Managing Director & Partner
The transition to low-carbon energy has the potential to create massive economic opportunities and benefit individuals and communities across the globe. It could create 30 million jobs in clean tech sectors, eliminating millions of premature deaths each year caused by air pollution and delivering energy to nearly 800 million people who live without electricity. But if not managed properly, the energy transition could also bring high costs and inequities, often for the world’s most vulnerable populations.
We are in the grip of a complex energy trilemma—the need for a secure and reliable energy supply at an affordable cost with minimal environmental and socioeconomic repercussions—and it requires leaders to make difficult tradeoffs. The transition to a green economy will impact the livelihoods of at-risk communities and millions of people working in carbon-intensive industries. It is imperative that we adopt a human-centered approach so that no one is left behind.
No single actor can achieve a just energy transition. All stakeholders must cooperate to secure the future of workers and at-risk communities. In this article, we’ll highlight the challenges of achieving a just energy transition and offer several no-regret moves that companies, governments and regulators, investors and development finance institutions (DFIs), and NGOs and partnerships can make to protect those affected, maximize positive socioeconomic outcomes, and ensure that the costs and benefits are fairly distributed.
When leaders embark on a just energy transition, they are forced to reconcile a complex array of issues, including job losses, rising energy costs, availability of financing, and equal access to green energy. Here are some of the key obstacles that must be addressed:
Despite these challenges, leaders have an opportunity to build a sustainable, low-carbon, job-rich path to net zero without leaving anyone behind. Advancing just energy transition goals requires close collaboration across a complex ecosystem of actors. (See the exhibit.)
Here are some no-regret actions stakeholders can take to accelerate a fair and just energy transition.
Organizations have a crucial role to play in protecting the workforce, responsibly retiring carbon assets, catalyzing climate finance, and taking a leadership role in driving a just energy transition. Some important things they can do include the following:
Governments and regulators have an important role to play in a just transition. Actions they can take include the following:
Investors can embed just transition principles into investment criteria and lead the way to scale up climate financing, while national and international DFIs—including multilateral development banks—can help address inequities in global climate finance. More specifically, these players can do the following:
NGOs, development organizations, research institutes, and coalitions can do a lot to foster just transitions. Some examples include the following:
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