Just Transition Funding Mechanisms: A Study on International Cases

In the context of global climate governance, the just transition has become a core issue, yet existing research on its funding mechanisms remains wanting. There is a lack of systematic analysis of domestic funding mobilization and the role of public finance. To address this gap, this paper defines the concept of just transition funding mechanisms and focuses on the design of these mechanisms at the national level. This study finds that as of June 2025, among the 65 countries that have committed to a just transition, developed countries have generally established corresponding funding mechanisms, while developing countries have made only limited progress, reflecting a gap in funding actions between the two. Comparative analysis indicates that in terms of funding objectives, developed countries tend to focus on regional balance, whereas developing countries tend to prioritize energy security and economic development. Regarding funding allocation, developing countries tend to concentrate on the energy sector, with inadequate support for social and economic diversification. In terms of funding sources, public sector funds dominate in all countries, but a combination of public and private funding can significantly boost financing scale. Concerning investment instruments, developed countries predominantly use fiscal allocations and concessional loans, while developing countries rely on non-concessional loans, and as such bear high financing costs and face debt sustainability challenges. Drawing on these findings, this paper provides a source of reference for policymakers seeking to establish just transition funding systems in different countries.