There can be no transition without a just transition

Delegates will gather in New York this week for the UN General Assembly’s Summit of the Future and to attend the more than 600 side events at New York Climate Week to accelerate the race to net zero. As they gather, the recent words of the UN Secretary-General must ring loudly in their ears: “The race to net zero cannot trample over the poor. The renewables revolution is happening – but we must guide it towards justice.”

A transition to a low-carbon future is underway. 196 countries have signed The Paris Agreement, and 124 have set a target of net-zero GHG emissions by 2050. More than 16000 companies, totaling more than US$ 53 trillion of market capitalization, have pledged to decarbonize by mid-century. This is an unprecedented gift to extractive industries. Honoring these public pledges requires the massive deployment of renewable energies (RE), energy storage/batteries, and electric vehicles (EVs) and will, in turn, explode the demand for so-called “Critical Energy Transition Minerals” and metals such as copper, cobalt, and lithium. Copper demand could double by 2040, and published net-zero commitments would require as much copper over the next 25 years as has been sourced in the last 5000 years! Demand for cobalt could also double over the next five years and lithium could require potential increases as high as 40 times current demand by 2050. This rush to decarbonize should also be a once-in-a-century opportunity for the Democratic Republic of Congo (DRC) - the producer of over 70% of the world’s cobalt and one of the largest producers of copper, given that the combined value of DRC’s reserves is estimated at US$750 billion – and yet they stand to lose as much as they stand to gain.

Those of us who gathered in Lubumbashi, the heart of the Copper Belt and the venue for Congo Mining Week in June 2024, would like to believe that we are creating a magical “win-win” by facilitating profits for mining companies while delivering prosperity to the Congolese people. Indeed, the language commonly heard amongst diplomats and mining executives gathered at the dizzying array of official events and cocktail parties was of “benefit sharing”, foreign direct investment, and sustainable development. Extractive industries are essential to the modern world through the creation of goods, services, and innovations; driving economic development and job creation; funding public services like healthcare and education; and building infrastructure, whether roads or wind turbines. The reality outside the colonial compounds is that the DRC is instead being stripped bare by a brutal form of extractivism, and that is why it is incredibly important for us to understand that there cannot and will not be a successful transition to a low-carbon future, without us transitioning in a just manner.

A just transition cannot be powered by extractivism

Extractivism is a mode of accumulation based on concentrated mass-scale removal of resources primarily for export. While foreign investors and consumers prosper, the local communities are left with severe environmental degradation, human rights abuses, social inequality and extreme poverty. DRC has suffered more extractivism than perhaps any other nation on Earth. Belgian King Leopold personally owned the nation for 23 years, brutalizing the citizenry, enslaving the population, and stripping DRC of its rubber and ivory to fund his personal projects. Millions of Congolese died from punishment or malnutrition. Although the context of “ownership” has changed, the Congolese people continue to similarly suffer due to the insatiable appetite of foreign entities for transition minerals and metals.

Less than 10% of the total value generated from mining remains in the DRC. There are many reasons for this including the domination of foreign companies in local joint ventures; limited local value addition due to a lack of domestic refining and processing industries; low official taxes, royalties, and export duties; tax avoidance and evasion; endemic corruption and governance challenges in both the public and private sectors; and poor labor conditions including low pay and lack of benefits. One mine that generated US$4 billion in revenues over eleven years, distributed only US$ 24 million to the local community. Another prominent western mining company generated US$34.1 billion from its assets in DRC, paying its shareholders $7.1 billion, while its miners earned less than US$28 million, which is about 0.1% of the company’s profits. Some workers earn as little as $0.78 per day.

The result is that GDP per capita in DRC stood at US$577 in 2022, and more than 70% of its population lives below the international poverty line with limited or no access to education, healthcare, and sanitation. In addition, while DRC powers the growth of renewable energy in the global north, only 21% of its own people have access to electricity. Compare this with Chile, the largest producer of copper in the World, which retains up to 50-60% of the total revenue from mining activities; or UAE, the holder of the seventh-largest proven oil reserves?in the world, which retains between 60-80% of the wealth from oil extraction.

While DRC is an egregious example of extractivism, it is not the only one. One recent calculation estimated the drain from the global south to north at a staggering US$10 trillion a year in embodied raw materials, land, energy, and labor.

Guiding the renewables revolution towards justice

In its infancy, the concept of just transition focused on sunsetting from fossil fuels while protecting workers and communities. Today, a just transition demands that, as we sunrise into a new 21st-century climate economy, we must avoid repeating patterns of inequality, structural discrimination, and colonialism. This involves a focus on human rights and shared prosperity whereby:

• Communities are rightfully seen as shareholders who own their resources. They are not considered as beneficiaries waiting for the crumbs from overseas development assistance and corporate social responsibility.
• These communities have equal voice and veto in a formal process of social dialogue. They are not just stakeholders to be engaged with as part of a disclosure checklist.
• Transparency and accountability are promoted as levers to ensure sustainability in the collective wealth from extractive industries. More accountable companies can be rewarded by a better social license to operate, whereas a more accountable state can elicit great trust from its citizens, making its administration more effective.
• Environmental Human Rights Defenders are protected and supported in their efforts through formal recognition of their role by companies and governments. Strict protection policies exist, including guidelines in the use of legal force in the context of extractive industries/adherence and implementation of voluntary principles on security and human rights.
• Communities ultimately retain more of the wealth from transition minerals and metals through more local ownership of mining operations; higher royalties and taxes; mandating local content policies and value addition; encouraging industrialization around local refining and processing; and policies to improve sustainable resource management.

Decarbonization must create shared prosperity not 21st-century colonialism

The onus to reverse this trend is a joint responsibility of several key actors. First, the Government of DRC should ensure that a far greater and more impactful percentage of revenues remain in DRC to the benefit of the people. To this end, DRC will require massive corrective action, including substantial improvements in domestic governance, transparency, and accountability to enable it to effectively absorb and utilize an increase in mining revenue. Second, the international companies that continue to extract DRC’s resources must concurrently implement policies aimed at improving the lives of ordinary citizens and be held accountable by their stakeholders and investors. Third, the international community, including INGOs and bilateral and multilateral partners, must no longer legitimize and abdicate responsibility for the continued unequal treatment of Congolese in the competition to secure more critical minerals than their geopolitical foes; and finally, end-users must become much more aware of the source of their products.

The seven voluntary guiding principles published last week by theUN Secretary General’s Panel on Critical Energy Transition Minerals are a welcome first step but we as a global community must do more to ensure that the benefits of resources are shared equitably with the communities in the Global South.

In the words of Mary Robinson, "The race to net zero cannot trample over the poor.?We must ensure that the extraction of critical minerals from the Global South benefits the local communities and does not repeat the injustices of the past."

Authors

Susan Marx is Director of the Human Rights Program at The Carter Center. [email protected]

Edward Cameron is an independent consultant working with governments, international organizations and multinational corporations. [email protected]