Just transitions

Just transitions require investment in people and places alongside low-emission infrastructure. Workers, households and communities need skills, livelihoods, social protection and opportunities in changing economies, including beyond formal employment and energy. Governments and financiers are incorporating these concerns into national plans, but dedicated social investment and local delivery remain limited, while evidence of whether transition costs and benefits are being shared fairly is still scarce.

Status

Just transition is more prominent in national climate plans and international policy, but financing and delivery remain limited. Country partnerships and sustainable-finance frameworks are developing, yet support still concentrates on infrastructure while skills, social protection and local economic diversification receive relatively little. Participation by affected workers and communities remains uneven, particularly beyond formal employment and energy. Programs demonstrate emerging approaches to workforce training and local enterprise support, but available evidence is not sufficient to judge whether transitions are improving livelihoods or distributing costs and benefits fairly.

Scale

Magnitude relative to the need

Slow

Large just-energy-transition partnerships have announced sizable financing packages, but investment in the social dimensions of transitions remains small and fragmented. Partnerships in South Africa, Indonesia, Vietnam and Senegal have announced headline financing exceeding USD 50 billion combined, although this is not disbursed finance, and the packages have different structures and reporting dates, partly reflecting the 2025 U.S. withdrawal from three JETPs. Grants account for only about 1.5–4% of the initial financing packages assessed, while support for skills, social protection and local economic diversification remains insufficient (Selvaraju et al., 2025). Scaling these activities requires more predictable public spending, grants, and highly concessional finance.

Speed

Pace of reform against what's needed

Steady

Just transition considerations are spreading rapidly through national climate plans, but implementation is less advanced. Among 123 NDC 3.0 submissions assessed in 2025, 79% referenced just transition, up from 50% previously, and 28% included a dedicated section, up from 7% (ILO, 2025). However, only 26% identified resource allocations, up from 2%. COP30's decision to establish a Just Transition Mechanism and growing country-level partnerships are strengthening arrangements for support, while 83 countries requested assistance through the NDC Partnership. This reflects policy and institutional momentum, not comparable acceleration in financed programs reaching affected people.

Reach

How far it extends across countries and institutions

Stalled

Frameworks increasingly recognize affected workers, women, youth, Indigenous Peoples and communities, but inclusion in consultations does not guarantee influence over investment decisions or access to finance. In Indonesia and South Africa, less than 10% of JETP grants reportedly reached workers or communities directly (Selvaraju et al., 2025). Place-based support is emerging, including Türkiye's SOGREEN project targeting over 5,000 women- and youth-led MSMEs (World Bank, 2024d). Yet informal workers and communities beyond coal-dependent regions have few comparable mechanisms. Weak local capacity and inadequate direct financing and benefit-sharing arrangements constrain reach.

Action fronts

Climate finance reform advances on five fronts, from replenishing the funds that already exist to reshaping how the whole system works. These are the fronts where Just transitions is making headway.

Reshaping
Rebalancing
Replenishing

The Path Forward

Just transitions require dedicated investment in people and places alongside infrastructure. Affected workers and communities, including those beyond formal employment, need meaningful influence over decisions.

The next phase requires costed, country-led programs that link climate investment to employment, social protection and regional economic strategies. Because skills, social protection and local economic support often generate limited financial returns, governments and financing partners should expand predictable grants and concessional support, drawing on carbon pricing and fiscal reform revenues where appropriate, and progressively integrate these investments into domestic financing frameworks. Workers and affected communities need meaningful influence over investment decisions, with tenure, free, prior and informed consent, and benefit-sharing safeguards where relevant. Stronger subnational institutions and direct access to finance can extend support to informal workers and communities in agriculture, fisheries, forestry and other affected sectors. Just transition should be integrated into country platforms, transition plans, public spending and private finance, not treated as a separate project category. Monitoring should measure jobs, incomes, participation and distributional outcomes, not policies adopted or amounts pledged.