Just transition

What is a "just transition"?
The EBRD's Just Transition Initiative
Partnerships supporting a just transition

A "just transition" seeks to ensure that the substantial benefits of a transition to a green economy are shared widely, while also supporting those who stand to lose economically – be they countries, regions, industries, communities, workers or consumers.

A just transition is an integral part of many of the global commitments adopted by countries. The Paris Agreement acknowledges “the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities” and highlights the importance of workers in responding to climate change.

The EBRD operates in some of the world’s most carbon-intensive economies, where fossil fuel industries play a key economic role. Many economies where we operate have high greenhouse gas emissions and rely heavily on coal, with more than one million jobs directly or indirectly linked to the sector. As economies transition to cleaner energy, workers and communities in these industries risk being left behind. Ensuring economic opportunities for affected regions is critical to maintaining social stability and accelerating climate action.

The EBRD’s Just Transition Initiative (JTI) was launched in 2020 with the aim of ensuring that the benefits of the green transition are shared while preventing vulnerable countries, people and regions from falling behind. The initiative combines strategic priorities in relation to the green economy and inclusion, being guided by the Bank’s Green Economy Transition approach and its equality of opportunity strategy. The Bank helps its economies of operations to achieve a just transition by harnessing the power of the private sector to accelerate the transition towards sustainable and inclusive market economies. The initiative helps to ensure societal buy-in for accelerated decarbonisation via a stakeholder engagement process and targeted support across three pillars:

green transition – helping clients to move away from high-carbon activities through investment in clean energy, land rehabilitation and transition planning
human capital development – supporting the development of skills, reskilling and entrepreneurship to create alternative job opportunities, as well as boosting entrepreneurship within the context of addressing underlying drivers of inequality
regional economic diversification – promoting investment in new industries, sustainable infrastructure and competitive businesses to strengthen local economies.

The EBRD implements this approach through policy support and targeted investments. We help governments to prepare just transition diagnostics and action plans, which analyse the effects that accelerated decarbonisation scenarios have on carbon-intensive regions, labour markets and people, as well as identifying new investment opportunities (including in relation to economic diversification). We also help governments to integrate just transition considerations into key climate strategies such as nationally determined contributions and long-term strategies.

The EBRD finances projects that support just transition activities. For example, in North Macedonia, the EBRD is funding a solar energy project on the site of a former coal mine while supporting labour market initiatives to assist affected workers. In Poland, meanwhile, the Bank has invested in a bond issued by Tauron Polska Energia, the largest electricity distributor in the country, to support the development of the distribution grid and renewable energy. As part of this project, we are supporting the company’s decarbonisation strategy and, importantly, the reskilling of workers in the heavily coal-dependent region of Silesia.

Just transition is also an integral part of the country sector platform approach. This country-led approach coordinates all relevant stakeholders, including civil society and affected workers, to ensure buy-in for decarbonisation activities. It also channels donor funding and public finance towards just transition activities, such as programmes redeploying and reskilling workers.

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Just Transition Initiative

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Insights from historical cases of transition

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Strategic partnerships are critical for the successful development of the EBRD’s Just Transition Initiative. We work with other multilateral development banks (MDBs), international organisations, civil society and donors to this end.

The Bank actively supports the EU’s Just Transition Mechanism, which is aiming to mobilise
€150 billion to assist the regions that are most affected by decarbonisation. The Bank works with EU countries to help design and implement territorial just transition plans.

Beyond the EU, the EBRD plays a key role in the Coal Regions in Transition in the Western Balkans and Ukraine initiative, which aims to provide knowledge sharing, technical assistance and financing to coal regions.

The Bank also works with other MDBs to build an understanding of what a just transition is in different contexts, identifying the MDB policies, instruments and partnerships that can help to support it. In 2021, MDBs agreed high-level principles on just transition, which articulate how MDBs will seek to foster such a transition.

Key material

MDB Just Transition High-Level Principles

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MDB support for a just transition

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