A Just Energy Transition in Six Oil- Producing Regions: Bringing Local Priorities to Global Climate Action
Colombia, Ghana, Mexico, Nigeria, Peru and Tunisia
Key messages
- Global oil demand is expected to peak by 2030, and all countries—including low- and middle-income producers—will need to transition away from fossil fuels, with richer countries going first. For oil-dependent economies, the imminent peak in demand poses major risks of loss of revenue and jobs, and unintended socioenvironmental impacts, which might be more heavily felt at the subnational level, widening preexisting social and environmental injustices rooted in the fossil economy. Significantly, these risks are already materializing in many oil-producing regions in the global South.
- Yet many national and subnational plans in these countries still overlook how to manage the transition beyond oil, leaving countries unprepared.
- A people-powered, just transition in oil-producing regions could provide the means to address these major equity and justice gaps, while also opening opportunities for people and the planet. It could protect local economies and the rights of those most affected by the decline in oil production: workers in both formal and informal sectors, women, youth, Indigenous Peoples, people with disabilities and the environment.
- A people-powered, just transition in oil-producing regions would allow climate action to be rooted in the demands and needs of local stakeholders, boosting local and national coalitions in support of international agreements, and to influence them.
- National and subnational governments should define comprehensive plans to build fiscal resilience and reduce oil dependency, while ensuring local economies diversify. The visions and priorities of citizens and communities, especially in oil-producing regions, should be included in those plans through participatory processes and multistakeholder dialogue. The international community must provide the technical and financial support needed to help build resilient economic and energy systems beyond oil. Diversification of oil-dependent regions should be part of the just transition agenda.
- National governments, companies and private investors should establish and enforce requirements for a responsible exit in oil-producing countries and regions, involving the active engagement and participation of local authorities and communities. This includes policies and practices around decommissioning, asset transfers, rehabilitation, funds for decommissioning and transition, and socioenvironmental liabilities. Affected communities should be included and compensated, and nature should be protected. A responsible exit should be part of the just transition agenda.
- A just transition in oil-producing regions requires that national and subnational governments, and the international community, provide support to formal and informal workers, women, youth and other often-marginalized groups, to ensure they have the skills and the technical and financial resources to thrive in the process of transitioning away from oil. This means ensuring not only that they benefit from transition policies, but that they have the resources and spaces to be agents for change.
In the current urgent need to address climate change, shifting to clean energy and more sustainable economies is central to the required effort. The energy sector is currently responsible for approximately three quarters of greenhouse gas emissions. In this context, international instruments such as the 2015 Paris Agreement commit countries to “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”
Most commitments and climate negotiations have focused on emission reductions. However, this started to change with the adoption of the Glasgow Climate Pact at the 2021 United Nations Climate Change Conference (COP26). Countries committed to transition towards low-emission energy systems, “including by rapidly scaling up the deployment of clean power generation and energy efficiency measures, including accelerating efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies, while providing targeted support to the poorest and most vulnerable in line with national circumstances and recognizing the need for support towards a just transition.”
A people-powered, just transition in oil-producing regions could protect local economies and the rights of those most affected by the decline in oil production.
This was further reinforced at the 2023 United Nations Climate Change Conference (COP28), when governments committed to “transition away from fossil fuels in a just, orderly and equitable manner.” Although further policy commitments have since been difficult to advance, market shifts demonstrate that the transition in fossil fuel demand is already in motion. Technological progress has pushed private investments in the clean energy sector up by 42 percent.
Whether the transition becomes an opportunity for shared prosperity or a source of new inequalities depends on how it is governed.
Yet in several oil-producing countries and regions, these global shifts and their implications are still not widely understood or integrated into policy discussions, and international dialogue and actions do not recognize the needs of local stakeholders in these regions. This also relates to the fact that the increased investment in the renewable energies sector remains unequally distributed—for example, with only 2 percent landing in Africa, due to policy volatility, ineffective financing mechanisms and high capital cost. Yet Latin American countries—especially Brazil, Colombia and Costa Rica—have seen a 25 percent increase in clean energy investments in 2025.
This inconsistency has allowed many oil- and gas-producing countries to remain under the radar in transition debates. The unique challenges and specific needs associated with moving away from oil and gas have not received adequate support. Gaps in research have contributed to a lack of understanding and information about the risks and opportunities for oil-producing regions. More recent research has started to recognize the need for finance to support just transitions in the oil and gas sector, and to move beyond coal. The latest Just Transition Report from the United Nations Framework Convention on Climate Change (UNFCCC) suggests that policy-makers need to address future changes in oil and gas demand. However, processes are not as mature as for coal, and tend to focus on labor and energy access without considering other challenges in producing regions.
This policy brief outlines the critical importance of a just energy transition for oil-producing countries, and identifies risks for local actors, as well as gaps in subnational, national and global policies. It explains how a transition from oil to renewable energy sources can be an opportunity for people and the planet, and provides actionable recommendations to achieve a balanced and equitable approach.
The recommendations of this brief were informed by a mix of desktop research and an in-person meeting in Cartagena, Colombia, in July 2025, with delegates from oil-producing regions in the global South, as well as a meeting during NY Climate Week in September 2025. The brief profiles six oil-producing countries in the global South—Colombia, Ghana, Mexico, Nigeria, Peru and Tunisia—to identify general trends in the transition process, as well as context-specific factors.
Authors
Ana Carolina González Espinosa
Senior Director for Programs and Latin America Director
