Climate finance must foster a just transition in developing countries

Developing countries face the monumental task of tackling climate change while dealing with significant social and economic challenges. These include persistent poverty, inequality and energy access gaps, as well as degradation and loss of their natural resources.

Responses to the climate challenge may, if not carefully designed, introduce new hardships and deepen inequalities: workers might lose their jobs as polluting factories close down and new green businesses might open only in cities rather than rural areas. A just climate transition is thus about making sure that everyone affected can have their say, and no one is left behind.

It is also about the opportunity for decision-makers to use climate action to tackle the root causes of inequality and vulnerability, helping reduce resistance to change, and to deploy limited resources wisely to achieve broader sustainable development goals.

Our recent report on just transitions in the Global South summarizes findings from research partners in Argentina, Bangladesh, Colombia, Indonesia, Ghana, Kenya, Laos, Malawi and Viet Nam.

“Just transition” is now featuring more often in climate discussions in developing countries but among decision-makers, there is limited understanding of the equity issues a climate transition might create, and little planning to ensure these are being addressed.