The Missing Dimension in the Debate about a Just Global Energy Transition

This post was co-authored by Elisabeth Möhle of Universidad Nacional de San Martín & Fundar think tank (Argentina), who presented in the session “Structural North-South Inequalities in Energy Transitions” at the 2025 RIFS Conference, and Germán Bersalli, a researcher at RIFS, who curated the session. 

Much of the academic debate on a just energy transition focuses on two issues: protecting workers and affected regions in industrialized economies, and mitigating local social and environmental harms in resource-rich developing countries. Both matter. Yet a third, equally fundamental question remains largely absent: whether the energy transition enables countries in the Global South to build technological and productive capabilities that support long-term development and improved livelihoods. Without addressing this dimension, the transition risks reproducing old patterns of dependency in a low-carbon form.

At different speeds, many countries are moving toward net-zero economies. Globally, even in scenarios where the transition succeeds in technical terms—through the rapid diffusion of zero-carbon technologies and sustained declines in global emissions—the structural position of many countries in the Global South may remain largely unchanged. They continue to export raw materials, import capital goods and technologies, and capture only a limited share of value along global clean-technology value chains. From a development perspective, this raises a fundamental question: can a transition be considered just if it reproduces long-standing patterns of technological dependence and, with them, persistent global inequalities in living conditions?

Debates on a just transition typically emphasize two dimensions. In industrialized economies, the focus is often placed on protecting jobs and industrial capacities in carbon-intensive regions and sectors, such as managing the phase-out of coal or protecting the steel industry in Germany. In developing countries, attention tends to concentrate on mitigating the local social and environmental impacts of resource extraction, for instance concerns related to water use and human rights in lithium mining regions in northern Argentina. While both concerns are important, they overlook a third and central issue: the capacity of countries in the Global South to build productive and technological capabilities that enable long-term economic transformation and, ultimately, improve living standards for their populations.

Productive capabilities in the South are crucial

Empirical evidence suggests that technological capabilities are closely associated with development outcomes. Comparative data on productive specialization show a strong positive relationship between the technological content of exports and levels of human development. Countries with higher shares of technologically intensive goods and services in their export baskets tend to exhibit higher Human Development Index values, while those with lower technological content are more frequently found at lower development levels.

This association is particularly relevant in the context of the net-zero economy because the energy transition involves an active and large-scale process of technological change, with the emergence of new sectors, value chains and actors that could, in principle, open a window of opportunity for countries in the Global South to alter their position in the international division of labour. However, available evidence suggests that this opportunity does not materialise automatically. In the absence of deliberate efforts to build productive and technological capabilities, many developing economies risk remaining confined to low-value segments of emerging clean-technology value chains—such as raw material extraction, basic component production or final assembly—while higher value-added activities, including design, advanced manufacturing and knowledge-intensive services (engineering, digital solutions, system integration, operations and maintenance) remain concentrated elsewhere, effectively reproducing existing patterns of technological dependence in a greener context.

China further complicates this picture. While often grouped within the Global South, it has emerged as the dominant manufacturer across almost all major clean-energy technologies. According to the IEA, China holds at least 60% of the world’s manufacturing capacity for core technologies such as solar photovoltaic (PV), wind systems and batteries, and about 40% of electrolyser manufacturing capacity — making it the world’s leading clean-tech supplier and a net exporter of these goods. This challenges the industrial leadership of advanced economies and reshapes global industrial dynamics. However, it also creates new asymmetries. For developing countries, competing with China’s scale and accumulated capabilities has become increasingly difficult, reinforcing a pattern in which lower-income countries remain primarily consumers and importers of manufactured technologies rather than producers and innovators within these key sectors.

More fragmentation or cooperation?

Against this backdrop, the global energy transition presents a strategic choice. One path leads toward fragmentation, with countries attempting to build complete clean-technology value chains on their own. This approach risks higher costs, slower diffusion and duplication of effort. The alternative is cooperation: coordinated strategies to expand technological capabilities, share knowledge and co-develop cleaner industries across regions. Cooperation can reduce costs and accelerate deployment—but it requires trust, institutional coordination and explicit recognition of existing asymmetries.

A just energy transition, therefore, cannot be reduced to emissions metrics alone. It must also create meaningful opportunities for development in the Global South. These opportunities will not emerge automatically from markets or technology diffusion. They require deliberate policy choices, international cooperation and institutions capable of supporting technological learning and productive transformation.