Principles for Financing a Just and Urgent Energy Transition

The World Economic Forum outlines a framework to accelerate the phase-out of coal in developing countries, emphasizing that these nations accounted for only 5% of global energy transition investment from 2011-2020 despite representing half the global population. The document proposes eight principles for financing—including the development of national retirement plans, worker reskilling, and the use of carbon markets—and calls on COP26 parties to mobilize at least $10 billion in annual incremental public capital to catalyze private investment. It highlights specific financial mechanisms such as Energy Transition Mechanisms (ETMs), transition bonds, and blended finance to de-risk investments and ensure a just transition for affected communities.

• Developing countries face significant barriers to energy transition due to limited fiscal capacity and the need to prioritize basic infrastructure, healthcare, and education. Between 2011 and 2020, low-income and lower-middle income countries represented approximately half of the global population but accounted for only 5% of global energy transition investment.
• To limit global temperature rise to 1.5ºC, the IPCC indicates that cumulative carbon emissions must not exceed 300 gigatons worldwide. Coal-fired power plants are a primary driver of emissions, contributing 9 billion tons in 2020, which is 26% of total global carbon emissions and nearly three-quarters of the electricity sector's emissions.
• The document proposes eight principles to guide financing for a just transition: supporting national plans to retire coal, investing in worker reskilling and community assistance, ensuring coal capacity is replaced by low-emission generation, recycling coal plant proceeds into renewables, providing technology transfer, creating bespoke large-scale financial solutions, leveraging carbon markets, and prioritizing cost-effective, scalable renewable technologies.
• The 'Call to Action' for COP26 parties includes three primary demands: establishing policies to phase out coal-fired power, ratifying Article 6 of the Paris Agreement, and mobilizing at least $10 billion of incremental public capital per year from developed to developing countries to catalyze private investment.
• Several innovative financing mechanisms are identified to accelerate the transition, including Energy Transition Mechanisms (ETMs) for orderly plant retirement, transition bonds (such as the PLN 1 billion bond by Tauron Polska Energia in Poland), blended finance to de-risk commercial investment (e.g., ENGIE Energía Chile's $125 million wind farm), and the Universal Energy Facility for decentralized clean energy access.

APA

World Economic Forum (2021). Principles for Financing a Just and Urgent Energy Transition. https://www3.weforum.org/docs/WEF_JUET_Principles_2021.pdf

Chicago

World Economic Forum. Principles for Financing a Just and Urgent Energy Transition. 2021. https://www3.weforum.org/docs/WEF_JUET_Principles_2021.pdf.

Wikipedia

{{cite press release |author=World Economic Forum |title=Principles for Financing a Just and Urgent Energy Transition |date=October 2021 |url=https://www3.weforum.org/docs/WEF_JUET_Principles_2021.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{worldeconomicforum2021principles, author = {{World Economic Forum}}, title = {{Principles for Financing a Just and Urgent Energy Transition}}, publisher = {World Economic Forum}, year = {2021}, month = oct, url = {https://www3.weforum.org/docs/WEF_JUET_Principles_2021.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }