Spotlight on Just Transition
With this year’s COP28 firmly in the sights of most countries and companies, net zero commitments, climate finance and how much money governments are putting up to fund the decarbonisation of sectors and economies is an increasingly hot topic. Just Energy Transitions (low-carbon transition that is fair, inclusive and creates decent work opportunities like those announced by India, South Africa, Vietnam, Senegal and Indonesia) have been front and centre of recent narratives, as have the funding announcements to support their associated Investment Plans.
However, in a global economic downturn, bold statements of commitment from developed countries already under pressure to keep their national budgets on track, may be met with less than enthusiasm by their citizens. Taxpayers, seeing their money being reallocated to support green economy building in other parts of the world, may believe those funds would be better spent sorting out the challenges at home. So, where does that leave Just Transitions or even the climate finance agenda?
Without access to appropriate levels of climate finance, how can developing countries hope to achieve the Just Energy Transitions that will see them mitigate climate risk and set their countries up to participate competitively in a decarbonised world? There is also the consideration of how you not only ensure impact, but also assure transparency, governance, and accountability – especially in some emerging markets that may not always have been able to deliver on commitments in the past.
COP28 is where we’ll need to see major progress when it comes to mobilising climate finance. Businesses and institutions that are attending will need to have a clear view of how finance can be made more available, affordable and accessible in order to be a credible part of the conversation. Solutions may include innovation in deal structuring to create an appetite for risk sharing; frameworks and policies that are relentlessly adhered to; assurance regarding transparently convened partnerships; effective consultation and public participation processes; and visible political will to see projects through.
These are critical elements upon which we must achieve consensus if we are to secure just energy transitions in our pursuit of global net zero. And, how we do so, will be key.