Introduction

Gas flaring and other forms of oil-related pollution continue to damage air quality and public health in Iraq, yet oil revenues remain the cornerstone of the country's economic activity and household incomes. This tension between economic dependence on oil and environmental harm is widely recognized, and because of this successive governments have promised to reduce flaring, clean up the oil sector, and even integrate renewables. And yet on the ground, citizens and environmental organizations contend that tangible progress in energy sector reform has been limited. The obstacles are not only technical, as they reflect deeper governance problems and raise questions of justice that sit at the center of debates on Iraq’s energy future.

Are there plausible ways out of this bind? One way to reenvision Iraq’s energy future is through the prism of a just energy transition. Proponents of a just energy transition contend that shifting away from fossil fuels must be structured to protect the livelihoods and well-being of vulnerable groups, including those communities most exposed to environmental harm.¹Siciliano, G., Wallbott, L., Urban, F., Dang, A. N., & Lederer, M. (2021). "Low‐carbon Energy, Sustainable Development, and Justice: Towards a Just Energy Transition for the Society and the Environment". Sustainable Development, 29(6), 1049-1061. In the case of Iraq, the just energy transition vision faces serious challenges. Four decades of war have led to the emergence of a political economy in which oil accounts for 90% of state revenue, much of it distributed through public sector salaries and government contracts.²Amwaj.media. "Iraq Faces Crisis as Plunging Oil Prices Highlight Bloated Public Sector", 15 April 2025 https://amwaj.media/en/media-monitor/iraq-faces-crisis-as-plunging-oil-prices-highlight-bloated-public-sector The primary beneficiaries of this arrangement are, without a doubt, the political parties and ruling elite who control oil production and the distribution of rents, in addition to the international oil companies (IOCs) that manage production. Society at large is structurally disadvantaged. Maximizing short-term oil revenues for dominant political parties has incentivized avoidance of the large long-term investments that are required to build up the necessary downstream infrastructure to reduce gas flaring and capture associated gas, not to mention the funding allocations required for basic public services. As a result, citizens live under polluted skies and experience generally poor service provision.

And yet, at the same time, society remains highly dependent on oil-funded salaries for economic security. Even those at the lowest income levels receive some benefit from the circulation of oil revenue in the system, creating a bind where citizens’ livelihoods are tied to the very structures that undermine environmental sustainability and public health. Our interviews with environmental activists for this report reveal deep ambivalence: activists are deeply concerned about oil-related pollution, and yet they also acknowledge that oil production is the main driver of economic activity in a country that is still recovering from four decades of war. Oil-backed public salaries and state infrastructure blunt resistance to the status quo of maximizing production levels, even if this economic configuration undermines other aspects of health and well-being. It is within this structural bind that just energy transition principles must be examined and reshaped for the Iraqi context.

When the documentary “Under Poisoned Skies” was released in September 2022,³BBC. "Under Poisoned Skies: Investigating Oil’s Deadly Toll in Iraq" [Documentary]. BBC World Service, 28 September 2022. https://www.bbc.co.uk/programmes/w3ct304h its coverage of a locally led investigation of oil-related pollution in Basra attracted significant attention across the country. However, the publicity did not generate widespread demands for a short-term phase-out of fossil fuels. Instead, Iraqi environmental activists used the film to press for reforms to make the oil sector more accountable and less harmful, acknowledging that oil revenue is and will remain the primary source of economic activity for years to come. Their vision aligns with a phased approach to a just energy transition. In the short term, Iraqi civil society calls for reducing environmental harm and public health impacts, particularly by ending routine gas flaring. Over the medium and long term, they stress the need for improving accountability in the energy sector and eventually building the institutional and technical capacity to integrate renewables into Iraq’s energy mix. This report emphasizes that, in Iraq, a just energy transition must begin with harm reduction in the oil sector. Achieving this will depend on greater accountability, which in turn requires opening the tightly controlled “black box” of energy policymaking to allow for transparency, intra-governmental oversight, and public participation.

The report argues that policymaking in Iraq’s energy sector in the post-2003 invasion era has become dominated by a narrow set of political and institutional actors, namely the core political party leaders and key government agencies such as the Ministry of Oil (MoO) and Prime Minister’s Office (PMO), excluding not only civil society but also critical state agencies such as the Ministry of Environment (MoEN). This concentration of authority has made it difficult to implement meaningful oversight, let alone broader public engagement. In line with what scholars have dubbed a “limited access order,”⁴North, D. C., Wallis, J. J., Webb, S. B., & Weingast, B. R.. “Limited Access Orders: An Introduction to the Conceptual Framework”, in North, D. C., Wallis, J. J., Webb, S. B., & Weingast, B. R. ed In the Shadow of Violence: Politics, Economics, and the Problems of Development, 2013. political and economic power in Iraq is controlled by a narrow cohort of actors and maintained through elite bargains and controlled access to rents.⁵Hamilton, Alexander. "The Political Economy of Economic Policy in Iraq". LSE Middle East Centre Paper Series (32), 2020. Whereas the principles of just energy transition emphasize transparency and participatory energy governance, Iraq’s limited access order has produced tight control over decision-making – from oil extraction to the rollout of renewables. While the renewable sector remains small, recent solar deals between the Iraqi government and IOCs reflect the same exclusions and lack of transparency as the oil and gas sector. We contend in this report that efforts to reduce harm from the oil sector in the short term and promote sustainability via renewables in the long term will remain stalled unless the tightly controlled energy policymaking process is opened up. This should involve intra-governmental monitoring at the very least, but ideally it would also make space for civil society inputs.

The report is structured in three sections:

• Defining a Just Energy Transition for Iraq lays out the need for a context-specific vision that is grounded in the realities of a rentier political economy and post-conflict recovery. It proposes a framework for understanding what justice means in Iraq’s energy context and focuses on health, accountability, and economic justice in the short term and energy diversification/renewables in the long term.
• Reducing Harm examines gas flaring as a central test case for short-term reform. It assesses the environmental and health costs of flaring and analyzes why meaningful progress on gas capture has remained elusive, despite repeated government commitments. The section shows how the persistence of flaring reflects the structural constraints of Iraq’s limited access order.
• Opening the Black Box addresses the governance and accountability dimensions of energy policymaking in Iraq. It argues that technical fixes alone, including gas capture, will not succeed without political reforms that allow broader participation and institutional oversight. Without meaningful inclusion of sidelined actors, including regulatory bodies and civil society, the energy sector will remain too hidden from public scrutiny for reforms to take hold.

The research draws from 60 interviews with members of civil society (e.g., environmental activists, heads of environmental CSOs), government officials from various agencies (e.g., the MoO, the MoEN, and the parliament), and energy experts. Two community consultations with civil society organizations (15 participants each) were conducted in order to establish the priorities for the research. Though the report lays out a broader just energy transition policy framework for the entire country, data collection was concentrated in two oil-producing provinces – Basra and Kirkuk – to establish connections between national policy and local conditions. Names of activists and interviews are mentioned only when permission was given. The study conforms with research ethics and the guidelines set by the Institutional Review Board at the American University of Iraq, Sulaimani.