Economic necessity drives decarbonisation shift

As the world pursues decarbonisation, the concept of a ‘just transition’ has become common, especially for describing the shift from fossil fuels in developing economies. Emissions targets are seen as the main drivers of this energy transition. But decarbonisation is not always a planned emissions-reduction pathway.

Economic Necessity Drives Change

As renewable energy becomes more affordable, many developing nations are viewing the shift away from fossil fuels as essential for their economic stability and energy independence. Ethiopia’s recent actions illustrate this trend. In January 2024, the country imposed an immediate ban on importing petrol and diesel vehicles.

This decision was primarily aimed at cutting the annual expenditure on fossil fuel imports, which exceeded $5 billion and significantly drained the nation’s limited foreign currency reserves. It seemed economically impractical to continue relying on costly fuel imports for transportation, especially while constructing Africa’s largest hydroelectric dam.

Chinese electric vehicles (EVs) quickly filled the market gap. The streets of Addis Ababa are now full of BYD cars. Tax exemptions and import duty waivers for EVs, plus rising costs for used petrol cars, have sped up this shift. The Grand Ethiopian Renaissance Dam, opened in September 2025, produces enough surplus hydropower to power these EVs cheaply.

Disruption Through Opportunity

In Ethiopia, economic and energy-security concerns, not a formal emissions plan, caused this rapid decarbonisation. A similar pattern appears in Pakistan.

The country’s fast adoption of solar power was driven by factors that created an opportunity for change, not green advocacy. In 2022, a massive flood left roughly one-third of Pakistan under water. It caused more than $30 billion in economic damage. This strained government budgets and reduced household incomes.

With energy costs rising, Pakistan needed an alternative to diesel generation. China had surplus solar panels, and the US had imposed import restrictions. Pakistan used China’s discounted panels to adopt renewable generation quickly. Between December 2021 and December 2025, the share of Pakistan’s electricity from solar increased five-fold.

Justice in Crisis-Driven Action

South Africa has long pursued emissions reduction, but it was an affordability crisis that ultimately spurred broad decarbonization. These nations are transitioning from fossil fuels largely due to economic pressures rather than solely focusing on cutting emissions.

However, the issue of fairness remains critical. In South Africa, lower-income households represent a smaller portion of the approximately eight gigawatts of installed rooftop solar capacity, highlighting the high initial costs. Decarbonization driven by crises still requires measures to enhance affordability.

Policymakers often emphasize a ‘just transition’ to advocate for decarbonization, but their efforts should prioritize systemic transformation. Recognizing that structural and economic factors primarily drive solar adoption in South Africa and Pakistan, or electric vehicle uptake in Ethiopia, could lead to more effective strategies.