Just Energy Transition Partnerships (JETPs) are a new plurilateral structure for accelerating the phase-out of fossil fuels. These intergovernmental partnerships coordinate financial resources and technical assistance from countries in the Global North to a recipient country to help it in this regard. To date, JETPs have targeted emerging economies that produce and consume coal on a large scale.
The terms “just” and “partnership” are central. The use of “just” underlines that the energy transition must be implemented in an equitable and inclusive manner with regard to its social consequences. In affected populations and sectors, retraining and alternative business models not based on fossil fuels are to be created for this purpose. The use of “partnership” emphasizes that these agreements are tailored to the needs of the recipient country and that local decision-makers are actively involved.
The first JETP for South Africa, worth about $8.5 billion, was announced at COP26. Two more were announced for 2022: $15.5 billion for Vietnam and $20 billion for Indonesia. In addition, there have been proposals for JETPs for other countries. To date, JETPs are primarily funded by France, Germany, and the United Kingdom, United States, and European Union, but development banks and a range of other international actors are also involved. Financing combines public and private grants, loans, and investments.
Countries with large coal industries and long-term economic growth are particularly eligible for JETPs. The financing of renewable energy infrastructure enables an earlier coal phase-out. This should prevent further fossil fuel expansion and avoid future emissions. These agreements can also help fulfill the Global North’s promise to mobilize $100 billion in annual climate finance while creating a green investment alternative to China’s Belt and Road Initiative.