The UK Parliament has launched an investor-backed inquiry to ensure a just transition to Net Zero, as the country’s development bank collaborates on ‘just transition finance roadmaps’ in South Africa and India.
The concept of a just transition – action to address the impact that decarbonisation will have on workers and communities in carbon-intensive sectors – is steadily climbing up the political and financial agenda, as countries bring in serious plans to achieve Net Zero.
While shifting to net zero has the potential to create jobs and drive economic growth, some workers and communities in industries such as Oil & Gas, risk being left behind.
It is a politically charged topic, with Texas senator Ted Cruz yesterday claiming that “President Biden indicates he’s more interested in the views of the citizens of Paris than in the jobs of the citizens of Pittsburgh (where energy is a key industry)”, following the announcement that the US would rejoin the Paris Climate Change Agreement.
The UK Parliament has this week launched an inquiry into a just transition led by the All Party Parliamentary Group for Local Authority Pensions. It will investigate how local authority pension funds, managing some £300bn, can ensure a just transition to net zero carbon emissions and what role the government can play in supporting all investors to do so. It will publish its findings ahead of the UN climate change conference, COP26, which will be held in Scotland in November.
The inquiry is chaired by Clive Betts MP and is being supported by the Local Authority Pension Fund Forum. It will hold virtual sessions till the summer and will be taking written evidence until 30th April 2021.
In related news, CDC Group, the UK’s development finance institution, has announced its involvement in an initiative to create ‘Just Transition Finance Roadmaps’ in South Africa and India.
The project, which also includes South Africa-based Trade and Industrial Policy Strategies and the National Business Initiative, will explore innovative financial instruments targeted at supporting projects in communities most impacted by the transition away from fossil fuels, where there is limited access to finance and social inclusion.
South Africa and India are two of the largest coal-dependent emerging economies in the world. Both economies' reliance on coal mining and coal-based energy production leaves related industries, workers and communities exposed to the risks posed by efforts to mitigate climate change.
The initiative will highlight where policy interventions can enable investments that support and finance inclusive growth by enhancing opportunities for creating jobs, gender equality and skills development to ensure that ‘no one is left behind’ on the path to a low-carbon future.
Amal-Lee Amin, Climate Change Director of CDC Group: "Ensuring a just transition is particularly essential in emerging economies where the devastating impact of climate change is most critically felt. Most of the focus has been on policy issues, but it's important to ensure that the financing community is ready to work with host communities and policymakers to make a just transition possible.”
Other countries with just transition initiatives include Germany, Canada and Poland.
Read more on RI’s coverage on the Just Transition.