Just Transition Framework - Guidance

The Call for Evidence highlighted that to help just transition planning it is essential that the impacts (risk and opportunities) are identified from the outset and captured in an evidence base. Various types of analysis are needed to inform policies, planning and strategies. The potential risks and opportunities arising from a transition need to be understood and, where possible, quantified. These include, but are not limited to, the possible impacts on employment, social and economic conditions, land management, the natural environment and culture.

It is particularly important to understand how risks and opportunities will be distributed. Some people will experience greater loss or hardship than others. For example, those who share protected characteristics will be impacted differently. Therefore, analysis of the socio-economic context of change, undertaking assessments of impact (equality impacts, impacts on children for example), and by understanding how multiple changes can compound to increase loss or hardship is crucial if we are to deliver positively for all Wales’ communities. It is equally important to ensure that the benefits of the transition are shared fairly. This means proactively identifying opportunities to improve outcomes for disadvantaged groups, ensuring that economic, health, and environmental improvements reach all communities.

The Welsh Government undertakes this analysis as part of its policy development processes such as through Integrated Impact Assessments and the development of emission sector pathways. Businesses, the third sector and communities will benefit from embedding just transition considerations within their processes and decision making. The UK Government’s Green Book and Magenta Book provide guidance on how to appraise and evaluate policies, projects and programmes. Hwb Dyfodol [FUTUREGENERATIONS.WALES] provides opportunities for organisations to learn from and collaborate with each other on futures thinking and preparing for different futures.

Assess the Impacts and Opportunities across Emission Sectors

Emissions occur in the housing, transport, industry and business, the power sector, agriculture, land use, the public sector and waste sectors. Looking at evidence across emissions sector pathways enables mitigation measures with social, economic, cultural and wider environment contexts to be analysed together over a period of time. We have a starting point for considering the impacts and opportunities of these measures across the short, medium and long term as we already have some certainty around some policy targets, ambitions or phase in technologies.

To build on this, our Call for Evidence sought to gather evidence and insights from a wide range of stakeholders, across Wales and the wider UK and from across our emissions sectors. Welsh Government will continue to build our evidence base to support just transition planning, working with stakeholders as appropriate.

Assess Impacts and Opportunities on Employment and Business  

Labour market disruption is an inevitable part of any economic transition. Transitions will create new jobs, eliminate some, and transform others. In 2023, the Climate Change Committee published their assessment  of the net zero workforce. They concluded:

• The majority of workers will not see major impacts, with around a fifth of workers seeing the largest impacts – those that are currently employed in sectors that will have a core role in delivering net zero, often in the next decade.
• There is potential for the net zero transition to create more jobs than will be lost, in low-carbon sectors, such as buildings retrofit, renewable energy generation and the manufacture of electric vehicles.
• The transition provides a range of opportunities, from driving growth in areas with historically low employment to diversifying the workforce of core net zero sectors. However, it also comes with risks.
• Government has policy levers at its disposal to support workers during the transition to net zero. It does not need to intervene in every sector of the economy, but clearer plans are needed to harness the potential of the transition and to manage its risks. 

To plan a just transition, we need to understand how a transition might affect workers, including any indirect impacts on their families, and how different transition strategies can improve employment outcomes. Some parts of our economy will change at a faster rate as new opportunities emerge, and in different ways across different parts of Wales. This could present challenges for businesses and workers to successfully transition, acquiring new or updating skills in a timely manner to meet these future net zero ambitions. It is important that organisations, workers and others affected, work together to plan the transition.

Assess Impacts and Opportunities for Different Groups of Society 

Without proper planning, people with protected characteristics, on lower incomes or from more vulnerable groups may be more at risk of experiencing the negative impacts of the transition to a net zero economy. For example, Households Below Average Income data for Wales shows non-white ethnicity is linked with a greater likelihood of relative income poverty, and living with a disabled person makes relative income poverty more likely for children and working age people.  This is just a single example of intersectionality, with many other examples existing. Further analysis by the Climate Change Committee on the impacts on different households is provided in Chapter 8 of the UK’s Seventh Carbon Budget. 

There are risks we can mitigate, and opportunities we can grasp, if we understand the different groups in our communities. With the skills transition, we have the chance to create new employment opportunities for underrepresented groups within our communities. For example, there is a relatively low percentage of women working in the construction sector [THECCC.ORG.UK], which will be an important sector in retrofitting housing stock – there may be opportunities to make the career more accessible to women.

The Call for Evidence highlighted that collaboration between the public sector, businesses, workers, unions and communities is fundamental for just transition decision-making. Citizen participation in the transition to net zero is crucial in making the transition to net zero just and fair. Children and young people must have a voice as future citizens who will carry the legacy of decisions we make.

It is important to create dialogue among stakeholders in order to initiate the transition process. The changes to transition will impact on organisations, workforces, local economies and communities. We must therefore ensure a clear process that enables those impacted to engage in dialogue. We want experts and people with lived experience to work together and contribute to the planning and delivery of a just transition. This should be done in a context-specific way.

The approach to involvement must also enable the participation of citizens and must be established at the earliest possible stage. Involvement should continue throughout the design, implementation and evaluation processes to enable the identification of issues and potential solutions throughout. Early dialogue among stakeholders can provide the momentum for more detailed transition planning.

This approach aligns with the requirements of the WFG Act. However, there are many stakeholders and partners not named in the WFG Act. Many more stakeholders across multiple areas of social, economic, cultural and environmental action can be key partners in leading the transition to net zero. The roles and responsibilities for planning and implementing a just transition to net zero must also be defined.

Leadership, Collaboration and Roles and Responsibilities 

Leadership and collaboration between governments, the wider public sector, industry and business representatives, academic institutions and communities will be needed to achieve a successful and just transition.

The Welsh Government’s role in Just Transition 

The Welsh Government will lead in embedding this approach to a just transition. We will continue to build the evidence base and capacity in order to plan and implement change. We will work with partners to address gaps in evidence, where such evidence would have a material impact on decision making. We will ensure just transition is integrated effectively into our national climate policies. In doing so, we will aim to co-design and co-deliver with those who stand to be most significantly impacted by the transition to net zero. 

Within individual organisations

A strong partnership across the public sector, businesses, unions, workforce and local communities will be vital for the success of just transition. This means that building knowledge and capacity will be required across all areas of Welsh society, including at the level of individual organisations of all kinds: businesses, local authorities, public bodies and third sector organisations. Organisations should use this framework to instigate or update plans to ensure a just transition.

Communities

Active engagement must continue with communities, voluntary sector and community networks to explore initiatives and opportunities for capacity building around just transition.

Support is also needed for people in the community who want to take action to help their community make changes.

Academia and educators

Universities and other research organisations and institutions can play crucial roles in transition planning. They can be key partners in the analyses needed for transition planning and in reskilling and retraining. 

Cooperation between governments, industry representatives, and academic institutions will be needed to align the education and research sectors with the needs of a just transition. 
The role of the UK Government 

Many of the most powerful levers to deliver a just transition, such as powers over welfare and trade, sit with the UK Government. The Welsh Government will seek to work with the UK Government on reserved matters so that powers at its disposal are deployed effectively in Wales.

Public Engagement 

The involvement of workers, communities and business is critical to ensure that just transition planning and policies are relevant and effective. Children must have a voice as the citizens who will carry the legacy of the decisions we make. It is also important that engagement with people with protected characteristics is prioritised, including ethnic minority communities and disabled people, to ensure their lived experiences shape our transition planning. This is in line with our commitment to inclusive co-production across all protected groups. 

The WFG Act places a legal obligation on public bodies to consider and involve people of all ages and diversity in decision-making. The sheer extent of change needed to tackle climate change cannot be achieved without opening the discussion and taking a co-production approach. Net Zero Wales: Carbon Budget 2 commits to a two-way dialogue on climate change, particularly with people and communities most likely to be impacted by climate change and negatively affected by future policy decisions. 

The Engagement Approach around Climate Change (2022-2026) sets out the Welsh Government’s approach to ensuring timely and effective involvement of stakeholders in climate decision-making and strengthening the coalition of Team Wales. 

The Welsh Government’s Public Engagement Strategy sets out how the Welsh Government and its partners work together to support and engage the people and communities of Wales in action on the climate and nature emergencies. In presenting the evidence, it conveys the importance of ensuring that fairness is embedded in the approach for the people of Wales and future generations. This will be the foundation for how we involve the public in the decisions that affect them around just transition.

Ensuring fairness for groups that might be adversely affected by the transition

The Climate Action Wales public engagement programme commits to prioritising conversations with groups that could be adversely affected by climate change and the transition. The complexity of many climate-related topics means that tailored mechanisms are needed to ensure that these groups are provided with opportunities to meaningfully and fairly participate in outreach climate engagement through the programme. This equally applies to the provision of accessible climate communications and ensuring that the Climate Action Wales campaign uses tailored communications channels, messages, and trusted voices so that messages are reaching these groups. The national campaign provides useful sources of information on support for making green home energy, travel, food and consumption choices, and publicises opportunities for everyone to participate in policy decision-making so that no-one is left behind.

Working across the Wales to engage with the public 

Along with the approach described in the Engagement Approach around Climate Change (2022-2026) document, and the Public Engagement Strategy previously referred to, the annual Wales Climate Week event aims to build relationships with other organisations, bringing organisations across Wales (public, private and third sector) together to share learnings, stimulate ideas and encourage discussion on solutions for tackling climate change. The Climate Conversations fund linked to this annual event was introduced to support representative bodies of businesses, social enterprises and community groups to hold outreach events around the Week and encourage broader discussions on climate change.

Our approach is to facilitate a shared understanding of the just transition to net zero across government, organisations and communities in Wales. We have developed Just Transition Guiding Principles, which support the Three Pillars and align to the WFG Act. This will help plan cohesive and effective transitions and we have identified actions to help mainstream and integrate our approach into planning and decision-making processes. 

Our approach to a just transition gives us the opportunity to develop a more holistic view of our current decarbonisation plans and policies across all levels of society and within organisations, and to consider their impact in line with our commitments to drive fairness and equality in all we do, ensuring we achieve better outcomes for all. 

Example transition scenarios are set out below and our aim is to build on these scenarios through the development of more targeted guidance in collaboration with stakeholders in future. Further guidance can be found in the Grantham Institute’s Just Transition Explainer article.  The article provides suggestions on the actions that can be carried out at national-level, regional-level and at private sector-level, and includes links to other tools, resources and case studies.

Regional or Sectoral

Analysis from a sectoral or geographical area level, which includes an organisation’s boundary of delivery e.g. Local Authority delivery area.

Who

Welsh Government, local government, Public Services Boards, Natural Resources Wales, businesses and third sector organisations within the geographic area or sector.

How

Integrate and inform existing plans – such as Well-being plans, Area Statements, Economic Development plans or the development of sectoral or community level Decarbonisation and/or Just Transition plans.

Organisation

Focuses on the transition of an organisation or individual industrial site.

Who

Business, local government, NHS, community groups, other public sector organisations. 

How

Update existing climate and/or business plans or the development of specific Just Transition plans.

Policy Development

Involves the assessment of need for future policies to respond to the threats and opportunities, and looking at the impacts and opportunities of the policy being developed.    

Who

Welsh Government, local government, NHS, Natural Resources Wales and business.

How

Policy development tools such policy options analysis and policy impact assessments.