Many different organisations, including the European Commission, the United Nations and the International Labour Organization (ILO), have expressed a desire to ensure that decarbonisation involves a ‘just transition’. The organisations have often focused on the ‘workers’ rights’ element of the transition, without giving other aspects of a just transition the same level of consideration. In this article, we identify these other aspects and, in particular, we explain why current methods of funding decarbonisation are often ‘regressive’ rather than ‘progressive’. Intuitively, it would seem that a just transition aims to ensure that fundamental changes, such as decarbonisation, occur in a way that is ‘fair’ to all stakeholders (workers, consumers, businesses, investors, and the like). However, in the context of the climate transition, the term ‘just transition’ is often used in relation to the aim of ensuring that workers in sectors that will be significantly and adversely affected by decarbonisation (hereafter ‘affected sectors’), such as coal, gas and oil, are not ‘left behind’. While it is important for a just transition to mitigate the adjustment costs to workers and communities in the affected sectors, it is also important that the term becomes associated with a number of other ‘fairness’ challenges relating to decarbonisation.
Oxera 28th Sept 2021 read more »