Advancing a Just Transition: A Rights-Based Approach to Climate Financing

The paper argues that the dominant 'Billions to Trillions' agenda, which prioritises private sector mobilisation and de-risking, often conflicts with international human rights standards. It evaluates this architecture through five principle clusters: national responsibilities, national sovereignty, procedural fairness, responsibilities of financial investment, and obligations during crises. The author contends that this model commodifies public goods, undermines state policy autonomy through investment treaties, and lacks transparency. Using South Africa's Just Energy Transition Investment Plan (JET-IP) as a case study, the report highlights gaps in public transport funding and the risks of private-sector dominance. It concludes by proposing a research agenda to bridge the gap between human rights norms and the actual implementation of climate investment plans.

• The 'Billions to Trillions' agenda, aligned with the 'Wall Street Consensus', prioritises the mobilisation of private finance by using public funds to de-risk investments, which shifts risks to the public sector to support private profit.
• Reliance on Public-Private Partnerships (PPPs) and blended finance can undermine essential rights for the poor by limiting access to infrastructure through high user fees, effectively transferring state responsibilities to profit-oriented actors.
• International investment treaties and Investor-State Dispute Settlement (ISDS) mechanisms undermine national sovereignty by allowing private investors to challenge government regulatory changes that impact profitability, often resulting in large financial compensations from public funds.
• Climate finance is characterised by a significant lack of transparency and procedural fairness, particularly in private-sector-led projects and PPPs, which hinders community participation and accountability.
• Developed nations have consistently failed to meet the US$100 billion annual climate finance target, and much of the provided funding consists of loans rather than grants, which can lead to unsustainable debt for developing countries.
• In South Africa, the Just Energy Transition Investment Plan (JET-IP) prioritises profitable industries like new energy vehicles and green hydrogen for export over inclusive local decarbonisation, with only 4.7% of transport financing allocated to public transport.
• Current Debt Sustainability Assessment (DSA) procedures used by the IMF and World Bank are inadequate because they ignore foreign currency borrowing costs, the full fiscal impact of climate change, and human rights implications.
• Contingent liabilities used in the 'Billions to Trillions' agenda transfer commercial risk to the state and are often concealed in the financial statements of private companies, posing significant long-term fiscal risks during crises.

APA

Institute for Economic Justice (2023). Advancing a Just Transition: A Rights-Based Approach to Climate Financing. https://iej.org.za/wp-content/uploads/2023/12/CAAP-Working-Paper_climate-financing.pdf

Chicago

Institute for Economic Justice. Advancing a Just Transition: A Rights-Based Approach to Climate Financing. 2023. https://iej.org.za/wp-content/uploads/2023/12/CAAP-Working-Paper_climate-financing.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=Advancing a Just Transition: A Rights-Based Approach to Climate Financing |date=December 2023 |url=https://iej.org.za/wp-content/uploads/2023/12/CAAP-Working-Paper_climate-financing.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2023advancing, author = {{Institute for Economic Justice}}, title = {{Advancing a Just Transition: A Rights-Based Approach to Climate Financing}}, institution = {Institute for Economic Justice}, year = {2023}, month = dec, url = {https://iej.org.za/wp-content/uploads/2023/12/CAAP-Working-Paper_climate-financing.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }