The global electrification and energy transition from fossil fuels to renewable energy is currently taking place at the expense of low-income countries, Oxfam writes in a new report titled Unjust Transition: Reclaiming the Energy Future from Climate Colonialism.

The report describes how countries in the global South hold roughly 70 percent of the world's minerals reserves required for the energy transition, but that the majority of the investments in renewable energy are actually concentrated in the global North (50%) and China (29%). In comparison, only 3 percent of global investments in fossil-free energy went to countries in Latin America, while countries in Southeast Asia, the Middle East and Africa received only 2 percent each – and this despite the fact that the need for electricity is greatest in these poorer regions. The report also notes that the profits from the energy transition are largely falling into the hands of the richest 1 percent, such as Elon Musk, the world's richest man.

“The richest countries and super-rich individuals are driving the climate crisis to its current tipping point, over-consuming the carbon budget through deeply unequal and extractive systems. Now they are trying to capture and control the energy transition at the expense of the poorest and most climate-vulnerable countries, driving up inequality further,” said Oxfam Executive Director Amitabh Behar. “A truly just transition starts with an end to the patterns of injustice, misrule and excess.”

Oxfam describes it as a repetition of old colonial patterns in which the extraction of minerals often involves forced labour, violence, and extensive damage to the environment. In addition, the rights of indigenous peoples are being threatened, and many projects seize their land.

“Communities across the Global South are having their lands seized, water depleted and rights trampled in the name of the green transition – not only through transition minerals extraction, but also through large-scale renewable energy deployment, and false climate solutions such as biofuels, carbon markets and gas, that often bring them harm rather than benefits.”

“Addressing inequality and colonialism in the transition offers an opportunity to radically reshape the energy landscape” said Behar. “We must support them so that the transition stops serving profit and starts serving life.”

“The energy transition offers a rare chance to rewrite the script – to move beyond extractive models and build an energy system rooted in equality, justice, care and collective prosperity. With the right choices, power can be restructured, ensuring that all countries and all people transition on fair and equal terms. This moment can be a turning point, but only if governments confront structural inequalities shaping the transition.”

Oxfam therefore recommends policymakers to prioritize global cooperation and solidarity, and to adopt “a new decolonized and decentralized energy system” which corrects the “historical power imbalance” by:

Adopting a public-first financing approach to climate and development goals and rejecting the ‘Wall Street Consensus’ model where public money is used to guarantee private profits.
Rich polluting individuals, companies and countries need to recognize their responsibility for the climate crisis and pay for the damage.
Radically reforming international tax, trade and financing models to unlock current barriers for the just energy transition in Global South countries. These tools include domestic value addition, technology transfer and industrial sovereignty.
End exploitative practices and uphold labour rights and human rights in the energy transition, including recognizing the land rights and sovereignty of Indigenous peoples.