Just Transition in Chile: Balancing climate ambition with social justice

This blog post was authored by a human with the assistance of Microsoft Copilot (GPT5), an AI writing tool, to help structure and articulate the content. It is based on research and analysis presented in the Chile Case Report - “Just Transition in Chile between environmental (in)justice and corporate co-option”. This report was produced as part of the “Just Transitions: A Global Exploration” project, funded by the Hans Böckler Foundation and led by Professor Vera Trappmann. All interpretations and summaries in this blog post reflect the original human-authored research and report. 

Chile has positioned itself as a climate leader in Latin America. In 2020, the government announced bold commitments to emissions reduction: phasing out coal-fired power plants, achieving net-zero emissions by 2050, and embedding Just Transition principles into its Nationally Determined Contributions (NDCs).  

These commitments have been upheld across political divides - from Sebastián Piñera’s right-wing government, to Gabriel Boric’s left-wing government. However, their interpretations of Just Transition (the process of shifting from a high-carbon economy to a low-carbon one in a way that is fair and inclusive to workers and communities) differ. 

Chile’s enthusiasm for decarbonisation is driven by: 

• Energy security: Reducing dependence on volatile fossil fuel imports 

• Economic opportunity: Leveraging abundant solar and wind resources to attract investment in renewables and green hydrogen 

• Climate leadership: Enhancing its global reputation as a sustainability frontrunner. 

However, this transition unfolds against a backdrop of deep structural inequalities. Decades of neoliberal policies since the Pinochet era have left Chile with a highly flexible labour market, weak unions, and limited social protections. These conditions amplify the social risks of rapid decarbonisation. 

What did the research examine? 

Our study analysed policy documents on decarbonisation and Just Transition, produced by labour and state between 2019 and 2025. We also conducted a series of 31 interviews with trade union leaders, government officials, NGOs, coal power workers, and academics. 

The goal was to understand: 

• How organised labour (i.e. workers joined through membership of trade unions) engages with climate policymaking 
• The constraints unions face 
• Labour perspectives on Chile’s Just Transition agenda. 

Key findings 

1. A top-down transition 

Chile’s Just Transition strategy is largely state-driven. While the government promotes participatory governance, unions report that dialogue tables are often symbolic, with little influence over decisions. Company-level unions - especially in coal power - were excluded from key forums, despite being directly affected by plant closures. 

2. Diverging visions of justice 

Stakeholders in Chile hold sharply different views on what a ‘just’ transition should prioritise, reflecting tensions between broad socio-environmental goals and the immediate needs of workers. 

• Government & NGOs advocate for a Just Socio-Ecological Transition - a broad agenda addressing climate change, biodiversity loss, and pollution in “sacrifice zones.” Worker retraining is a minor component. 
• Labour (Central Unitaria de Trabajadores de Chile (CUT)) supports environmental goals but criticises the lack of focus on job security, income stability, and long-term career prospects for displaced workers. 
• Coal sector unions prioritise immediate protections - compensation, retraining, and maintaining work related benefits such as pay, pensions and health care - over broader socio-environmental reforms. 

3. Structural barriers to labour influence 

Historic legal restrictions and fragmented union structures severely limit labour’s ability to shape climate policy, leaving workers with little voice in the transition. 

• Legal constraints: Pinochet-era labour laws limit collective bargaining to the company level and restrict strikes 
• Organisational weakness: Union fragmentation (i.e. tiny unions) and reliance on subcontracted labour means high levels of labour market churn, making unions ephemeral and organising more difficult 
• Cultural factors: Climate change has low direct relevance among workers; they do not yet view it as a threat to jobs. 

4. Perceived corporate co-option 

Unions fear that the green transition is being hijacked by business interests to maximise profits. Reported tactics include: 

• Intensifying workloads 
• Avoiding environmental remediation costs through early closures 
• Offering less favourable contracts in renewables 
• Using automation to cut labour costs. 

There is also a perception that Chile’s transition serves European decarbonisation goals, reinforcing historical patterns of resource dependency whereby peripheral states provide the raw materials needed for economic core countries to decarbonise their economies at great socio-environmental cost. 

5. Labour’s proposals 

In response, CUT is calling for a people-centred transition - one that prioritises decent work, stronger regulation, and tangible benefits for communities. They call for: 

• Companies to be held to accountable for the problems (pollution, poor health outcomes) in the “sacrifice zones” i.e. not just allowed to close down and walk away 
• Higher environmental taxes on carbon and pollutants to fund remediation and social programs 
• Public investment in retraining to deliver good jobs with comparable terms and conditions to those being lost 
• Energy as a public good, not a commodity - calling for stronger state control over energy planning 
• Community benefits, such as lower energy bills and improved health in polluted areas. 

Coal unions, by contrast, focus on securing compensation, pensions, and job guarantees for affected workers. 

Implications for business and policy 

For policymakers and business leaders, Chile’s experience offers critical lessons: 

• Inclusive governance is key: Genuine participation of labour in transition planning can help prevent conflict and build trust 
• Budgetary allocation is crucial: Just Transition is about more than just dialogue - without financial support from states and businesses robust social protections will be impossible and this risks backlash which undermines climate goals 
• Corporate accountability is essential: Without strong regulation, sustainability agendas risk becoming vehicles for profit extraction rather than social progress. 

Looking ahead 

Chile’s Just Transition journey illustrates both the promise and pitfalls of aligning climate ambition with social justice. While the government’s expansive vision of a Just Socio-Ecological Transition is laudable, its success hinges on integrating labour’s demands to ensure that workers are not the collateral damage of decarbonisation.  

For other nations embarking on similar paths, Chile underscores the need for integrated strategies that combine environmental integrity with economic fairness. 

Read the report.