The heat is on: key principles for a just energy transition
The incineration of the town of Lahaina in Hawaii; endless ‘record’ heat across Asia, North America, southern Europe; flooding from Rwanda to New Zealand; and wildfires far from ‘wild’ but increasingly man-induced.
The 2023 warning sirens of a tipping point in climate breakdown are getting louder. We have wasted 40 years, deluded by powerful vested interests, the ease of ‘business as usual’, and the distraction of political manoeuvring. So a fast transition to clean energy has now become an emergency. But, to be fast, the transition must also be fair. It must build on precious public support rather than squander it.
The scale, scope and speed of this transition are daunting if we are to avoid warming over 1.5C and reach Net Zero emissions by 2050. We need $5 trillion of investment every year over the next seven years in renewable energy – primarily solar and wind. Our clean energy future with the necessary batteries, electric motors and power lines will also demand unprecedented mining for transition minerals. The International Energy Agency tells us the world needs six times more extraction of critical minerals such as copper, cobalt, lithium, nickel and rare earths by 2040. The Sustainable Metals Institute has revealed that over half the known global reserves of transition minerals lie on or near Indigenous peoples’ territories and peasant communities– custodians of these last lands.
Faced with the colossal responsibility of effecting a speedy transition – and the opportunities it represents – some governments, companies and investors are reaching for the ‘let-the-market-rip’ button: a bonfire of existing regulation in the name of accelerating exploration, project planning, and community consultation and negotiation. While there are many instances where bureaucracy is an unnecessary hindrance to a fast transition, in the field of human rights and environmental protection, this reflex to deregulate is already counter-productive – and evidence is mounting it won’t deliver the rapid transition intended.
Energy and mining companies have long, troubled histories of riding roughshod over the rights of workers and communities. Land and water grabs, pollution of rivers, dam collapses, low wages and unsafe working conditions: these have all contributed to create a ‘culture of resistance’ from many communities and workers, especially in weak governance zones characterised by corporate state capture. Many communities just don’t want mining and energy companies near them, fearing dispossession, destruction of livelihoods and culture, and the import of violence and vice – sadly with good reason.
Indigenous communities increasingly caution the ‘energy transition’ looks set to be a further wave of ‘green colonisation’ whereby their final territories, and with them their nations, are sacrificed to tackle the climate crisis to which they did not contribute.
Our Transition Mineral Tracker and Renewable Energy Benchmark have been registering rising allegations of abuse from workers and communities for the last decade. With this abuse comes protests, blockades, suspensions, delays and ballooning costs for investors and companies – threatening returns on investment but also the speed of the transition as a whole.
Witness the half billion dollar losses of Rio Tinto when its lithium mine permit in Serbia was revoked after ferocious community protest; the crippled operations and losses of Chinese MMG due to long-standing protests around Las Bambas copper mine in Peru. These are just the tip of the iceberg in a growing body of examples of community resistance to a business-as-usual approach to the energy transition. It is increasingly clear the need for an evolved business model from mining and energy companies and their investors is as urgent as the energy transition itself.
What would this look like? We have consulted with Indigenous groups, trade unions, investors and companies. They agree – these three core principles would guide a fast and fair energy transition:
- Shared Prosperity: Effective business models driving fast transitions will build trust and stability and reduce systemic risk through shared prosperity models that build worker and community rights and participation in companies’ operations and supply chains, including co-equity models.
- Duty of Care in Human Rights and Social Protection: Governments and companies have a duty of care to shield workers and communities from harm; to deliver due diligence to minimise human rights and pollution risks; and to ensure social protection, retraining and new decent work.
- Fair Negotiations: Communities and workers need guarantees that negotiations will be fair throughout operation’s life-cycles. They will include community consultation and implementation of the principles of Free, Prior, and Informed Consent (FPIC) for Indigenous peoples and peasant communities; and guarantees that workers, Indigenous and community leaders (human rights and environmental defenders) will not be silenced through intimidation or violence.
This is neither revolution or rocket science. Companies, investors and governments have the power to realise these approaches. Government action is critical to shift corporate behaviour: host and home governments need to get ahead of the tsunami of investment by adopting regulations that demands a minimum floor of responsible business behaviour as part of their green industrial policies. Better companies want this – a level playing field where they are not undercut by reckless cowboys – and other companies should, as this promises a greater chance at sustainability and long-term success in return for the massive capital investments that new transition mines and solar and wind farms require.
Finally, we need international cooperation on this urgent transition. The governments of the most powerful and energy-hungry countries need to act cooperatively to lessen the scramble for resources that drives a race to the bottom in corporate standards. North America, Europe, China, India and Brazil will shape the markets for renewable energy, their complex supply chains, and the demand for minerals. With coordination they can reduce demand for energy, increase recycling of minerals, and ensure the communities and workers in these burgeoning industries are protected and prosper, building further the public support on which our fast transition depends, and with it, our futures.
By Phil Bloomer, Executive Director and Michael Clements, Director for International Programmes, BHRRC
Just energy transition principles for human rights in business and investment
Find out more about the principles for a just energy transition