Policies enabling transition to a more sustainable economic system are not necessarily fair to all. Deliberate effort is needed to ensure that they do not lead to injustices that reinforce, or add on to those currently existing. Financing the transition from fossil fuels to non-polluting forms of energy use is a universal challenge. Likewise, it is extremely costly to provide sustainable, alternative livelihoods to all affected stakeholders. Unfortunately, this aspect is often overlooked. Contemporary climate finance discourse does not address, in full, the financing of economic diversification, re-skilling, and infrastructure investment, among others. This is especially true in developing countries. This Policy Brief advocates expanding the scope of climate financing to just transition financing. Financing should pay greater attention to enhancing people’s capacity to adapt to the socio-technical transition. As a forum for major economies, the G20 should play a leading role in shaping and mainstreaming just energy transition financing.
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