Implementing ‘just transition’ in India

Emanating from global discourse around worker welfare, the concept of ‘just transition’ has come to be associated with climate action, where it intends to transform energy systems from being fossil-dominated to environmentally cleaner forms by keeping the interests of vulnerable sections of society at the centre.

In the past few years, the concept of ‘just transition’ in India has often been mentioned in crucial policy documents, plans and agendas of government meetings. This is evident from the multiple developments that have happened in this sphere. In August 2022, ‘climate justice’ was emphasised as one of the key drivers of India’s updated Nationally Determined Contributions (NDCs).

In a welcome development, Ministries governing fossil-fuel sectors in the country have started working towards identifying ways and means to implement a just transition, a case in point being the Ministry of Coal and the Ministry of Petroleum, Oil and Natural Gas. Furthermore, state governments such as Jharkhand, which is one of the country’s most coal-dominated states, have established a taskforce to explore mechanisms to transition the state’s economy in a just and sustainable manner.

As these domestic developments signal a positive approach towards institutionalising ‘just transition’, the Government of India has been at the forefront of advocating for this on global platforms as well. As India donned the hat of the G-20 presidency, talks on mobilising finance to deliver on a clean energy transition gained traction.

At the same time, it has become increasingly pertinent to take into account the needs of workers, communities and consumers while transitioning from a fossil-based energy system to one based on renewable energy sources. This is evident from the discussions in the G-20 meetings of the Working Group on Labour (the L20) and Civil Society (the C20), in particular.

The previous article in this series explored the conceptual underpinnings of the theory of just transition. This article explores the framework and methodological considerations involved in institutionalising just transition in the Indian context, essentially answering the question, “How do we go about implementing it?”

Although the principles that guide methodologies and frameworks for institutionalising just transition are universal, the principle of ‘one-size-fits-all’ does not apply in this case. Contextual realities and differences necessitate a situation-specific assessment and understanding of how one can go about understanding and implementing ‘just transition’.

To achieve the objectives of ‘just transition’, mindset shifts are required at the outset. These essentially pertain to human perceptions of natural resources and how they interact with nature. The notion of pursuing ‘nature-as-object and commodity’ needs to be replaced by ‘nature-as-subject and community’. As a result, the worldview towards nature should change from ‘anthropocentric’ to ‘eco-centric’.

A complementary mindset shift is also required with regard to treating humans in this entire ecosystem. Conventional economists and planners treat humans as ‘rational beings pursuing wealth and self-interest’. However, there is a need to consider the irrationalities and complexities exhibited by humans. This implies that our paradigm must shift from treating humans as Homo Economicus (rational beings pursuing wealth and self-interest) to Homo Ecologicus (a person who is connected with and cares for all forms of life on Earth).

Moreover, to truly commit to the cause of just transition, the focus needs to expand from being exclusively coal-centric to also include other fossil fuels, and even wider systemic transformations that are required for transforming the planet, people and economies into sustainable, inclusive and resilient ones.

This is because of the inter-linkages and varying degrees of dependence that exist between various sectors and segments of people on value-chains pertaining to coal. As a result, the need of the hour is to go beyond siloed thinking and consider sectors, socio-economic, cultural and political aspects that are crucial for the development planning of any nation.

To implement such a vision of just transition, a five-pronged approach can be considered.

1. There needs to be utmost clarity on what a ‘just transition’ would mean for India

Some common clarifications needed include the transition’s pace, shape, scope, coverage, timeline, policy-level and regulatory certainty regarding the measures that will be adopted to achieve this transition. As for India, the updated NDCs (Nationally Determined Contributions) submitted to the United Nations Framework Convention on Climate Change (UNFCCC) as well as the Long-term Low-carbon Development Strategy (LT-LEDS) can serve as the guiding principles for framing a just transition strategy for the country.

Such a strategy needs to encompass techno-economic, socio-cultural, political and other varied aspects around energy transition and climate justice. Taking on a nodal role, the Union Government’s think-tank, NITI Aayog, can formulate a plan in conjunction with inter-ministerial collaboration, state governments, civil society organisations, domain experts, public and private sector enterprises, worker unions and communities. In order to achieve socio-political acceptance, it is of paramount importance to take the plan to the last mile by engaging in dialogue with people at the grassroots, in particular the marginal communities.

2. Measure the scope and impact of the transition

While considering the principle that ‘what’s measured, can be managed’, it is essential to measure (both quantitatively and qualitatively) the scope of transition and the extent of its impact on the economy, society and ecology, as well as at the national, sub-national, regional and sectoral levels. There are several case studies by independent organisations that attempt to define the scope and impact of just transition, but for the concept to gain authoritative credibility, the existing government institutions must commission and accept such studies and acknowledge the manifestations of such a transition.

Ministries and line-departments may also assess the domain-specific impacts. As an example, sector-specific ministries like power, labour, coal, iron & steel, petroleum and natural gas, and transport may be involved. However, collating datasets with respect to the workforce requires a substantial amount of effort since informal employment and its induced impacts on the local economy are complex issues to be examined. Existing information with District Industries Centres, the Office of Labour Commissioners, Ministry of Labour and Employment, amongst others, may be used as the starting point to update, re-assess, and include qualitative aspects with respect to information around employment.

3. Need for vulnerability assessment

Third, a detailed vulnerability assessment is instrumental, once the plan document and a comprehensive database of impacts, particularly on the people employed in the entire ecosystem, are in place. This would also involve identifying and marking the various kinds of vulnerabilities associated with various workers (social, operational, economic, political and others). Along with this, a mitigation plan to combat the potential adverse impacts on vulnerable workers owing to the transition is crucial. The principles of ‘just transition’ dictate that social dialogues should be conducted to assess the perspectives of the communities from the ground in a participatory manner.

Therefore, onboarding civil society organisations, think-tanks and impact assessment organisations will be critical to this process. This is primarily due to the capacity constraints within the state’s administrative setup to cover both quantitative and qualitative impacts associated with clean energy transitions. To accomplish this, assessments at the national and departmental levels, assisted by domain experts and think-tanks can be conducted.

Some of the legacy and structural factors that can contribute to the vulnerabilities are enlisted in the following matrix:

4. Targeted strategies

Fourth, the vulnerability assessment will provide a basis for designing targeted strategies tailored to address the different vulnerable segments within the entire ecosystem of the workforce, prioritising the most vulnerable segments first. These strategies may include severance and rehabilitation packages, exploring alternate job avenues, and skill development programs, among other initiatives. While developing the strategies, due importance should be given to the perceptions of affected workers, which follows the principles of participatory governance in just transitions. Moreover, to avoid any potential for disagreements and social unrest, it is extremely important that these strategies be devised and planned with the acceptance of various stakeholders.  

5. Financing

Finally, based on the targeted strategies, the financial requirements to fund the energy transition in a just and equitable manner can be calculated. This will enable policymakers to determine the gaps and requirements in the immediate, short and long term by comparing them with the existing channels of financial inflows towards the energy transition.

Furthermore, a robust tracking and monitoring system must be established to measure indicators of progress and impact on the ground, including indicators that determine the justness of climate finance like income enhancement, local economic development, and so on. As a matter of course, the effective implementation of these strategies must occur at all levels of government, from the local to the state to the national levels, while the affected communities are given a proactive role in the utilisation of funds.

By adhering to just transition principles - not simply as a tool of climate action, but as a tool of transformational change and development planning as well – a new social contract can be forged that redefines how government, enterprises, and communities interact with each other and the environment. A contract that is not premised on infinite efficiency, exploiting resources and maximising profits but on resilience, equity and justice.

This is the second of a five-part series of articles on ‘Decoding Just Transition in India’. Read the first part here. 

The author is with the Vasudha Foundation, a climate think-tank in India. Views are personal. The article was originally published as a blog on their website.