Finance and justice in low-carbon energy transitions

Up to $61trillion of power systems investment is needed to fulfil the Paris Agreement. The mobilisation of so much capital is a huge challenge. As such, energy policy is changing to meet the needs of commercial finance. However, very little has been done to question the justice implications of this capital mobilisation, and what alternatives there are to commercially-oriented finance for low carbon energy systems. This paper uses a comparative analysis of two developed economies to explore how 'alternative' forms of finance operate in each nation's energy investment landscape. We find alternative finance is often set in opposition to commercial capital. Alternative finance in both nations is motivated by financial justice outcomes that are poorly understood in current energy policy. Our findings suggest that 6 principles are key to 'just' energy finance: affordability, good governance, due process, intra-generational equity, spatial equity, and financial resilience. Energy policy that seeks to mobilise capital, should take account of all six principles.