IRENA Publishes Report On Uniting Labor And Employers For A Fair Energy Transition

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The world is at a pivotal moment in its energy evolution, as nations and industries grapple with the imperative to transition to renewable-based energy systems. This monumental shift involves the active participation of governments, businesses, labor unions, and workers themselves. Their collective efforts not only accelerate the transition but also shape its trajectory. Central to the success of this monumental undertaking is an inclusive and participatory approach, where the voices of all stakeholders are heard and considered.


Labor Unions and Employers Unite for a Just Transition

This brief brings to light the perspectives of labor unions and employers on what constitutes a just transition and provides recommendations to help achieve their goals across diverse geographies and circumstances. It underscores the interconnected nature of the challenges at hand and the need for tailor-made, holistic policy frameworks adapted to local conditions.


Quality Over Quantity: A Labor Perspective

Labor unions emphasize the importance of job quality over quantity. Their focus is on ensuring that the jobs created during this transition offer fair wages, job security, and favorable working conditions.

Adapting Education and Training: Preparing for the Green Workforce

Preparing for a green economy of the future requires adjustments in education and training programs. These adaptations are necessary to meet the evolving needs of the workforce and foster greater diversity and inclusion.

The Vital Role of Adequate Financing

Adequate financing is a linchpin for a just transition. International cooperation, particularly in channelling public funds from developed to developing regions, is critical. This is especially pertinent when considering energy subsidy reform and carbon pricing policies essential for transitioning away from fossil fuels, which currently dominate 80% of the global energy supply.

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Energy Transition and its Societal Impacts

The energy transition extends beyond the realm of energy sources; it has broad-reaching societal impacts. Energy use and income inequality are inextricably linked. Reforming energy subsidies and implementing carbon pricing policies like taxation are crucial to achieve the goal of net-zero emissions by 2050, as outlined by the International Renewable Energy Agency (IRENA).

A Growing Green Workforce

While the challenges are significant, the promise of a low-carbon economy is compelling. The transition away from fossil fuels is expected to create new jobs in renewables, energy efficiency, the circular economy, and related sectors. Notably, the renewable energy sector’s workforce has steadily expanded in the past decade, even amid the economic disruptions caused by the pandemic.

Global Disparities in Renewable Energy Jobs

Presently, renewable energy jobs are concentrated in a few countries, with China taking a prominent lead. This global disparity underscores the need for international collaboration to ensure the equitable distribution of renewable energy’s benefits.

A Vision of the Future

According to IRENA’s World Energy Transitions Outlook of 2022, a 1.5°C-aligned energy transition could generate close to 85 million additional energy transition-related jobs by 2030. These opportunities would cater to individuals with a diverse range of skills and educational backgrounds, contingent upon the implementation of large-scale investments and appropriate policy frameworks.

Challenges Ahead

Despite the net gain of jobs in the renewable energy transition, significant temporal, spatial, sectoral, and educational misalignments are expected. For instance, the phase-out of coal could result in the loss of 12 million fossil fuel jobs, posing challenges for affected workers, communities, businesses, and investors.

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International Collaboration for Inclusive Energy Transition

More than 85% of global renewable energy investment in 2022 primarily benefited less than half of the world’s population. Tackling the climate crisis inclusively and achieving the development agenda by 2030 require international cooperation, including the flow of public funds from developed to developing regions. However, financing in 2020 was largely provided at market rates, disproportionately affecting vulnerable populations.

Addressing Structural Misalignments

International collaboration should address structural misalignments that have contributed to distributional challenges. These include overreliance on foreign currency and constraints on defining domestic development pathways.

The Role of Public Investment

Public investment plays a pivotal role in supporting just and inclusive transitions. It should provide necessary funding for industrial policy measures, regional revitalization, training and certification programs, comprehensive labor market measures, and social protection programs for those impacted by the transition. Public investment should guide and steer the transition, ensuring broad societal support and acceptance.

Equitable Distribution of Benefits

It is crucial to use funds and financial instruments judiciously to prevent undue concentration of benefits within specific industry players. These instruments should be designed to distribute benefits equitably across the economy.

The Role of Multilateral Development Banks

In 2021, multilateral development banks provided $82 billion in climate finance, with $51 billion allocated to low- and middle-income countries. Although clean energy received significant funding, any continued investment in fossil fuels undermines the goals of the Paris Agreement.

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Realizing the Vision of the Paris Agreement

As envisaged by the Paris Agreement, the energy transition aims to establish a low-emission, circular economy founded on sustainable energy sources by mid-century. It is imperative that provisions for a just transition are woven into climate, energy, socio-economic, and industrial policies.

Inclusion in Decision-Making

Efforts to create enabling conditions for social dialogue and the inclusion of workers and labor unions in discussions related to national decarbonization strategies are crucial. Such dialogue fosters a more equitable and well-informed approach to the transition.

In conclusion, the global transition to renewable-based energy systems is a monumental challenge and opportunity. An inclusive, adaptable, and adequately financed approach is pivotal to ensuring that this transition benefits all and leads to a more sustainable and equitable world. The journey ahead may be complex, but it is one that holds the promise of a brighter and more sustainable future for all.

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