Introduction to a Just Transition

The phrase ‘just transition’ is used a lot in climate activism and politics. Broadly, it means that as we move from an extractive linear to a sustainable circular economy, we make sure that:

1. We address and remove past injustice caused by environmental degradation
2. The new systems we put in place do not fall into the same traps
3. The move itself does minimal harm to the most vulnerable [1]

It’s easy to see ways we hold systems on both sides of a green transition up to social scrutiny, but how can the transition in-between make these mistakes?

For example, the Gilets Jaunes protests were caused by the French government’s planned further increase in energy tax (TICPE) on petrol and diesel to reduce carbon emissions [2]. This led to tensions between the city-dwelling ‘elite’ and the rural poor who needed to drive to work.

Similarly in 2019, Ecuador’s austerity package included a removal of fossil fuel subsidies, expected to save $1.4 billion a year. But straight away, gasoline prices shot up 25%. Amazon and Andes Indigenous groups, often seen as the most affected by extractive processes of the fossil fuel industry, were central to the ensuing protests, as the increase in prices of buses, cars, and tractors affected their rural lifestyles the most [8].

With policy tightening to match Paris Agreement targets, social impacts of the response may outweigh what it is trying to fix. Poorer populations – within countries and internationally, who are more vulnerable to climate change, are also most affected by poorly managed climate policy. A just transition is a one in which the welfare of people most affected by both climate change and countries’ response to it is kept core to all decisions.

For France, the IISD says the government must move $425 billion dollars it spends on subsidising fossil fuels to a funding for the transition [3], as a way to ‘give something back to the people’ while they reform. This has been done well in Canada, where the 2019 federal carbon tax of C$20/tCO2e is steadily increasing to C$50 in 2022 [4]. This currently amounts to a ~10% tax on gasoline [5][6], and is predicted to save 60 million tonnes of emissions in 2020. And yet by using the revenue to subsidise other taxes and emissions saving measures, households in all provinces will have a net gain from the tax. The average household in Alberta regain C$880 for the C$534 they pay in 2020 [4], and overall, ‘analysis has shown that low and middle-income households are better off under’ the previously standing British Colombia tax than they would be without it. [7]

This article introduces our Just Transition Series, which looks at a just transition within different key industries, including agriculture and energy,

[1] https://climatejusticealliance.org/just-transition/
[2] https://en.wikipedia.org/wiki/Yellow_vests_movement#Fuel_prices
[3] https://www.bruegel.org/2018/11/what-the-gilets-jaunes-movement-tells-us-about-environment-and-climate-policies/
[4] https://www.theglobeandmail.com/canada/article-canadas-carbon-tax-a-guide/
[5] https://www2.gov.bc.ca/gov/content/environment/climate-change/planning-and-action/carbon-tax
[6] https://www.globalpetrolprices.com/Canada/gasoline_prices/
[7] https://www.wri.org/blog/2018/12/carbon-price-can-benefit-poor-while-reducing-emissions
[8] https://www.iisd.org/library/lesson-ecuador-fossil-fuel-subsidies