Philanthropists are stepping in to ensure vulnerable workers and their communities are not left behind when developing nations agree multi-billion-dollar climate deals to shutter fossil-fuel power plants and ramp up green energy investments.
Last year, Vietnam and Indonesia joined South Africa in clinching a “just energy transition partnership” (JETP) - a funding package from wealthy governments and banks to help emerging economies phase out coal while creating green jobs - followed by Senegal this June.
As governments and banks grapple with how the promised finance will be delivered and spent, philanthropic donors are looking for ways to help communities now reliant on fossil fuels make the most of opportunities from a renewable energy roll-out.
IKEA Foundation in September launched a four-year, US$20-million scheme that aims to help make energy transitions in Indonesia, South Africa and Vietnam fair and benefit communities - which it hopes other charitable organisations will join.
“We want at least US$100 million over the next five years,” said Sahba Chauhan, programme manager for climate engagement at the IKEA Foundation in the Hague.
The new initiative - a joint venture with the US-based ClimateWorks Foundation - plans to support workers facing closure of coal mines and power plants by facilitating talks at local and national levels on how to achieve a “just transition”.
Chauhan said finance would be provided to pilot projects, businesses and entrepreneurs that are creating alternative industries like renewables, as well as funding for civil society groups already working locally on a clean energy transition.
There’s no question to me that we will have to embrace a diversity of resources from a range of different places.
Kumi Naidoo, senior advisor, Community Arts Network
“We are focusing on areas where national governments have already mandated coal shutdowns and phase-downs,” she said.
The IKEA Foundation’s new funding follows pledges made at the COP26 UN climate summit in 2021, where it joined the US$1.5-billion Global Energy Alliance for People and Planet.
At COP27 in 2022, philanthropic groups committed an additional US$500 million over three years to accelerate a just energy transition in low- and middle-income countries.
Under the 2015 Paris Agreement to tackle global warming, about 195 countries agreed to slash their emissions in coming decades, reaching net-zero in the second half of the century.
But most developing countries are still reliant on fossil fuels for the electricity supplies they need to grow their economies and cut poverty - and many are struggling with high levels of debt, which has pushed them to call on rich nations and private donors to fund their switch to cleaner energy.
Worldwide, the renewables sector is expanding as investment grows - especially in solar power - boosting capacity, production and employment opportunities.
But the shift away from coal, oil and gas will impact about 32 million people working in high-carbon industries, according to the IKEA Foundation.
Clear and detailed plans to re-skill those workers and offer them new sources of income will be crucial to limit the economic, social and political impacts, it added in a statement.
“This initiative is a seed that we’re hopeful will grow into other regions of the world,” said Jason Anderson, a senior programme director at the nonprofit ClimateWorks Foundation.
G20 talks inclusive transition
Leaders of the world’s 20 largest economies last month agreed on a goal of tripling global renewable energy capacity by 2030 and emphasised promoting “other sources” of clean energy like green hydrogen.
The G20 also called for energy transitions to be inclusive and not to “leave anyone behind”.
But climate campaigns such as We20, an alliance of close to 100 civil society groups and individuals from across India, said there is so far little sign of this happening in a major way.
For example, G20 host nation India and several other G20 countries include hydro and nuclear power in their clean energy plans, despite their potential for negative environmental and social impacts, said Indian environmentalist Ashish Kothari.
Meanwhile, there is little mention in G20 forums of decentralised renewable energy - such as solar rooftop systems and microgrids - which can help lay the groundwork for a fair transition that also creates jobs, he added.
The We20 group also pointed to problems with the acquisition of farmland and forests for large-scale renewable power facilities which has led to loss of livelihoods and food security for villagers and Indigenous peoples in India.
Helping communities take the lead
South Africa, Africa’s highest carbon emitter, has been at the forefront of the just transition conversation, with the country due to receive US$8.5 billion in grants and loans from the US, Britain and European Union countries to speed up its shift away from coal, under the first JETP announced in 2021.
But additional philanthropic contributions are essential as governments are not showing leadership in backing clean and just energy projects on a large-enough scale themselves, said South African human rights campaigner Kumi Naidoo.
“There’s no question to me that we will have to embrace a diversity of resources from a range of different places,” said Naidoo, a former head of Greenpeace International and Amnesty International and now a senior advisor to the Community Arts Network, a global activist group.
Sayak Datta, a partner at management consultancy Kearney in Singapore, agreed that just energy transitions will need significant investment from various sources: government budgets, private companies and investors, and philanthropic foundations.
Indonesia, for example, received US$29 million in grants from 15 funders for 92 recipients working on environment-related and just transition issues between 2019 and 2023, said Datta.
That includes money from the Ford Foundation to develop a knowledge hub on renewable energies for community-based entrepreneurs.
Grants from foundations or individual donors can be deployed swiftly and directly into areas of need, especially in remote places, and often with higher tolerance for risk, Datta added.
Naidoo said philanthropic cash would help Global South countries avoid taking more loans that pull them into “policy and implementation traps” - and allow communities to “lead themselves”.
Key to successful funding from any source are transparency, consultation with grassroots organisations and good governance to ensure the money goes where it is most needed, Naidoo said.
“Unless we do that, we don’t have a chance of a meaningful just transition in South Africa or anywhere else in the world,” he added.
This story was published with permission from Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit https://www.context.news/.
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