Working Through a Just Transition - APEC Economic Leaders' Week

This speech was delivered during the APEC Economic Leaders' Week: Creating a Resilient and Sustainable Future for All.

Congratulations to all involved on this first-ever focus on just transitions across APEC. There is no issue more important to your economies, industries, and businesses, and therefore to your workforces, communities, and to Mother Nature herself.

I’ve been asked to provide a bit of a scene setter on just transitions. What it is and why it’s important.
 

Climate vulnerability:

We should begin by acknowledging that we live in an overly carbonised world, but also a deeply unequal one, and these two things compound.

As the United Nations High Commissioner for Human Rights recently said, the dystopian climate future is already here. Globally, there has been a 134 per cent increase in climate-fueled, flood-related disasters between 2000-2023. We are currently living through the hottest year on record.

Those who have contributed the least to global emissions are often the most vulnerable to global warming and climate shocks:

• People in highly vulnerable areas are up to 15x more likely to die in floods, droughts, storms compared to those in more resilient areas.
• If unmitigated, climate change could push up to 130 million people into poverty within the next ten years.
• This will lead to mass displacement and migration, with the World Bank estimating that up to 216 million people could have to migrate internally by 2050.
• Heat stress alone is predicted to bring about productivity loss equivalent to 80 million jobs by 2030.
• With 1.6billion people already living food-insecure, climate change is projected to place another 80 million more people at risk of hunger by 2050.
• All this happening at a time when 4.1 billion people – 53% of the global population – are not covered by any form of social protection.
   

Speed and Scale:

As a global community, we know what we need to do. We must adapt to a changing climate to increase resilience, we must make rapid and deep cuts in GhG emissions, and we must rapidly expand clean energy deployment.

The challenge comes with the enormous speed and scale required to avoid the worst effects.

The IEA’s Net-Zero by 2050 Roadmap sets out the extraordinary growth in renewables uptake and infrastructure required by 2030 – just seven years from now:

• A four-fold increase in wind and solar deployment
• 18 times the number of electric car sales
• 3-6x the current level of climate investment
• All while reducing the energy intensity of GDP by 4% per year

The IPCC’s latest assessments affirm that technologies for achieving the deep cuts in global emissions by 2030 do exist today, already, but the pace and scale of climate action is currently insufficient.

Humanity needs the 2020s to be the decade of immediate and massive clean energy expansion.

Transition vulnerability:

But with great speed and scale also comes significant social risks to a wide range of people – if transitions are not rolled out well.

For workers, the ILO estimates that in the shift to a climate-neutral and circular economy 80million jobs will be lost. At the same time, 100million new jobs will be created. This highlights the varying ways employment can be impacted: (i) new jobs will be created; (ii) some jobs might be substituted; (iii) certain jobs will be eliminated; and (iv) almost all jobs will be transformed in some way.

Employment impacts will be unevenly distributed across the world, often concentrated in specific regions and communities. New job opportunities are not always created for the same workers and in the same locations, or not at the same time. Similarly, some industries will necessarily decline, while some sectors will grow, and others will radically transform, ushering in new ways of producing, working, consuming and living.

Indigenous groups are fighting right now for the same recognition as workers within the just transition discussion. They are overlooked both in terms of the impacts that can occur, but also the importance of their role in driving solutions.

Around half of the world’s land is governed by indigenous peoples, and this land contains around 80% of the world’s remaining biodiversity. One in three people on earth is dependent on these lands for their wellbeing and livelihood.

Despite the majority of these lands being managed sustainably and providing highly valuable ecosystem services, only 10% of indigenous land tenure is recognised under national law. Indigenous peoples receive just 1% of climate finance currently.

All this puts at least 290 GT of carbon stored in their collective lands at risk. That is equivalent to five times the total global emissions for 2021.

Environmental defenders, many of whom are indigenous peoples, also face intolerable risks as they champion sustainable solutions or raise concerns about harms associated with poorly planned transitions or irresponsible business operations. They are vital leaders of a just transition, yet trackers counted 177 killings of land and environmental defenders around the world last year, over 415 violent attacks, and also an increasing number of defenders subject to criminalisation as a silencing strategy.

Poor energy transition policies pose a particular risk of worsening social inequities via consumer impacts as well. Energy of course is an input in fertilizer production, food processing, transport, cooking, and heating. So the increasing cost of energy raises the price of meeting peoples’ food and other basic needs. Low-income households are impacted disproportionally, as food, transport and housing account for a large share of their overall expenditure, with the potential for this to push millions into poverty.

Double edged sword:

All of this is intended to paint a picture of the double-edged sword so many around the world are facing. They’re hit on the front end by climate shocks and disasters while unable or ill equipped to adapt. And they’re hit on the back end by poor transition policies that leave them out of the planning and left to grab onto whatever economic scraps remain.

As we near irreversible tipping points past our 1.5 degree threshold, a lot of policymakers around the world are paralysed, caught between short-term domestic economic pressures and long-term choices about future wellbeing.

Fear of the coming industrial disruptions is taking hold in many affected communities, and that is a very powerful motivator in decision making. If people feel left behind with no say over their future, that will drive social disruption, protests, boycotts, and it will slow climate action as a result.

Trust similarly is at an all-time low, especially between providers of climate finance – largely Global North countries and institutions – and the Global South, where the majority of this capital will need to be deployed.

That is very important to recognise as we all gather in this very nice room in California.
 

The answer is agency and accountability:

So what is the answer to this vicious cycle of the most vulnerable and least responsible getting hit by both climate shocks and green industrial change? It is certainly not to shut them out from planning and implementation processes. Do that at the peril of your timeline, your costs, and your reputation.

The antidote, perhaps counterintuitively when you first engage with it, is to give those affected a say in navigating the trade-offs. Build strong relationships with your workers, your communities, your diverse indigenous groups. Reflect this in your NDCs. Ensure your businesses and industries do the same in their corporate transition plans. Price this into every project; ensure that is properly valued.

Call this just transitions, call it green accountability, call it whatever you like, but at its heart is an approach to achieving transparent, inclusive, and representative decision-making across the lifecycle of the transition in question – whether that’s a very local industrial project or supply chain change, a green financial product or transaction, a whole city or even national transition. It is embedding the principles of being demand-driven (some call this being locally specific or place-based), transparent, market-building, responsive, and accessible in all levels of transition governance. 

The next panel will get much more into the HOW of this, as there are now many technical bodies, guides, and resources available. We at IHRB have contributed some of this ourselves, for example on corporate transition planning across energy, agriculture, and the built environment, the cross-cutting role of finance, and exploring emerging models like Just Energy Transition Partnerships (JETP).

What we and our partners have learned in this work so far is that Just transitions are 90% political, 10% technical.

Like with climate solutions, the social solutions are already available. We know what is needed. It is a matter of power, political will, and who has agency in the process. Because that is how transitions will ultimately be judged: by your workers, your indigenous groups, and your wider communities.

The benefits and business case are also clear. By meaningfully integrating those most affected in your planning and decision-making at the earliest stage, you will ensure better design of transition projects, which will lead to higher-quality, longer-lasting outcomes.

• Historic research into the costs of company-community conflict at hydrocarbon extraction sites found that such disruptions could cost a business: as much as $10,000/day during initial exploration; up to $50,000/day during advanced exploration; and as much as $20million/week during full operations.
• Conversely, new research into the economic value of green accountability could save more than $100 billion a year and avoid 3 GT of annual greenhouse gas emissions. This is because climate investments are deployed more effectively (better project design and implementation), more efficiently (avoiding mismanagement and unintended consequences), and more equitably (avoiding capture by vested interests and ensuring solutions are fit for purpose and catalytic).

2023 marks 75 years since the creation of the Universal Declaration of Human Rights. IHRB’s patron Mary Robinson, a former High Commissioner for Human Rights and fierce climate justice champion, often states that the climate crisis is the greatest threat to human rights of the 21st century. I would like to think that in another 75years, our children will look back and feel we did them justice. That we lived up to our responsibilities, did what had to be done, and brought people along with us.

We cannot make the same mistakes we made in oil, gas, and mining in the past. The just transition is a vision of a world in which climate action not only reduces carbon emissions, but also addresses inequality and exclusion; levels the economic and development playing field globally; and supports a participatory and transparent architecture that puts people at the heart of the climate agenda.

There is no downside to this system.

Thank you for the opportunity to participate in this important discussion. These sorts of multi-stakeholder fora for dialogue, collective action, and working in cooperation across public-private divides are vital to achieving just transitions. I look forward to learning from the panelists in the next discussion, and I welcome further engagement with you all.