Just transition

Topic: Environment and Sustainable Development · NCERT: Beyond NCERT

Meaning

Just transition means moving to a low-carbon economy (one that burns much less coal, oil and gas) in a fair way. Workers, districts and states that depend on fossil fuels must be protected, not left behind.

It matters because the energy transition closes mines and power plants, and the cost does not fall evenly. In India it falls most on poor, tribal, coal-rich states. If the transition is unfair, it can lose public support and slow down.

Explanation

Why a transition can be unjust

• Energy transition: a long-term shift in how an economy gets its energy. It moves away from fossil fuels (coal, oil, gas) towards renewables (solar, wind, hydro), nuclear and green hydrogen.
• It is a structural shift. It changes power plants, factories, transport, jobs and state budgets, not just one fuel.
• Benefits are spread wide, but losses are concentrated:
• Cleaner air and a safer climate help everyone, including future generations.
• Lost jobs, lost tax income and dead mine towns hit a few regions hard.
• Without planning, these regions become poorer while the rest of the country gains.

What is at risk when coal declines

• Jobs: both direct jobs (in mines and power plants) and informal jobs (in coal transport and local trade).
• Coal royalties: payments that mining companies make to state governments for mining coal. States lose this income.
• District Mineral Foundation (DMF) funds: money collected from miners and spent on welfare in mining-affected districts. Less mining means less DMF money.
• Railways' coal-freight revenue: coal is the largest freight item for Indian Railways.

• Coal freight earns a lot of money → this helps keep passenger fares low → less coal traffic could put pressure on fares or on railway finances.

• Stranded assets: assets that lose value before the end of their expected life, such as coal plants and mines that become uneconomic early.

• Plants close early → their loans may not be repaid → the loss falls on banks and PSUs (public sector companies and public sector banks).

The three dimensions and the tools

• The Just Transition Work Programme says a just transition covers energy, socio-economic and workforce dimensions. These must be based on nationally defined development priorities and must include social protection (support such as income help and pensions for people who lose work) [1].
• Common tools:
• Reskilling: training coal workers for new jobs.
• Diversifying local economies: building new industries so a district does not depend only on coal.
• Repurposing mine land: for example, putting solar parks on old mines.

• Fiscal support: for example, Finance Commission support for states that lose coal revenue.

• Global frameworks:

• ILO Guidelines for a just transition (2015).
• Just Transition Work Programme (JTWP): set up at COP27, Sharm el-Sheikh (November 2022) under the Sharm el-Sheikh Implementation Plan [1]. After COP28 it became the UAE Just Transition Work Programme [1]. It holds an annual high-level ministerial round table, which began at COP28 [1].

• JETPs (Just Energy Transition Partnerships): deals in which rich countries give finance, mostly loans, to help a developing country retire coal early. Examples: South Africa (2021), Indonesia (2022) and Vietnam (2022).

• Link to the SDGs (2015-2030): SDG 8 (decent work) connects directly to the just transition. SDG 7 (clean energy) and SDG 13 (climate action) drive the transition itself.

In India

• Most exposed states: Jharkhand, Chhattisgarh and Odisha. They are coal-rich, have large tribal populations and have lower incomes. They depend on coal royalties, DMF funds and coal jobs.
• Coal phase-down, not phase-out: at COP26 (Glasgow, 2021), India pushed for the wording "phase-down" of unabated coal in place of "phase-out".
• Unabated coal: coal burned without any technology (such as CCUS, which captures and stores CO2) to catch its CO2.

• Phase-down means reducing coal slowly. This gives coal regions time to adjust, which is a just-transition choice in itself.

• Speed of the transition: on 31.12.2025, non-fossil sources made up 51.93% of India's installed power capacity [2]. In February 2026 this share reached 52.57%, so the 2030 target was met five years early [3].

• But coal still produces most of the actual electricity. So the coal economy, and the jobs and revenue that come with it, is still large.

• Young coal fleet: many Indian coal plants were built after 2010 and were expected to run for 25 years or more. Closing them early would create stranded assets on PSU and public-sector-bank balance sheets.

• No JETP for India: India does not want foreign finance tied to rules on its coal policy. It prefers "nationally defined" pathways, the same language the JTWP uses [1].
• Equity basis: India's emissions per person are far below the world average. Under CBDR-RC (Common But Differentiated Responsibilities and Respective Capabilities), rich countries caused most past emissions, so they should do more. India still needs energy to end poverty.

Don't confuse with

• Energy transition: the shift itself, from fossil fuels to clean energy. A just transition is about how fairly that shift is done for workers and regions.
• JETP vs JTWP: a JETP is a finance deal (mostly loans) between rich countries and one developing country to retire coal early. The JTWP is a UNFCCC work programme for all countries, set up at COP27 [1]. India has no JETP.
• Phase-down vs phase-out: phase-down means reducing coal use over time. Phase-out means ending it completely. India pushed for "phase-down" at COP26.
• Stranded assets: this is about financial loss on plants, mines and loans. A just transition is about people and regions. The two are linked, because early closures create both problems.

Prelims Hooks

• The Just Transition Work Programme was created at COP27 (Sharm el-Sheikh, November 2022), not at COP26 or COP28. After COP28 it was renamed the UAE Just Transition Work Programme [1].
• The ILO Guidelines for a just transition date from 2015.
• The JTWP says just-transition pathways must be based on nationally defined development priorities and include social protection [1].
• JETP order: South Africa (2021) → Indonesia and Vietnam (2022). JETP finance is mostly loans. India has no JETP.
• COP26 (Glasgow, 2021): "phase-down" of unabated coal, not "phase-out".
• Most exposed states: Jharkhand, Chhattisgarh and Odisha. Revenue at risk includes coal royalties, DMF funds and railways' coal-freight revenue.

Mains Points

• Just transition as federal and fiscal justice (GS-III/GS-II): coal-dependent states such as Jharkhand, Chhattisgarh and Odisha stand to lose royalties, DMF money and jobs, and Indian Railways depends on coal freight to keep passenger fares low. Suggested answers include reskilling, diversifying district economies, solar parks on old mine land and Finance Commission support for states that lose revenue.
• Pace versus fairness: India's gradual phase-down of coal, alongside fast growth in non-fossil capacity (51.93% by December 2025 [2]), protects coal regions. The counter-point is stranded-asset risk: if India delays and young coal plants are later closed early, PSUs and public sector banks carry the losses.
• Equity and climate finance (GS-II): low per capita emissions and CBDR-RC support India's demand for a "nationally defined" transition [1]. This explains India's wariness of JETP-style finance tied to conditions on its coal policy.

Related concepts

• Energy transition
• Energy trilemma
• Energy intensity
• Coal phase-down
• Grey hydrogen
• Blue hydrogen
• Green hydrogen
• Green ammonia
• Hydrogen economy
• Green premium

Read more

• The energy transition and a just transition