be provided to support the redevelopment of affected communities. Advocating for the transfer of funding from industry subsidies to transition funds is an important starting point for most communities and should be considered in long-term strategies.
The vision entailed by long-term strategies complements the foresight required to plan smooth transitions with complex social adjustments. Time is often one of the primary constraints to ensuring that transitions are socially just. Not only is time needed to raise funds and develop programs for skills training and relocation, but conceptually, a longer time horizon gives societies and policy makers a certain distance and comfort to envision new livelihoods and transitions. Unfortunately, for some transitions already under way, policy makers do not have the luxury of time. But developing long-term strategies now, even for transitions already in process, will help ensure that adequate planning and resources are available.
When designing long-term strategies, policy makers must also consider what policy action looks like, from identifying where transitions will occur to ensuring that new jobs are decent. Just transition policies encompass policy actions such as the following:
- Anticipate and fund just transitions early, particularly in carbon-intensive industries. One major barrier to just transition is the upfront planning and cost required. While the long-term benefits are clear, issues emerge around who pays and how to incentivize initial funding. Governments will certainly have a role in funding transitions, but they must also work with businesses to help ensure transitions are just. In many cases, when the issue is addressed too late, companies in declining industries are financially unable to provide funding for transitions. Conversations should begin years, or even decades, in advance to ensure that funding is available when industries decline. Early preparation is also required to tackle complex issues, such as effectively converting fossil fuel subsidies into just transition funds.
- Plan for gaps in geography, timing, and skills with new jobs. Even with the best intentions, industry and governments cannot guarantee that a phased-out job will have an immediate replacement in the same location or at the same income level. Workers must also be prepared with the right skill sets to take on new jobs, and policy makers must understand that even for jobs within a similar field, skills may not transfer. Workers, communities, and historically marginalized people should have a seat at the table when discussing relocation, training, and safety nets like early retirement, as it is easy for decision makers to wrongly assume who will desire which options.
- Ensure that new jobs are decent, particularly in emerging green industries. The climate community has often overlooked whether new green jobs are decent, including whether they allow or enable unionization. In fact, ensuring that green industries outcompete carbon-intensive ones has, at times, meant keeping costs low to the detriment of worker pay, conditions, and benefits. As these new industries and markets emerge, now is the time to ensure the quality of the jobs they create, and the inclusiveness of these opportunities, particularly for people who are frequently economically marginalized or excluded.
Scaling Up Just Transition
Efforts to design and implement just transition policies at the national level often face the difficult task of building up from highly localized issues. The local dynamics and needs for transition will vary considerably from case to case. In order to scale up, stakeholders must examine which transitions are currently under way and where transitions are needed. National-level conversations will need to involve a variety of stakeholders, public authorities, and line ministries to adequately cover all aspects of the transition effectively and ensure that emerging needs can be addressed and financed.
While local planning for industry phaseout is important, policy makers must consider what is required for phaseout on a larger scale. Regional, national, and international effects require coordinated national plans and multilateral action. For example, worker pensions are often spread across multiemployer funds in order to limit risk, but as entire industries are consolidated and transition, pension funds can face catastrophic shortfalls with regional, national, and international effects. As policy makers begin to look at building just transition plans to accompany mitigation efforts, several key issues must be kept in mind:
- Taking stock of where transitions are occurring and facilitating peer learning. Developing best practices can help build communities that learn from one another while also identifying where further support is needed. Additional research and case studies will be important to understanding why some just transition polices have been successful, but a large number of case studies already exist and could be brought together, including in online platforms. Sharing experiences of successful transitions, as well as failed approaches to restructuring local economies, will speed the diffusion of insights and knowledge. Beyond providing lessons, policy makers should look to facilitate peer learning within and across sectors, as workers are often more receptive to messages from other workers and unions than from policy makers alone.
- Building just transition work early. In some economic areas, transitions are happening regardless of climate policy, such as the move from coal to clean energy in many countries. If these cases are not managed well, they will not only disrupt the lives of affected communities but also endanger future transitions in other sectors as communities lose confidence that just transition is possible. This may even extend beyond the realm of climate policy, to transitions occurring because of automation or digitalization, for instance.
- Creating a more just and equitable system. In areas like energy, this can mean creating equitable access to energy and a communal stake in how new energy systems work. For instance, in Germany, new laws allow citizens to pool resources and create energy cooperatives where they share ownership of their energy supply. Ensuring equality will increase buy-in for transitions from the broader public.
- Including a broad set of public authorities and line ministries, such as labor, health, and finance. A more holistic approach will be key to ensuring that a variety of issues are accounted for, including those that may not always be on the radar or in the remit of an environment minister. Connections to areas outside of environment ministries may also help tap other resources for transitions, such as regional development funds.
Getting the world on track to limit global warming to 1.5°C requires urgent action, and as industries such as coal decline, the just transition conversation must begin now. If early transitions are unjust, climate action allies in communities like labor will be lost and future transitions put at risk. The ILO’s Guidelines on Just Transition offer a starting point for discussions and have already taken on the difficult task of creating consensus across employers, governments, and workers.
Policy makers should begin developing “top-shelf” ideas, ones that can be readily implemented when social and economic changes emerge. Building just transition into long-term strategies is an excellent place to begin planning and ensures that mitigation plans will not have to confront major social problems in the future. In fact, through just transition the climate community can offer formative ideas to publics anxious about even larger economic changes, including job loss from automation and digitalization. The role and responsibility of the climate community in this broader context requires further examination, but with the scale of change required globally in the near future, just transition provides not only a set of policy tools to avoid social disruption but also an approach that can spark broader action and change to achieve a fair, just, and safe climate future.
1 This essay is based on a policy dialogue brief from a roundtable held by the Stanley Foundation at the 58th annual Strategy for Peace Conference titled “Setting an International Policy Agenda for Just Transitions.” The brief summarizes the primary findings of the conference as interpreted by the rapporteur, Mark Conway, the roundtable organizer, Rei Tang, and the chair, Sabrina Schulz. Additional information about the 58th annual Strategy for Peace Conference is available at https://www.stanleyfoundation.org/spc-2017.cfm.
2 International Labour Organization, Guidelines for a Just Transition towards Environmentally Sustainable Economies and Societies for All, 2015, https://www.ilo.org/global/topics/green-jobs/publications/WCMS_432859/lang--en/index.htm.