A Worker-Centred Framework for Financing the Just Transition

The report argues that existing financing for South Africa's just transition, such as the Just Energy Transition Investment Plan (JET-IP), prioritises private profit over social justice and is insufficient in scale. It proposes a cohesive framework anchored in worker demands and a new macroeconomic structure. Key recommendations include the creation of a Climate Response Fund (CRF) funded by carbon taxes and fuel levies, a shift toward 'promotional' monetary policy by the South African Reserve Bank to incentivise green lending, and the recapitalisation of the Industrial Development Corporation (IDC) to provide long-term, patient capital for public goods.

• Current financing for the energy sector transition is severely inadequate; existing JET-IP pledges of $12.8 billion (R225.8 billion) are a small fraction of the R1.5 trillion estimated requirement for the energy sector alone.
• Tracked climate finance in South Africa is dominated by the private sector, which accounted for 86% of the total in 2023, likely driven by responses to loadshedding.
• The report proposes a Climate Response Fund (CRF) as a pseudo-sovereign wealth fund expected to earn approximately R100 billion per annum in 2026 through re-allocated revenues from carbon taxes, fuel levies, mineral royalties, and budget restructuring.
• To increase revenue and influence behavior, the report recommends increasing the effective carbon tax rate to R500 per ton of CO2 by 2040, noting that the current effective rate is only R7 per ton compared to a statutory rate of R125.
• The South African Reserve Bank (SARB) is urged to adopt a 'promotional' monetary policy, which includes reviewing its inflation targeting framework and implementing green-differentiated capital requirements to lower borrowing costs for low-carbon sectors.
• The report suggests that modest changes in credit allocation could unlock significant funding: allocating 2% of gross lending over 10 years could provide R10.4 billion, while requiring 45% of assets to be invested in climate-friendly assets could provide R1.3 trillion.
• The Industrial Development Corporation (IDC) should be reclassified from a 'self-financing' DFI to allow for direct government support and recapitalisation, enabling it to fund projects with 20-to-30 year timeframes.
• The IDC's governance should be democratised by reducing the number of representatives from the mining, energy, and finance sectors and including civil society, trade unions, and departments tasked with the green transition.
• A just transition is defined as a transformative, economy-wide concept that must address poverty, inequality, and unemployment, moving beyond the energy sector to include agriculture, transport, and mining.

APA

Institute for Economic Justice (2025). A Worker-Centred Framework for Financing the Just Transition. https://iej.org.za/wp-content/uploads/2026/03/A-Worker-Centred-Framework_A4_Digital.pdf

Chicago

Institute for Economic Justice. A Worker-Centred Framework for Financing the Just Transition. 2025. https://iej.org.za/wp-content/uploads/2026/03/A-Worker-Centred-Framework_A4_Digital.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=A Worker-Centred Framework for Financing the Just Transition |date=August 2025 |url=https://iej.org.za/wp-content/uploads/2026/03/A-Worker-Centred-Framework_A4_Digital.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2025workercentred, author = {{Institute for Economic Justice}}, title = {{A Worker-Centred Framework for Financing the Just Transition}}, institution = {Institute for Economic Justice}, year = {2025}, month = aug, url = {https://iej.org.za/wp-content/uploads/2026/03/A-Worker-Centred-Framework_A4_Digital.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }