A Worker-Centred Framework for Financing the Just Transition

This report by the Institute for Economic Justice (IEJ) proposes a worker-centred alternative financing framework for South Africa's just transition to a low-carbon economy. It argues that existing mechanisms, such as the Just Energy Transition Investment Plan (JET-IP), rely too heavily on private sector funding and profit-driven models, which risk neglecting socioeconomic rights and worker protections. The IEJ advocates for a holistic macroeconomic shift involving promotional fiscal and monetary policies, the creation of a Climate Response Fund (CRF), and the realignment of Development Finance Institutions (DFIs) to prioritise public goods and job creation over profit.

• Current climate finance in South Africa is insufficient and overly dependent on the private sector. While the Presidential Climate Commission (PCC) estimates annual needs between R334 billion and R535 billion to meet NDC and net-zero goals, tracked annual average finance from 2019 to 2021 was only R131 billion. In 2023, private sector funding accounted for 86.5% of total climate finance, while debt made up 75% of the total.
• The IEJ proposes the establishment of a Climate Response Fund (CRF), a pseudo-sovereign wealth fund designed to provide stable, long-term financing for the just transition. The CRF is estimated to earn approximately R100 billion per annum through recommended fiscal re-allocations for 2026, including increasing the carbon tax to R500 per ton, allocating 30% of the General Fuel Levy, and capturing 100% of Mineral and Petroleum Resource Royalties.
• The report argues for a shift toward 'promotional monetary policy' to support a worker-centred transition. This includes reviewing the South African Reserve Bank's (SARB) inflation-targeting framework and independence to allow for better coordination with fiscal policy. Specific recommendations include implementing green-differentiated capital requirements—lowering requirements for low-carbon sectors and raising them for environmentally harmful activities—and using interest rates to incentivise transition-compliant sectors.
• The framework calls for the realignment of Development Finance Institutions (DFIs), specifically the Industrial Development Corporation (IDC), to move away from profit-driven commercial practices. Recommendations for the IDC include recapitalisation through the CRF and government grants, providing 'patient capital' for projects with 20-to-30 year timeframes, and democratising Board representation to include more civil society and trade union voices while reducing representatives from the mining, energy, and financial sectors.
• The proposed framework is grounded in worker demands as outlined in COSATU’s Just Transition Blueprint for Workers (2022). These demands emphasize that a just transition must address poverty, inequality, and unemployment through job retention, upskilling, the provision of a basic income grant, and the redistribution of power and resources within a system of eco-socialism.
• The report critiques the Just Energy Transition Investment Plan (JET-IP), stating that its reliance on private funding and 'de-risking' approaches prioritises profit over people. It notes that existing JET-IP pledges of $12.8 billion are a small fraction of the R1.5 trillion estimated to be needed for the energy sector transition alone.

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_A5_Print_V2.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_A5_Print_V2.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_A5_Print_V2.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_A5_Print_V2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }