Financing Sustainable Just Energy Transitions: Challenges and Ways Forward

Published September 2024.

This is a contribution by the researchers on the Climate Finance for Equitable Transitions (CLiFT) project to the T20 Task Force 02 Sustainable Climate Action and Inclusive Just Energy Transitions, Sub-Topic 1 Fostering Sustainable, Inclusive, and Just Energy Transitions.

Executive Summary

The Just Energy Transition Partnership (JETP) has emerged as a key initiative to support developing countries transition from fossil fuels while addressing its social and economic dislocations. We identify four concerns in the JETP financing model that potentially give rise to legal, regulatory, policy and governance risks, undermining climate action and sustainable development.

1. Reliance on debt instruments and private finance;
2. Legal risks from private finance and investments;
3. Social and economic transition and governance risks; and
4. Risks of incompatibility with multilateral climate commitments

We set out how the JETP model and proposed financial instruments can generate social and economic transition risks and have broader implications for governance and policymaking on climate action and sustainable development.

This contribution was submitted by:

• Professor Celine Tan, Professor of International Economic Law, Warwick Law School, University of Warwick, UK
• Dr Anil Yilmaz Vastardis, Senior Lecturer, Essex Law School. University of Essex, UK
• Dr Gamze Erdem Türkelli, Assistant Research Professor in Public International Law, Human Rights and Sustainable Development, Faculty of Law, University of Antwerp, Belgium

Authors