Towards a just transition

Institute for Policy Studies

Working Paper
November 2015. Draft. Do not quote without permission

Oscar Reyes
oscar@ips-dc.org

Contents
I. What is a Just Transition?......................................................................................................................................3
Challenges and Opportunities...................................................................................................................................5
Challenges............................................................................................................................................................5
Opportunities.......................................................................................................................................................5
II. The Economics of a Just Transition......................................................................................................................6
1. The limits of market-based climate policy......................................................................................................6
2. Financialization and the green economy......................................................................................................8
3. The trouble with transnational corporations..................................................................................................10
4. Can capitalism survive?.................................................................................................................................12
III. Constructing a Just Transition...........................................................................................................................14
1. Agents of change............................................................................................................................................14
2. Technologies of transition..............................................................................................................................16
3. Bringing the state back in..............................................................................................................................18
IV. Next Steps for a Just Transition: Five Takeaways.............................................................................................20
1. A Just Transition is about values and frames.................................................................................................20
2. An equity and rights framework....................................................................................................................21
3. Prioritize renewable energy...........................................................................................................................22
4. Reclaiming the state.......................................................................................................................................22
5. A new approach to investment.......................................................................................................................23

Last chance to save the planet! Failure is not an option! Make Hollande a climate hero! The UN
climate change conference in Paris (COP21) is being promoted in some quarters with the kind of
hyperbole that could make a used-car salesman blush. Yet the outcome is not difficult to predict: a
lowest-common denominator deal that falls a long way short of preventing dangerous climate
change, putting few if any obligations on the biggest polluters.
Progressive activists, NGOs, trade unions and possibly even a few climate negotiators will condemn
the deal as inadequate. Many of us will go further, mobilizing around the world and after the COP
to proclaim people power in the face of government inaction. But what's our story?
This briefing is a modest attempt to provide a narrative or, at least, some principles and a
framework that helps break the question of alternatives to stalled UN talks into manageable bites.
The Just Transition framework as discussed here has three aims:

Moving beyond the COP. The UN's consensus-based, intergovernmental process will never
yield an outcome that is adequate to the scale of the climate crisis. It frames climate
responses in terms of (quasi)scientific long-term targets while abstracting from real world
causes of climate change. Fossil fuels are barely mentioned. Negotiators often act according
to national interests that are a proxy for the interests of large, transnational corporations.
The language and solutions offered by communities already facing climate change impacts
are marginalised and ignored. Targets are announced that contradict the patterns of
infrastructure investments - something that also applies to rhetorically progressive
champions amongst the G77 group of developing countries. Official positions have only a
thin relation to democracy. The COP is a quintessential post-democratic space.1 By
contrast, a Just Transition focuses attention on the underlying factors that are already
changing our world: economic models, technological development and demographic
changes. And it opens the field for a far wider set of actors to be considered the principal
agents of change, according social movements, frontline communities and trade unions a
more central role than state-centric COP politics.

Changing energy systems. Its widely acknowledged in climate debates that we need to
move out of fossil fuels and into renewable energy, combined with massive efforts to make
our energy use more efficient. A goal of 100% renewables is often used as shorthand for this
shift. Its a laudable aim, but one that can only be achieved by rethinking how energy
networks function, how the benefits are distributed and, ultimately, what a society reliant on
renewables looks like. Past energy transitions (from biomass to coal and oil as the
predominant sources) have played a pivotal role in reorienting society moving
populations, shifting the possibilities of where and how goods are traded, and enabling
different industrial production methods.2 The coming transition will be no different and
requires a positive vision not least, because the renewables revolution is competing with
a series of more reactionary energy futures and climate scenarios that assume the increased

1 See Crouch, C. (2004) Post-Democracy Polity

2 See Smil, V. (2010) Energy Transitions: History, Requirements, Prospects Praeger
2

use of nuclear power, waste incineration, carbon capture and storage (CCS), geoengineering
or, simply, that allow for dangerous climate change, dispossessing a majority of the worlds
people while the rich few protect themselves behind gated communities and border fences.3
Ensuring access to energy for the 1.2 billion people in the world who still lack it, and the
many more facing energy poverty, are equally vital to achieving a just outcome.

Connecting labor, community and environmental struggles. The historic understanding

of Just Transition calls for bringing together the traditional labor movement and
environmental organizations. But how do we make sense of that in a world of increasingly
precarious, informal employment, non-union forms of worker organizing, and growing
recognition of grassroots economic and environmental justice movements?

In practice, achieving a Just Transition to a different economy isnt solely the preserve of climate
activists, and requires more than simply a change in our energy system.
I. What is a Just Transition?
It is important not to get too fixated on terminology, but the actions and words of social movements,
trade unions and community groups advocating a just transition are worth highlighting as a way
to situate our discussion.
The term Just Transition was first used in the United States in the late 1960s to show that workers
would benefit from reducing toxic pollutants in industry.4 Contrary to prevailing myths, proponents
of a Just Transition argued that protecting the environment need not mean job losses and could
actually benefit workers.
For political organizers, that meant embracing new alliances as in 1997, when the Just Transition
Alliance was formed in the US that brought together workers from polluting industries and
fenceline communities.5 In its arguments and in practice, the JTA showed that labor and the
environment need not be in tension, and that activists from both movements can learn from each
other.
The language of Just Transition has since spread to the labor movement internationally, with
proponents arguing for the centrality of labor to climate solutions, including compensating,
retraining and protecting those in sectors (such as coal mining) that are incompatible with a clean
economy.6
The newer definitions of a Just Transition tend to go beyond a narrow, reactive focus on the
3 See Buxton, N. and B. Hayes (2015) The Secure and the Dispossessed. Pluto Press
4 The term Just Transition was coined by Tony Mazzocchi of the Oil Chemical Atomic Workers International Union
(OCAW), a trade unionist who led efforts to enlist environmentalist support in striking against Shell in 1973. Their
action was an early example of labor and environmental movements joining together in support of workers health and
safety the initial framework within which early JT work was carried out.
5 Climate Justice Alliance (2015) System Change Not Climate Change: Organizing for a Just Transition
6 eg. Canadian Labour Congress. 2000. Just transition for workers during environmental change,
canadianlabour.ca/sites/default/files/pdfs/justransen.pdf
3

labor/environment (or climate) nexus. For example, Anabella Rosemberg of the International Trade
Union Confederation (ITUC) sees a set of common root causes underlying environmental and
social crises: an unregulated, consumption-oriented and socially unjust economic model.7 She
advocates for a Just Transition framework that packages together policy proposals addressed to
vulnerable workers and their communities. Those include active labor market plans that can identify
employment impacts of climate measures, but extend to include green investment, reformed
corporate governance and national planning for resource efficiency.8
Beyond specific policies, a Just Transition can be seen as the cornerstone of a broader narrative of
progressive economic change. That is even true of the labor movement, with the ITUC proposing
the following framing:
Climate is also our issue because addressing it implies recognizing the need for a huge
transformation in our societies, in our production and consumption systems, and therefore
also in jobs. And recognition alone is not sufficient. Leadership by the labor movement is
needed for transforming the system. Unless we fight for making this transformation work
for the people, ensuring a Just Transition towards a truly sustainable model, we will only see
superficial changes towards more inequality and environmental degradation.9
More recently, the US-based Climate Justice Alliance has campaigned for a Just Transition on terms
that seek to broaden its relevance beyond the organized labor movement. While the largest US labor
unions have formed a BlueGreen Alliance with some mainstream environmental organizations,10
CJA notes that the economic crisis in the US goes beyond unionized workers to encompass the 17
million unemployed and many more underemployed workers in low-wage jobs with poor
conditions and irregular hours. For that reason, CJA is built around grassroots organizing (in
particular, in communities of color) and new labor working alongside environmental groups. Its
analysis focuses on the shift from extreme energy to local living economies, which are modeled
around a series of goals that include zero waste, the promotion of regional food systems,
community-based renewable energy, public transportation, affordable and energy efficient housing,
and ecosystem restoration.11 Local ownership is a key pillar of the CJA vision too, such that it aims
to create structures that workers and local communities collectively control, and allow them to
make democratic decisions on how to run them. A series of six local pilots are underway that aim
to embody this vision.
This briefing will look at how to further develop this approach first, by examining the economic
opportunities for a Just Transition, then, by examining the agents, technologies and new economic
forms that could bring it about.
7 Rosemberg, A. (2010) Building a Just Transition: The linkages between climate change and employment,
International Journal of Labour Research vol 2. issue 2
8 Rosemberg, A, pp.146-148
9ITUC (2011) Climate change: an issue for workers & trade unions, ITUC Climate Change Workshop with South
African Trade Unions 2728 July
10http://www.bluegreenalliance.org/
11http://www.ourpowercampaign.org/campaign/
4

Challenges and Opportunities

Challenges
* Credibility gap. The key challenge facing a Just Transition is a significant credibility gap. The
term just transition emerged in reaction to a conception that labor's demands were incompatible
with environmental goods. Advocates of a Just Transition showed that this need not be the case, but
there is no room for complacency. As Timothy Mitchell points out in his book on Carbon
Democracy, energy transitions have often served to undermine the power of labor movements. In
recent years, coal mine closures in the US and Western Europe have generally served communities
poorly with transition proposals eschewed in favor of cheaper options and outright neglect. A
recent attempt to survey the field was unable to identify even a single successful example of a
sector-wide just transition.12
In short, advocates of a Just Transition face an uphill battle to convince organized labor,that moving
away from fossil fuels, industrial or agricultural practices incompatible with addressing climate
change can be of benefit to them. Building support will require developing convincing models,
listening to various sectors and communities needs, and organizing. But it may also require a
broader consideration of how, and by whom, a Just Transition might be led.
* Labor's weakness. Between 1980 and 2000, the global workforce doubled in size, largely as a
result of the collapse of Soviet Communism, China's move towards market capitalism, and the entry
of India into the global trade system.13 The increased supply of workers has helped to weaken the
bargaining power of organized labor (especially in North America and Europe), while at the same
time many of the industries that were at the core of labor organizing have relocated to countries
where independent union organizing is weak (or even prohibited).
Opportunities
* Global meta-trends. Transitions do not happen in a vacuum. This paper looks to identify
emerging opportunities for a just transition in the context of a highly unstable global economy, as
well as looking at how technological change could be driven in a socially just and ecologically
sustainable direction. As the impact of the globalization of labor markets starts to unwind, and the
share of working age people relative to the total population looks set to fall, organized labor could
become more powerful again globally, which could have a positive impact on reducing inequality.14
It is important to note, however, that the opportunities available in the cracks of the current
system could as easily be filled in by reactionary alternatives.
* Uniting movements beyond labor and environment. The objective of a Just Transition that
unites worker and environmental demands dovetails with various other transition initiatives.
Transition town initiatives in Europe have advanced working models of community resilience
12T. Mller, Rosa Luxemburg Stiftung. Personal communication, 26 October 2015
13 http://www.irp.wisc.edu/publications/focus/pdfs/foc261.pdf
14http://www.bloomberg.com/news/articles/2015-09-28/the-three-major-trends-that-shaped-the-global-economy-fordecades-are-about-to-change
5

(although these have tended to address inequality and workers' interests poorly).15 More
promisingly, the CJA shows how grassroots community organizing can overcome the limits of
organized labor in a context where large numbers of people are unemployed and underemployed. It
fuses a Just Transition narrative into the work of environmental justice movements, which sprang
up to counter racism in the form of disproportionate distribution of toxic waste, water and air
pollution and other public health and environmental hazards.16 As we shall see below, a number of
other movements and organizations are engaged in related work to forge a sustainable transition
away from the current economic model.
II. The Economics of a Just Transition
What are we transitioning to? As we saw above, a Just Transition requires some fundamental
changes in our economic model. For about the past 30 years, industrialized countries have exported
market liberalism (neoliberalism) as the global norm. In climate policy circles, the predominant
approach is to encourage carbon pricing in the hope that markets might better cost climate damage
and so incentivize a transition to a low-carbon economy. But that policy focus, and the story
underlying it, faces a series of challenges. The hegemony of markets in climate policy flies in the
face of evidence that state support and subsidies are more effective drivers of transition. Digging
deeper, the financialization of the economy can be interpreted as the exhaustion of a long wave of
economic activity that is now reaching its end. The future is not yet written, but a genuinely green
economy will not emerge from efforts to commodify ecosystems and enlarge existing markets.
Instead, it requires a step away from today's model that puts transnational corporations in the
driving seat.More fundamentally still, we shall see how todays information technologies pose
fundamental questions about the laws of supply and demand that underpin how capitalism functions
and it is by no means clear that it can survive. Opportunities for a more just transition open up at
each of these levels of economic and policy change.
1. The limits of market-based climate policy
The assumption underlying much of contemporary climate policy, as laid out in the influential Stern
Review on The Economics of Climate Change, is that climate change is the greatest market failure
that the world has ever seen.17 That sounds dramatic, but it simply acknowledges that markets have
not put a value on the emissions of greenhouse gases that cause climate change. The corresponding
diagnosis is that a price should be put on carbon, either through taxation or a system of emissions
trading. According to the theory, if that carbon price is sufficiently high then it will change
investors' behavior. At present, in many places it remains cheapest to generate electricity by burning
coal (when comparing the levelized cost of electricity). Pricing pollution should mean that coal
prices rise and if they rise or are projected to rise high enough, then other forms of electricity
generation, such as gas or solar power, could out-compete coal.
Reality is rather more messy than economic theory, however. For all the glossy reports advocating
15 https://www.transitionnetwork.org/. For a critique along these lines, see Trapese (2009).
16 Cole, L. and S. Foster (2001) From the Ground Up: Environmental Racism and the Rise of the Environmental
Justice Movement, New York University Press
17 Stern, N. (2007) The Economics of Climate Change, Cambridge Univesrity Press
6

an adequate carbon price, it has proven stubbornly difficult to achieve. Carbon taxes have had a
limited effect, although they are generally set too low to make a transformative difference.18
Emissions trading (pushed in cases where taxes prove politically impossible, such as the EU) has
fared worse.19 A new commodity (carbon permits, a proxy for all greenhouse gases) is invented by
a state or group of states, but it refuses to sit down, shut up, and behave like a proper
commodity.20 Whoever creates carbon permits at the same time determines the supply-side of the
market and is subject to massive lobbying by both corporations and (in the case of the EU)
governments acting in the interest of certain sectors. The result is an emissions trading system that
keeps carbon prices low, offering subsidies to polluters in the process.21
Carbon trading is not only ineffective, but deeply unjust. Private electricity companies have used
the emissions trading excuse to hike prices beyond what pollution permits actually cost them,
profiting at the expense of ordinary citizens. Carbon taxes can be similarly regressive, placing the
greatest share of the burden on the poorest people.22
While recent developments in energy markets, notably the rapid fall in the price of solar panels,
could be cited as evidence of a market-based transition, they actually show the opposite. Public
policy and public investment, rather than free markets, are the lead factors behind the rapidly falling
price of solar PV (and, to a lesser extent, wind energy). State-owned banks in China provided
concessional loans to factories producing solar panels, spurring a price collapse.23
At the same time, various forms of feed-in tariffs have opened the space for renewable energy to
expand its share within established electricity markets. Neoliberal policymakers warn against these
measures as market-distorting, but they have succeeded where market-based approaches have
failed. In these initiatives lie the seeds of a different approach to achieving a low-carbon
economy, as even some proponents of carbon pricing and trading now admit.24 Public policy and
public expenditure (from state and municipal budgets) are a key part of this alternative approach
notably, investment in public infrastructure, public institutions and more democratic decisionmaking, research and development, and shifting subsidies from fossil fuels to renewables.
Proactive state investment policies have made significant headway in some countries, but are
challenged by austerity and a public policy that emphasizes and encourages financial sector
investment rather than cultivating public projects directly.

18They are also misaligned see http://www.oecd.org/tax/taxing-energy-use-2015-9789264232334-en.htm

19 For example, although emissions covered in sectors covered by the EU ETS decreased, emissions trading was not
the cause. See Gloaguen, O and Alberola, E. (2013) Assessing the factors behind CO2 emissions changes over the
phases 1 and 2 of the EU ETS: an econometric analysis (No. Working Paper No, 2013-15). CDC Climat,
http://www.cdcclimat.com/IMG/pdf/1310_cdc_climat_r_wp_1315_assessing_the_factors_behing_co2_emissions_chan
ges.pdf
20 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2201049 ;
21http://www.academia.edu/8762087/On_climate_rent ; my piece in Niclas book
22 For more on this point, see Reyes, O. (2014) Life Beyond Emissions Trading, http://corporateeurope.org/climateand-energy/2014/01/life-beyond-emissions-trading
23http://www.cstep.in/uploads/default/files/publications/stuff/dc6ff09f580c30a0a6fc0d1a90ed813f.pdf
24 New climate economy, p.13
7

2. Financialization and the green economy

The 2008 economic crisis in industrialized countries, and the continued fallout from that, sheds light
on the possibilities for some kind of green new deal and the limits that could face. The financial
sector bailouts amounted to a huge socialization of private sector loses which, in many
industrialized countries, has sharply increased the debt burden of the state. Seizing that opportunity,
neoliberal governments and institutions have declared war on precisely the kind of state investments
and renewables subsidies that we just observed as leading drivers of a low-carbon transition within
the market system. Without diving too deep into the question, there is good reason to think that
austerity is not a temporary response but part of a long-term political project aimed at global
rebalancing. It serves as an opportunity to further drive down wages and make labor conditions
more flexible (making it easier to fire people) in industrialized countries, until they meet those of
the middle class in China and India on the way up.25
Todays economy as a whole has become ever more financialized, a catch-all term for a multitude
of sins.26 Over the past 30 years or so, many advanced economies have seen profit rates accelerate
while physical investment has slowed.27 Declining rates of profit through trade and commodity
production mean that profits accrue primarily through financial channels,28 while some firms have
even abandoned the real economy in search of financial sector profits.29 Speculating to
accumulate, while pushing down wages, is at the center of how these financialized firms do
business contributing to a system in which ordinary people become ever more financially
vulnerable.30 At the same time, environmental problems have been recast in terms of financial
solutions, through the creation of natural commodities and attempts to place value on ecosystem
services.31
The future prospects for further financialization are decidedly mixed, however. The banking
sector used the 2008 crisis to consolidate, strengthening the position of the remaining too big to
fail banks.32 The shadow banking system a US$137 trillion web of interconnected bets and trades
between pension funds, insurers and hedge funds, has also grown considerably since the 2008 crash
that it was largely responsible for causing.33 But the crossover with the real economy may be
starting to unwind. Commodities prices have tanked (led by falls in the oil price), and specialist
trading firms are in trouble.34 Attempts at trading environmental commodities are also struggling.
25 Mason, P. (2015) PostCapitalism: A Guide to Our Future, Penguin p.5
26 Stockhammer, 2010, Financialization and the Global Economy Umass Working paper, p.2 . The term has been used
to encompass phenomena as diverse as shareholder value orientation, increasing household debt, changes in attitudes of
individuals, increasing incomes from financial activities, increasing frequency of financial crises, and increasing
international capital mobility.
27 As observed by e.g. Krippner, (2005) The Financialization of the American Economy, Socio-Economic Review 3,
p 174Dumenil, G. and D. Levy. 2005. Costs and Benefits of Neoliberalism in Epstein, G. (ed.), Financialization and
the World Economy Edward Elgar.
28 Krippner (2005), p.174
29Epstein, (2005), p.7
30http://blogs.lse.ac.uk/politicsandpolicy/financialisation-makes-income-distribution-more-unequal/
31Kill, J. (2014) Economic Valuation of nature: the price to pay for conservation? Rosa Luxemburg Stiftung
32http://fortune.com/2013/09/13/by-every-measure-the-big-banks-are-bigger/
33http://www.financialstabilityboard.org/wp-content/uploads/global-shadow-banking-monitoring-report-2015.pdf
34http://www.smh.com.au/business/mining-and-resources/are-mysterious-commodities-traders-like-glencore-andnoble-too-big-to-fail-20151001-gjzk97.html
8

Emissions trading markets have undergone a three year depression that has seen many firms
withdraw altogether,35 while attempts to create a forest carbon market are stuck in perpetual pilot
mode.
Several contingent factors are at play here including an overall lack of climate ambition
suppressing demand for carbon allowances, and Saudi attempts to flush out competition from
unconventional sources of oil. But there are deeper reasons, too, why an accumulation regime
based on financialization is unstable. Financial bubbles are nothing new, but tend to arise at the end
of a long wave of economic activity. When viable investment opportunities exhaust themselves,
financial capital forms a bubble and some form of economic collapse ensues.36 That, in turn,
provides an opportunity (although no guarantee) of renewal.
Viewed in these terms, the 2008 crisis and its aftermath can be seen as the end of a broader cycle of
economic activity concretely, an IT bubble that carried through into financial speculation.37 As
that system unwinds, a new wave of economic activity will emerge to take its place. The
development of a green economy, based on a renewed energy system that moves away from fossil
fuels, could well be what drives this next set of economic changes. But with investments in gas as a
bridge fuel, nuclear power and other competing proposals, there are no guarantees even that
renewable energy will be central to the next phase of economic activity. Efforts to embrace a new
economy, meanwhile, can reinforce existing business practices rather than encouraging change.
Indeed, the rhetoric of a green economy is dominated by efforts to make new green commodities
while preserving the status quo in the distribution of resources.38
In seeking a Just Transition, by contrast, we are asking for a new economy that shares the benefits
more equally, rolling back the ever-increasing inequality that is characteristic of todays system.39
To some extent, the choice of cleaner technologies already opens the door for more green jobs.
Extractive industries, such as coal, and the power supply chain that emerges around them tend to
have a far lower labor intensity than an alternative based on renewable energy and prioritizing
energy efficiency.40 In itself, though, that is not enough for a Just Transition, which emphasizes
reducing inequality, while valuing the agency and improving the rights of workers.
What this transition looks like in practice will, of course, vary markedly across different economic
sectors. As a general rule, strong labor organizing in defense of wages makes the profitability of
companies more dependent on innovation, and can force the hand of states into re-routing their
regulatory systems to provide greater incentives for the pioneers of new innovations and leaders in
emerging markets like renewable energy.41 Such shifts are often accompanied by changes in private
35http://www.fern.org/book/trading-carbon/carbon-desk-closures
36 Perez 2013. "Financial bubbles, crises and the role of government in unleashing golden ages" In Pyka, A. and
Burghof, H.P. (eds.) (2013) Innovation and Finance. London: Routledge, Ch.2, pp. 11-25.
37 Perez 2013, p.9
38Unmssig, B, L. Fuhr and T Fatheuer, 9 theses on critizing the green economy,
http://www.boell.de/en/2015/11/16/9-thesen-zur-kritik-der-grunen-okonomie
39Piketty, T. (2014) Capital in the Twenty-First Century
40 Rosemberg, p.137; Greenpeace (2010) Energy [R]evolution, a sustainable world energy outlook , 3rd edition
41 Mason (2015), p.75
9

sector ownership, favoring greater diversity and smaller-scale ownership. This can result in greater
accountability to local needs, although this type of localization does not necessarily favor improved
conditions for workers.
In the case of renewable energy, the policies that have proven most successful in driving the
increased take up of renewables have offered price and purchase guarantees in the form of feed-in
tariffs, or prioritized public investment in innovation. For example, Germany has seen a remarkable
expansion of renewable energy as part of its Energiewende (energy transition) where renewables
now account for over 40 percent of installed capacity for electricity generation and over a quarter of
all electricity supply.42 Over half of this renewable energy generating capacity is owned by private
individuals: 40 percent in the form of citizens cooperatives, and a further 10 percent owned by
farmers.43 Community ownership positively correlates with wider support for a renewables
transition, although it is worth noting that an important limitation in the German case is the passthrough of the additional costs of feed-in tariffs onto ordinary households while manufacturers were
exempted from paying their share.44
In the case of agriculture, meanwhile, there is a strong compatibility between the promotion of
small-scale farming and diversified ownership. In addition, this model provides more jobs.45 A
powerful food sovereignty movement exists to promote just such a people-centered transition. At
its heart lies a critique of the role of transnational corporations that might be generalized across
other economic sectors too.46
3. The trouble with transnational corporations
When it comes to avoiding dangerous climate change, transnational corporations (TNCs) are part of
the problem, not part of the solution. A Just Transition is one in which TNCs play a less central role
in our economy. As with all private companies, TNCs are primarily driven by the pursuit of profit.
When they occur, social justice and climate benefits are a byproduct rather than a goal of the private
sector, underscoring the importance of bolstering the public sector and the solidarity economy
(non-profit, community enterprises and cooperatives). That said, there are clearly some instances
where a profit motive lines up with the public good. For instance, making factories more energy
efficient saves money, so is good business and good for the climate. There are even ways in which
privately produced goods help contribute to a fairer society, as when mobile phone access helps
farmers in India or sub-Saharan Africa to avoid exploitative middlemen.47

42www.agora-energiewende.org/topics/the-energiewende/detail-view/article/trendwende-in-der-energiewende/ ;
http://www.ft.com/intl/cms/s/0/cc90455a-9654-11e4-a40b-00144feabdc0.html#axzz3sD9O2njq
43Buchan, D. (2012) The Energiewende Germanys gamble, Oxford Institute for Energy Studies, p.10,
http://www.oxfordenergy.org/wpcms/wp-content/uploads/2012/07/SP-26.pdf
44Mller, T. (2013) Personal Interview, 12 July
45http://www.quno.org/sites/default/files/resources/Realizing%20the%20right%20to%20food%20in%20an%20era
%20of%20climate%20change.pdf
46http://www.globaljustice.org.uk/sites/default/files/files/resources/agroecology-report-from-the-roots-up-webversion.pdf
47 See, for example, http://core.ac.uk/download/pdf/6689613.pdf - although there remains a live debate as to whether
mobile phones transform or reinforce information flows and asymmetries.
10

TNCs pose some particular problems, however. They avoid responsibility (and gain competitive
advantage) by means of tax evasion and avoidance, with trillions lost to the public purse through
transfer pricing to minimize taxes paid, taking wealth offshore, and other techniques.48 They then
lobby heavily to protect that system often through sympathetic governments. For example, during
the July 2015 United Nations summit on Financing for Development in Addis Ababa the
G77+China (a group of 134 developing countries) attempted to set up an international body to
coordinate on taxation and clamp down on tax avoidance by TNCs. These efforts were scuppered by
the US, UK and other members of the OECD (a grouping of developed countries).49
By systematically avoiding their tax obligations, TNCs undermine the ability of states to offer
public services, maintain a social safety net for the unemployed and underemployed, and promote
public investment. These are precisely the services workers and their families will need to make a
transition more fair.
TNCs also tend to be part of a broader trend towards financialization, which, as we have seen,
exacerbates inequality. Network analysis has shown that the leading TNCs form part of a close
network of mutually reinforcing interest,50 described by the sociologist Leslie Sklair as a
transnational capitalist class.51
There are, of course, differences between TNCs. Some, such as fossil fuel companies, have
wrecking the planet at the core of their business model.52 Attempts to change those corporations
(such as BP's flirtation with beyond petroleum) have fallen flat, to the extent that even some
staunch advocates of engaging with oil companies to improve them have given up on that strategy.53
At the other end of the spectrum, some of the large technology companies (eg. Apple, Google,
Microsoft), whose business models are relatively insulated from climate change impacts, have taken
green initiatives aimed at enhancing their branding, efficiency or resilience such as moving
towards renewables-powered data centers). But when these companies have channeled investments
into green technology often, via allied, non-profit foundations the results have aped the technooptimism of their backers, posing a risk to poorer peoples livelihoods. Their investment strategies
tend to be unaccountable and ungrounded, while tax avoidance remains an important motive for the
social activities of many of these initiatives.54
The problem is not individual TNCs, or particular sectors, as much as the concentration of
unaccountable power that an economy built around TNCs brings with it. That kind of concentration
48 Tax Justice Network, The cost of offshore revisited, http://www.taxjustice.net/topics/corporate-tax/taxingcorporations/
49http://www.theguardian.com/business/2015/aug/06/joseph-stiglitz-america-wrong-side-of-history;
http://www.taxjustice.net/2015/07/16/global-tax-body-after-3-days-of-bullying-developing-countries-were-run-over/
50Vitali, S., Glattfelder, J.B. and Battiston, S. (2011). The network of global corporate control. PLoS ONE, 6(10)
51Sklair, L. (2001), The transnational capitalist class Wiley-Blackwell
52Klein N. This Changes Everything.
53http://www.theguardian.com/environment/2015/jan/15/it-is-impossible-todays-big-oil-companies-adapt-climatechange-jonathon-porritt
54http://newint.org/features/2012/04/01/bill-gates-charitable-giving-ethics/ ;
https://www.dissentmagazine.org/article/plutocrats-at-work-how-big-philanthropy-undermines-democracy
11

is, ultimately, even damaging to creativity. The emerging corporate eco-system is built around
sectoral monopolies or oligopolies.55 A handful of TNCs might, to some extent, break this pattern.
Electric car producer Tesla, or wind turbine maker Vestas, are pursuing business models that
directly benefit from a transition away from fossil fuels and, in the case of Tesla in particular, are
involved in rethinking the sector they are engaged in from the ground up (free from the inertia that
besets most TNCs). Yet even here, we should be cautious. When Vestas closed its UK factory, for
example, it was quick to abandon workers rather than seek alternative investment strategies or act to
protect the longer-term future of low-carbon manufacturing.56
Don't be evil is a difficult motto to abide by under shareholder pressure, and the building of large
wind farms or the extraction of lithium (to provide storage capacity for electric cars) face the same
on-the-ground challenges as other development projects and extractive industries.
A Just Transition will require an economy where TNCs play a less central role. Some corporations
will collapse. Others will be pushed, by reformed regulations, to behave like different entities.
Some potential fixes can result from reforms in how markets function. Growing the share of
renewable energy upends the current wholesale market, making current corporate models unviable.
De-financializing the economy requires the breakup of some of the largest banks (eg. reinstating
Glass-Steagall in the US).
Other changes will happen at the level of global regulations, and there are signs of some change
afoot. For example, the Financial Stability Board to the G20 has started to discuss how to manage
climate risks and damp down holdings of stranded assets (unburnable reserves of fossil fuels).57 It
is likely that systemic changes of this sort will not be won through rethinking by corporations
themselves, as much as by social movement pressure.58
Tackling international corporate tax avoidance and evasion is vital, and well-argued mechanisms
have already been elaborated in some official spaces. The Independent Commission for the Reform
of International Corporate Taxation proposed one such fix in Addis Ababa, although it was
blocked.59 There exist many others.60 The key here is to break the power of TNCs to rig rules in
order to avoid paying their fair share into public coffers. Key to a transition is recuperating tax
revenue thats needed to fund public initiatives that can not be achieved through the pursuit of
profit.

55 Mason, P. (2015), p. 118

56http://www.ft.com/intl/cms/s/0/58bd790a-7615-11de-9e59-00144feabdc0.html#axzz3sD9O2njq
57http://www.bankofengland.co.uk/publications/Pages/speeches/2015/844.aspx
58 Ending the Oil Age
59http://www.icrict.org/wp-content/uploads/2015/06/ICRICT_Com-Rec-Report_ENG_v1.4.pdf
60 eg. http://www.taxjustice.net/2014/12/20/developing-countries-corporate-tax-ten-ways-forward/
12

4. Can capitalism survive?

Further opportunities for shifting from todays economic model lie in some more fundamental
challenges faced by the capitalist system in adapting to the changes ushered in by information
technology, which wreak havoc with the laws of supply and demand underlying markets.61
Markets work on the assumption that goods are in limited supply the more scarce something is,
the greater the price it can command. But information products don't play by these rules. For
example, music or movies shared digitally can be reproduced limitlessly with almost no additional
cost (dubbed zero cost production). Sure, companies continue to profit in these sectors but the
price of an iTunes track is only maintained by Apple's quasi-monopoly and copyright policing.
Information products are abundant, not scarce, and that breaks the rules according to which markets
allocate goods.
The significance of this break extends deep into the real economy because information
technology is rapidly changing how goods are manufactured, drawing ever more sectors into the
same dynamic of plunging production costs.62 As manufacturing becomes more automated and the
physical cost of producing each item falls, the value of goods increasingly resides in their
information content industrial software and the design of machines or, as in the case of Nike
sneakers, the marketing and brand management that surrounds them. That's an unsustainable basis
for making profits. And, by building walls to stop information flows, it's also an inefficient means to
increase overall economic productivity.
Here, once again, the example of energy markets is instructive. In Germany, a world leader in
renewable energy, the rise of wind and solar power which have close to zero production costs
once up and running has made it very difficult to profit from the sale of electricity in wholesale
markets.63 The big utilities, wedded to an outdated model of centralized fossil-fuel power
generation, have suffered huge losses and collapsing share prices as a result. In response, theyve
lobbied heavily (and with partial success) to water down Germanys ambitious energy transition
policy (Energiewende). But the companies themselves have also been forced into restructuring,
substantially moving out of power generation altogether in some cases.
With wholesale electricity markets in disarray and big plants mothballed, The Economist warned
that the loss of major utilities as electricity generators of last resort could lead to blackouts.64 But
there is another way. Instead of saving these firms, their disarray in the face of new market
conditions should be the occasion for taking them back into public ownership even if state
ownership remains the exception rather than the rule. If theres to be a revived role for the state, that
lies in creating regulations that encourage innovation to flourish (as economist Mariana Mazzucato
61Mason (2015)
62Mason (2015)
63http://www.orfonline.org/cms/sites/orfonline/modules/enm-analysis/ENM-ANALYSISDetail.html?
cmaid=81608&mmacmaid=81609
64http://www.economist.com/news/briefing/21587782-europes-electricity-providers-face-existential-threat-how-losehalf-trillion-euros
13

has argued) as well as coordinating and planning infrastructure.65

This is not socialism, so much as using the levers of the state to help transition to a new economy:
using regulation to promote a networked economy built around the cooperatives, the credit unions,
the peer-networks, the unmanaged enterprises and the parallel, subcultural economies that already
exist.66 These experiments are currently small-scale, but the beauty of networks is that dispersed
elements can grow rapidly in a modular way, without central planning.
III. Constructing a Just Transition
In the preceding section, we cut through several layers of instability in the current economic system.
There is no guarantee, of course, that a transition away from this system can reduce inequality,
improve conditions for workers or protect a livable planet let alone achieve all three. In this
section we look at some of the key elements that might be needed to bring about just such a
progressive change.
1. Agents of change
To change everything it takes everyone, according to a phrase popularized by Naomi Klein and
now taken up more widely within the climate movement. But how does such a general aspiration
map onto concrete strategies for bringing about change, and who would lead such a transformation?
According to Klein, climate change itself presents us with an important opportunity. There is a rich
populist history of winning big victories for social and economic justice in the midst of large-scale
crises, recalls Naomi Klein. In this lineage, climate change represents a historic opportunity for a
People's Shock, an opening for radical policies that not just address greenhouse gas emissions but
dramatically improve lives, close the gap between rich and poor, create huge numbers of good
jobs, and reinvigorate democracy from the ground up.67
Almost by definition, the call for a populist response to climate change cuts through the idea, long
prevalent on the political left, that workers' struggles are the core response to the injustices of
capitalism (which is not to say, of course, that they are unimportant).
In part, this has to do with changes in the balance of power between labor and capital, which have
made it increasingly difficult to envisage the transformation of the economy chiefly through
transforming the workplace. The advance of automation and the globalization of many product
markets (through a mix of technology and trade liberalisation), a relative global labor surplus
(especially post-1989) and neoliberal policies (especially trade agreements) have weakened unions'
bargaining power. In the US, labor faces an existential crisis.68
At the same time, the US has lost its status as the world's largest manufacturer to China, where
65 Mazzucato, M. (2013) The Entrepreneurial State: Debunking Public vs. Private Sector Myths, Anthem Press
66Mason, P. (2015)
67Klein, N, (2014), p.10
68https://www.jacobinmag.com/2013/02/sam-gindin-on-the-crisis-in-american-labor/
14

independent union organizing is difficult. That has weakened the impact of unions globally, leading
some to adopt a defensive strategy, allying with employers to place national protectionism or
weaker environmental standards over transformative change. United Auto Workers' long alliance
with the big car companies to oppose strong fuel economy standards offers one such example. The
United Steelworkers' push for the US to take on Chinese wind power subsidies is another.69
Within unions themselves, a Just Transition framing can offer a means to counter these protectionist
or anti-environmental tendencies and build new alliances. It also provides a narrative frame that
extends beyond green jobs to a wider vision of how to respond to the economic and climate
crises.
But as the road to economic change through labor organizing has been partially blocked, other paths
to change have opened up beyond the workplace, accompanied by new forms of political agency.
The movements that occupied squares in Spain and Egypt, or defied Islamism in Istanbuls Gezi
Park, are typical of today's networked social movements: sporadic, voluntary, time limited, radically
at odds with government and other sources of institutional power, and keen to forge sources of
counter-power out of a popular sense of disillusionment.70
The emergence of Occupy and similar movements globally poses a challenge for labor unions,
whose involvement in such actions is generally shunned (except at local level or through the
presence of grassroots unions). They are rarely focused on climate change, or broader
environmental crises such as biodiversity loss. But these mobilizations are a fertile terrain for
integrating responses to the climate crisis as part of a broader vision that critiques transnational
corporations and rejects the role of the market as the underlying principle in our society.71 Their
emergence is consistent, too, with a broader tradition of prefigurative politics that formed a key part
of the alterglobalization movement. They seek to build self-reliance and practice new forms of
democratic decision-making, rather than directly seeking power.72
A second tendency that could advance the Just Transition framing is the emergence of a roving
transnational conflict zone that is cropping up with increasing frequency and intensity wherever
extractive projects are attempting to dig and drill - dubbed Blockadia.73 Fenceline communities people living at sites of current or potential fossil fuel extraction and heavy industry - have long
been key actors in the fight for a Just Transition.
Blockadia is another incarnation of the type of fenceline struggles that called the Just Transition
69Costello, T. Labor and Climate Change, p.3, http://www.labor4sustainability.org/wpcontent/uploads/2010/01/laborandclimate.pdf; http://www.reuters.com/article/2010/12/22/us-usa-china-windpoweridUSTRE6BL3EU20101222
70 Mason, P. (2012) Why its still kicking off everywhere,
http://www.newleftproject.org/index.php/site/article_comments/why_its_still_kicking_off_everywhere
71Smart CSOs (2015), Reimagining activism, p.26-31, smartcsos.org/images/Documents/reimagining_activism_guide.pdf
72 Maeckelbergh, M. (2012) Doing is Believing: Prefiguration as Strategic Practice in the Alterglobalization
Movement, http://www.interfacejournal.net/wordpress/wp-content/uploads/2012/05/Interface-4-1-Maeckelbergh.pdf
73http://www.yesmagazine.org/planet/welcome-to-blockadia-enbridge-transcanada-tar-sands ; see also Klein, N.
(2014), chapter 9.
15

approach into existence in the first place. But while organized labor has occasionally been an ally,
more often than not Blockadia is characterized by fluid coalitions of environmental campaigners
and local citizens, often in rural communities. Environmental struggles have become closely
aligned, in many cases, with those of Indigenous Peoples claiming rights to their territory and selfdetermination .74
While this localization of environmental justice may seem a limiting factor, by connecting up
with broader claims for rights and territory it has the potential to create new alliances and cover
significant geographies. Meanwhile, the advent of hydraulic fracturing for gas (fracking) has seen
the frontlines of potential extraction (and resistance) expand rapidly, too.
The Climate Justice Alliance is an instance of how these approaches can come together. Networks
established at the frontlines of extreme energy are at the same time seeking to develop
experiments in worker owned and run cooperatives and local alternatives that build community
self-reliance and self-determination.75
But frontline social movements and Occupy-style movements are, ultimately, just one part of a far
broader ecosystem that could contribute to a Just Transition. The Real Economy Lab has identified
many other such tribes that, as well as those seeking radical departures, can include NGOs,
enterprise, academics and radical social movements.76 The important point here is not to assume that
one type of actor will be the agent of change, but to look for the points of intersection among a
multitude of actors although there will invariably be tensions to be worked out too. Many of the
recent movements have turned their back on making demands of national governments, expressing
suspicion at the role that states can play. As we shall see below, reclaiming the state as an agent of
transformative change is likely to be an important component of achieving a Just Transition.
Labor remains a key social force, but one that is at its most effective when embedded within
broader community struggles. The basic forms of labor organizing could come closer to the model
of connecting struggles that Just Transition proponents have advocated.
2. Technologies of transition
A Just Transition requires a technological revolution but such changes do not occur in a vacuum.
Innovations tend to come in clusters, forming technology systems that are marked by common
processes and feedback loops, equipment, and managerial forms. Carlota Perez, an influential
theorist of technological change, calls these shared assumptions a techno-economic paradigm.
When such a paradigm takes root, it has the capacity to go beyond the industries it creates and to
provide generic technologies that modernize the whole economic structure.77 In so doing, a
common set of assumptions emerges underlying management and investment decisions (changing
74 See, for example, http://reports.yesmagazine.org/unsurrendered/?
utm_content=buffer7928b&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
75Climate Justice Alliance (2015)
76 http://realeconomylab.org/#tribes
77 Perez (p.14) ; Freeman and Perez (1988) structural crises of adjustment,
http://www.carlotaperez.org/downloads/pubs/StructuralCrisesOfAdjustment.pdf
16

what seems viable), and even consumer choices (bringing to the fore new possibilities).
According to Perez, the current techno-economic paradigm was ushered in by the development of
the micro-processor, which not only created a popular market for computers, but revolutionized
production processes and trade flows, and fostered whole new sectors of economic activity based on
attempts to capture knowledge as capital. Companies could globalize production based on far more
flexible, real-time systems of tracking supply and demand making outsourcing easier and
weakening labor's bargaining power. The new paradigm had implications, too, for how companies
organized. As computers and then the internet took root, it became possible to develop more
complex, decentralized organizational networks.78 The same might be said for how social
movements organize with vast decentralized information flows creating the conditions to bypass
institutional media, and to organize without necessarily relying on union bureaucracies or political
party structures.
Once embedded, a techno-economic paradigm becomes hard to shift because it provides the
'common sense' for not only how we see production, and trade, but also the basis for financiers'
assessment of investment decisions. Such systems evolve over long waves, an initial surge of
development in one sphere giving way to a more gradual embedding of the new paradigm across the
whole economy. They end when viable investment opportunities exhaust themselves, financial
capital forms a bubble and some form of economic collapse ensues.79
According to these long-wave theories, a new wave of technological change is already considerably
overdue. But that has not happened for at least two reasons. An overall decline in public investment
(thanks to neoliberalism) is one. Corporate profiteering from the global availability of cheap labor,
acting as a disincentive to innovation, is another.80
The coming wave could take various forms, but the development of a green economy through
fundamental advances towards cleaner energy and transport systems is among them.81 Yet, as we
saw above, the people who run electricity grids and plan new power stations "didn't get the memo.
In a world of increasingly decentralized production networks, most large electricity companies are
still focused on highly centralized infrastructure, characterized by big fossil fuel power generation.
Stuck in the old paradigm of mass production, even their approach to clean energy is to think big
and static: nuclear power plants, large hydro and (when renewables are considered) vast off-shore
wind farms or huge solar arrays in deserts. This inertia is backed by significant lobbying to maintain
the status quo.82

78 Perez, C. (2002), p.18

79 Perez, C. (2013) Financial bubbles, crises and the role of government in unleashing golden ages" In Pyka, A. and
Burghof, H.P. (eds.) (2013) Innovation and Finance. London: Routledge, Ch.2, pp. 11-25 ; Perez's work owes some
debt to Soviet economist Nikolai Kondratiev's long wave theory of economic cycles; as well as Schumpeter's work on
business cycles
80Mason, P. (2015), p.72
81Perez, C. (2014)
82This argument is further elaborated in Reyes, O. (2015) Climate Change Inc. in Buxton, N. and B. Hayes (2015),
pp.63-84
17

Breakthrough technologies can increase demand on new sites of resource extraction, rather than
moving beyond extractivism. A renewables-based energy system is likely to require significant
storage capacity, for example. The technologies that are emerging require a significant uptake in
lithium extraction. That could drive new land grabs in Bolivia or Afghanistan, where such resources
are plentiful.83
Yet there are opportunities, too, opened up by shifts in technology. The dynamics unleashed by new
technologies, particularly in wholesale electricity markets, could break the stranglehold of a handful
of large corporations on this sector.
A new paradigm will not be determined by technology itself, or solely by entrepreneurs and (statefunded) innovators. To ensure that a new energy model emerges requires, among other things, the
kind of public research and investment that has already driven the emergence of new technologies
that could contribute to a transition. It also requires new forms of ownership and organization to
drive it forward.
3. Bringing the state back in
It is beyond the scope of this paper to join the dots that would give a full picture of the economy
that a Just Transition would bring about. But it is nevertheless possible to identify a few key
elements of what might come next.
One aspect is to recognize, and reinforce, the role that states could play in bringing about a Just
Transition away from an economy built around the extraction and burning of fossil fuels.
In the terrain of international climate politics, nation states are often encountered as parties to
international treaty negotiations like COP21. But their greatest influence, for good or ill, lies
elsewhere.
States currently subsidize fossil fuel companies to the tune of US$5.3 trillion annually. Discussions
to phase out these subsidies are advancing, in a reflection of the shifting balance of international
governance, via the G20 rather than the COP. Hoever, the statements of intent at these venues are
not yet matched by actions on the ground. If states were to phase out these payments (starting with
producer subsidies in industrialised countries) it would provide a boost for the competitiveness of
renewable energy.84
State-driven investment and changes in regulation have a key role to play. Directly regulating
greenhouse gas emissions from the power sector and industry, whether through emissions limits or
performance standards, can provide significant incentives for innovation. With sufficient stringency,
they block business-as-usual approaches, and can result in closures of old facilities, spurring the
deployment of new technologies.85
83Newell, P. and D. Mulvaney (2013) The Political Economy of the Just Transition The Geographical Journal, p.5
84http://www.imf.org/external/pubs/cat/longres.aspx?sk=42940.0
85Tornatzky, L. and M. Fleischer, The Processes of Technological Innovation; Driesen, D. Does Emissions Trading
Encourage Innovation, p.27
18

State investment, meanwhile, might take the form of building new infrastructure (which requires
strong safeguards against harming communities), and funding public interest research and
development. Public investment can help bring about significant technological breakthroughs.
Indeed, a look at many successful consumer products (like those underlying Apples iPad) shows
that they are based on technologies that were developed with public support.86 It should be noted,
though, that state investment stimulating new climate technologies is no guarantee that these will be
fairly distributed, that their impacts will reduce inequalities, or that they will be free from nonclimate environmental consequences.
But to engage state investment requires challenging the ideological dominance of austerity and
balanced budgets, which encourage infrastructure investment to be pushed off the public books
and long into the future by means of public-private partnerships. These schemes routinely deliver
poor value for taxpayers while, over the long term, they compromise the ability of states to invest in
projects that could help them adapt to the effects of climate change be those flood defences,
coastal protection or improved health systems.
Beyond this, states could play a stronger role in shaping and creating markets. Private companies
seeing returns on investment are inherently conservative, whereas the state as an economic agent
can invest resources in more radical ways and can create new markets. In the case of electric cars, to
take just one example, the relatively unforgiving geography of Norway has not been an impediment
to that country having the world's highest take up of electric cars (in proportion to the overall
private vehicle market). That was the result of the state building a network of charging points and
putting in place a series of incentives compared to petrol and diesel cars, including access to bus
lanes, free parking, exemptions from road tolls and ferry charges, and waiving value-added tax on
new electric vehicles.87
Reclaiming the public sphere is also vital in the case of the energy sector, and is already happening
in water services worldwide and, to a lesser extent, in the form of municipal energy grids (in
Germany in particular). Increasing public ownership, especially when that takes the form of remunicipalization, can help loosen the grip of the large corporate utilities that are delaying the
transformation of the energy system.88 That points the way to a second area where the
transformation of the state is closely linked to a more ambitious tackling of climate change and a
more just adaptation agenda. As we have seen, corporate lobbyists can set agendas and influence
rule-making on the environment, trade and broader economic policy. Tackling that means
democratizing the state (and regional blocs, notably the EU), through new rules to enhance
transparency and accountability, and to rein in trade and investment treaties that bias laws in favour
of corporate polluters rather than citizens.89 Various campaigns and proposals, including those
86 Mazzucato (2013), pp.16, 19; 81-101
87 https://www.toi.no/getfile.php?mmfileid=41187; https://pics.uvic.ca/sites/default/files/uploads/publications/Norway
%20EV%20Briefing%20Note%20October%202015.pdf
88 Whitfield, D. (2010) Global Auction of Public Assets: Public sector alternatives to the infrastructure market and
public private partnerships. Nottingham: Spokesman.
89See, for example: Alter-EU Steering Committee. (2010). A way forward, in H. Burley, W. Dinan, K. Haar, O.
Hoedeman and E. Wesselius, eds. Bursting the Brussels Bubble. Brussels: Alter-EU, pp. 1979.
19

promoted by the Global Campaign against Corporate Impunity, also exist that are pushing for legal
changes to hold transnational corporations and senior corporate leaders accountable for
environmental and human-rights abuses committed under their watch.90
Finally, states are not going to wither away any time soon, but their institutions could be used to
pro-actively support the transition to a new economy, encouraging (through subsidies and
regulations) the emergence of cooperatives, credit unions, peer-networks, etc. Given the space,
networks such as these could grow rapidly and organically.

IV. Next Steps for a Just Transition: Five Takeaways

1. A Just Transition is about values and frames

Talking about a Just Transition is a way to focus environmental campaigning on the values and
frames that are compatible with creating a more sustainable future economy. It encourages us to
examine closely how we produce and use knowledge about climate change, and what principles we
use in deciding how we act in response.91 Climate and environment NGOs have often sought to
promote responses that stress individual responsibility (turn off your lights), partnership with
corporations (cast as climate leaders) in developing free market fixes like carbon trading, and
pressure on intergovernmental institutions (the COP as a last chance to save the world).
Governments and corporations, in turn, stress technological solutions, like Carbon Capture and
Storage, that many working in the energy sector privately admit are economically and practically
unviable. Or they put forward non-committal ambitious sounding long-term goals (a
decarbonisation of the global economy over the course of this century),92 while making investment
and policy decisions in the here and now that move in the opposite direction. These tendencies all
reinforce a set of cognitive frames that can inhibit our ability to see the solutions to addressing
climate change.
A Just Transition frame, by contrast, emphasizes collective over individual action and, more
particularly, promotes participatory democracy the idea that we have the ability to decide on our
own future rather than leaving it to government elites or experts.93 The economic vision of a Just
Transition moves beyond the free market to stress, firstly, that markets are not free in the sense
their staunchest proponents claim (as Karl Polanyi points out, laissez faire was planned94).
Secondly, there exist various public goods that not only have value in their own right, but that are
important drivers of a Just Transition. That implies defending people's rights to access water, for
example (in the context of climate adaptation), but extends more broadly to public services that
secure our well-being, such as health and welfare systems. What counts as a public good should
90http://www.stopcorporateimpunity.org
91 See Darnton, A: and Kirk, M (2011) Finding Frames: New ways to engage the UK public in global poverty
92http://genius.com/G7-leaders-declaration-g7-summit-climate-section-annotated/
93Finding frames, p.84
94Polanyi, K. (2001 [1944]) The Great Transformation
20

also be determined democratically. Thirdly, and arguably most importantly, the coming economy
will not be based on scarcity, as in a market system, but will have sharing as a central aspect. This
does not mean that markets will collapse tomorrow, or that we should even aim for that. The point,
rather, is to encourage (and self-organize) the emergence of collaborative production in the spaces
left by the market system and expand from there. But it also poses a significant challenge: how can
a sharing economy be made compatible with a defense of workers rights, rather than exploiting
free or underpriced labor and circumventing regulations as Facebook, car-sharing service Uber, or
accommodation website AirBnB all do in different ways?
A Just Transition narrative, ultimately, seeks to reframe the climate change problem as a task of
rebuilding the economy from the ground up, with more democratic accountability. Based on this
perspective, it may then be used to develop policy frameworks at local, state and international
levels.
One potential objection to seeing Just Transition as being about the frames and values that define
our approach to climate change is that this could end up over-riding the history of the term as a
means to define organizing that connects labor and environmental movements. Seeing a Just
Transition as promoting a common framing and values is not intended to overlook this history.
Rather, it suggests that we can build stronger alliances by forging a common narrative on the values
that should be embedded in the next economic system. Viewing Just Transition that way up also
allows for a loosening of the definition away from just partnerships of labor and environment to
one that might be embraced by grassroots racial justice, housing and education activists, amongst
others.
2. An equity and rights framework
Tackling inequality is fundamental to achieving a Just Transition. Our current economic system
encourages ever-greater inequality, with wealth growing faster than incomes (as Picketty and others
show). That gives the wealthy disproportionate control over the political process. The same is true
of climate change, where the worst affected tend to be the least well off. International climate
negotiations bring out the worst of this, driving forward agreements proposed by the richest
countries (often lobbying on behalf of corporations), while the inter-governmental framing often
excludes access for the poor and most marginalized groups without countries (ignored or repressed
by governments).
If a Just Transition is about giving voice to the voiceless, it must start by turning the tables on an
economic system that promotes inequality not simply redistributing existing wealth, but
reorganizing the system through which wealth is produced. Tackling the power of transnational
corporations (TNCs) would be a good place to focus. Tax evasion and avoidance by TNCs strip
over US$100 billion per year of revenues from developing countries alone, undermining the
possibility of increased energy access, or the expansion of social safetynets.95 TNCs are also at the
forefront of lobbying to weaken international environmental legislation and labor standards.
95 http://www.theguardian.com/sustainable-business/2014/nov/03/developing-nations-lose-100bn-tax-revenue-g20reforms-avoidance; see also http://www.icrict.org/
21

Loosening their grip would provide more space for public interest advocacy.
3. Prioritize renewable energy
There will, by necessity, be numerous aspects of any Just Transition in agriculture, transport, or at
the level of how we produce and use consumer goods. But as a cross-cutting priority, a Just
Transition should focus on the transformation of our energy system.
This shift starts with divestment from fossil fuels. That frees up some capital to invest in renewables
and social enterprises, but the core of the divestment strategy is that it targets fossil fuel companies'
social license to operate (a bit like tobacco companies). That, in turn, creates the conditions for
better regulation that cut fossil fuel subsidies and incentivize renewables deployment.
A Just Transition goes beyond simply replacing fossil fuels. A shift to 100% renewables will
change the nature of electricity systems making them increasingly flexible and decentralized.96
That shift has implications outside of the energy sector, too, as part of a broader shift to a new
techno-economic paradigm that should see the re-localization of the economy around humanscale enterprises rooted more closely in the communities they serve.97
For a transition to renewable energy to become a Just Transition requires more than simply
installing new wind turbines or solar panels. It should, at the same time, work towards ensuring
energy access for the 1.2 billion people in the world who still lack that, and the many more people
who still live in energy poverty.
4. Reclaiming the state
National governments own the world's largest fossil fuel producers (Coal India, Saudi Aramco), and
are some of the world's largest investors in others. A key part of what a Just Transition needs to
achieve is to force states to divest from these assets and leave fossil fuels in the ground. What this
looks like, in practice, will vary greatly between places in Norway or California, for example,
pressure has been put on state-run pension funds to divest from fossil fuels and reinvest in
renewables and efficiency projects, with some success.98
Elsewhere, the push for a Just Transition could be pursued by the de-corporatization of state-owned
enterprises, restructuring them so that they are no longer held as joint-stock, partially privatised
companies on stock exchanges, and given instead a public-interest mandate that is reflected in their
investment priorities. In the case of public-energy companies, that means retooling them away from
extracting fossil fuels, or producing power from those fuels, and towards renewable energy
infrastructure in the process, breaking the increased interdependency between public and private
firms in the extractives sector.

96http://projects.exeter.ac.uk/igov/presentation-energy-policy-a-global-move-to-renewables-and-energy-efficiency/
97http://www.neweconomyworkinggroup.org/about-us/nine-action-clusters
98http://www.reuters.com/article/2015/09/02/us-california-divestiture-coalidUSKCN0R226A20150902#DvBU2mpATZ1BxAmq.97
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Divesting from fossil fuels and redirecting investment towards decentralized, renewable energy are
key pillars of such a transition.
5. A new approach to investment
Prioritizing investment in renewable energy for a Just Transition opens a debate on how investment
happens. Investing for the social good is incompatible with the tendency to prioritize short-term
gains, recognizing that companies should operate for the benefit not just of shareholders, but for
workers, their communities and the environment. Paying a living wage should be prioritized over
the goal of maximizing profits. Thats not just good for the individuals involved. It is the
cornerstone of a healthy economy where investments benefit communities rather than retreating
offshore to further concentrate wealth in the hands of the super-rich.
Investment in clean technology is a start, but is not enough if the way that the economy works is
not itself conceived differently. It can take various organizational forms, such as prioritizing Bcorps (benefit corporations), non-profits, or cooperatives. And it can include various forms of
investment, from smaller-scale crowdsourcing to larger investors adopting a patient capital
framework.99 The common thread, however, is that a Just Transition would prioritize seeing
economies as ecosystems, with the elements balanced to support strong, local living economies
that connect the production and trade in goods with the communities that could benefit from
them.100

99 See, for example, http://acumen.org/ideas/patient-capital/

100http://www.neweconomyworkinggroup.org/visions/local-living-economies
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