A Worker-Centred Framework for Financing the Just Transition

The report argues that South Africa's current Just Energy Transition Investment Plan (JET-IP) relies too heavily on private finance and de-risking, which may increase energy costs and fail to ensure a socially just transition. It proposes a cohesive framework based on worker demands, featuring a Climate Response Fund (CRF) funded by carbon taxes and fuel levies, a promotional monetary policy to direct credit toward green industrialisation, and the reform of Development Finance Institutions (DFIs) like the Industrial Development Corporation (IDC) to provide long-term, patient capital.

• Current climate finance in South Africa is insufficient and overly dependent on the private sector. While the Presidential Climate Commission estimates annual needs between R334 billion and R535 billion, 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.
• The existing Just Energy Transition Investment Plan (JET-IP) is criticized for prioritising profit and relying on market-based de-risking, which the authors argue threatens to fail in driving funding toward green industrialisation and may increase the cost of energy.
• The report proposes the creation of a Climate Response Fund (CRF), a pseudo-sovereign wealth fund expected to earn approximately R100 billion per annum. Proposed funding sources for 2026 include increasing the carbon tax to R500 per ton (R22 billion), allocating 30% of the General Fuel Levy (R33 billion), and utilizing mineral and petroleum resource royalties (R13 billion).
• A 'promotional' monetary policy is recommended to counter the risk-averseness of financial institutions. This includes implementing green-differentiated capital requirements, using interest rates to incentivise transition-compliant sectors, and revising the South African Reserve Bank's (SARB) inflation-targeting framework to better account for climate-driven inflation.
• The Industrial Development Corporation (IDC) is identified as a primary delivery institution for the transition. The report recommends recapitalising the IDC to allow it to move away from a 'self-financing' model, providing loans for 20-to-30 year projects, and democratising its Board to reduce the influence of the minerals, energy, and financial sectors.
• The framework is grounded in worker demands from COSATU's Just Transition Blueprint, which advocates for an eco-socialist system focusing on job retention, upskilling, a basic income grant, and the redistribution of power and resources.

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} }