April 11, 2022
At the heart of the 2015 Paris Agreement and Sustainable Development Goals is a theory of change which sees the delivery of critical environmental targets (such as the net-zero economy) as intrinsically connected with wider social objectives such as ending poverty, cutting inequality and achieving decent working conditions across the world. The result needs to be a 'just transition,' one that recognises the fundamental injustices of the current fossil-fuel based energy system, the ways in which climate change exacerbates many inequalities (notably in the developing world) and the opportunity of shaping the drive to net-zero so that it helps to overcome these structural failings. This report updates a 2019 IPR report on the just transition in light of growing policy and market action (notably around COP26), as well as the crisis sparked by the war in Ukraine.The shock of Russia's invasion of Ukraine in February 2022 is deepening existing energy inequalities through the sharp rises in energy and other commodity prices, worsening the livelihoods for large sections of the global population. It could also accelerate the shift to the net-zero economy by once again adding security to decarbonisation as key drivers for accelerated deployment of resource efficiency and renewable energy. This makes the just transition a strategic issue for investors and policymakers in 2022.