ISLAMABAD, Nov 5 (ABC): Accelerating the global transition away from fossil fuels will require practical strategies for economic diversification, workforce development and clean energy investment. As governments gather for COP31, attention is shifting towards addressing the financial and social challenges of the energy transition.
The climate summit, scheduled for November 9–20 in Antalya, Türkiye, is expected to focus on implementing national emissions-reduction commitments. It will also provide an opportunity to address the needs of countries and communities that depend on coal, oil and gas.
The European Union’s formal negotiating position calls for faster implementation of national climate commitments and an accelerated transition away from fossil fuels in a “just, orderly and equitable” manner.
The EU also supports wider electrification through clean power and stronger implementation of the UN Mitigation Work Programme.
On financing, EU conclusions adopted ahead of the summit reaffirm the COP29 goal of mobilising at least $300 billion annually for developing countries by 2035.
Under the agreement reached in Baku, developed countries are expected to take the lead. Meanwhile, the EU has emphasised the importance of expanding public, private and concessional financing.
Experts say the transition will require different approaches across countries and regions because their dependence on fossil fuels varies considerably.
These differences affect employment, government revenues and opportunities for industrial development, making locally appropriate transition strategies essential.
Economic diversification essential for fossil-fuel-dependent regions
Dr Sandeep Pai, Senior Lead for International Energy Transitions and Executive in Residence at Duke University’s Nicholas Institute for Energy, Environment & Sustainability, told Wealth Pakistan that just-transition policies should primarily reflect national and regional economic conditions.
He explained that coal-dependent regions faced particularly concentrated employment challenges. In contrast, economies relying on oil and gas revenues could face greater fiscal pressures as global energy systems change.
“If it is about job creation, each of these regions will have to have an economic-diversification-focused policy,” Pai said.
According to him, coal-producing regions with mines and power stations would need alternative industries and employment opportunities before existing facilities closed.
Such strategies could help workers and communities adjust to changes in energy production while maintaining local economic activity.
For countries dependent on oil and gas revenues, the challenge would be different.
These economies would need to manage potential declines in government income while using existing resources to invest in longer-term economic diversification.
Pai said clean energy investment could support a just transition. However, renewable energy projects alone would not necessarily replace the economic activity lost in fossil-fuel-dependent regions.
New clean energy investments might also emerge in locations different from existing coal, oil and gas industries.
Therefore, broader industrial development and supply-chain diversification would be important for protecting affected communities.
International financing could support these efforts by reducing investment risks and providing resources for worker retraining, local economic diversification and transition planning, he added.
Climate finance crucial for Pakistan’s energy transition
For developing economies such as Pakistan, affordable climate financing will be essential for reducing emissions while addressing adaptation needs and climate-related losses.
Dr Omais Abdur Rehman, Senior Associate in Renewable Energy Technologies at Renewables First and Lead Coordinator for the Pakistan Renewable Energy Coalition, told Wealth Pakistan that climate finance needed to address both energy transition costs and the growing economic burden of climate impacts.
He said developing countries facing debt and fiscal pressures required greater access to grants and highly concessional financing.
Such support was particularly important for adaptation and resilience projects that might not generate conventional commercial returns.
Rehman also called for clearer rules governing international climate-finance commitments.
These should include transparent eligibility criteria, disbursement procedures and accountability mechanisms to ensure that announced financial support translated into actual funding.
Pakistan’s latest Nationally Determined Contribution (NDC 3.0) highlights the scale of the financing challenge.
The country has set an indicative target of reducing greenhouse gas emissions by up to 50% below the projected 2035 baseline.
This includes an unconditional reduction of 17 percentage points and a further 33 percentage points conditional on international financial assistance, technology transfer and capacity-building support.
The targets demonstrate the importance of international cooperation in helping Pakistan pursue its climate commitments.
Clean energy investment offers opportunities for sustainable growth
Rehman said Pakistan also needed to strengthen its domestic capacity to attract and utilise international climate financing effectively.
He highlighted the importance of improving financial regulations, project preparation and institutional capabilities.
According to him, the country should translate its priorities in energy, transport, agriculture and other sectors into credible, finance-ready programmes.
Such measures could help Pakistan attract investment while ensuring that climate financing supports measurable economic and environmental outcomes.
Rehman also identified emerging opportunities in solar power, battery storage and electric mobility.
These technologies could attract transition financing and support cleaner economic growth, provided the government established coherent policies and commercially viable investment programmes.
Experts believe that implementing fossil-fuel transition commitments will require more than expanding renewable energy capacity.
Governments will also need policies that protect affected workers, encourage economic diversification and improve access to affordable financing.
COP31 therefore provides an opportunity to move beyond broad commitments towards practical implementation.
National transition strategies, stronger international financial cooperation and investment in new industries could play important roles in shaping the next phase of global climate action.
For developing economies such as Pakistan, progress on these fronts could strengthen energy security, attract clean energy investment and create sustainable economic opportunities while supporting national and international climate objectives.
