Release of the ‘Coal Transitions’ report - Lessons from previous coal transitions:  a guide for decision-makers

[Press release - 26.06.2017]

Release of the "Coal Transitions" report - Lessons from previous coal transitions: a guide for decision-makers

Paris, 26/06/2017 - The stabilisation of the climate system in line with the Paris Agreement on climate change is impossible without the timely phase out of unabated coal from the global energy system. As is increasingly recognised, this transition must also be “just” for workers and local communities. In order to inform the future of coal producing regions, the Institute for Sustainable Development and International Relations (IDDRI) and Climate Strategies are today publishing a report that highlights key lessons from previous coal transitions, in the Netherlands, UK, Czech Republic, Poland, Spain and the US.

The transition out of coal is ineluctable. Climate objectives of major coal consuming countries under the Paris Agreement, local air quality and water scarcity challenges, the declining costs of renewables and energy storage, all make the phase down of global coal consumption inevitable, even with optimistic assumptions about the future of carbon capture and storage technology. Coal workers, local mining communities, and businesses which depend on coal production, all face a challenging adjustment.  

If well-anticipated, and actively managed, just transitions are possible. Given the scale of the adjustments required, it is crucial for workers, regions, and the business to anticipate and start the transition as early as possible. “A just transition for workers and mining communities means acting before the economics turns against you.  Early acceptance and anticipation can literally be the difference between ending up with 50% of adults in former mining regions unable to find work or close to full employment in the region”, says Andrzej Błachowicz, Managing Director of Climate Strategies.

Time is running short for the “just transition”. Successful transitions require time for difficult adjustments to take place as, e.g. to manage the flow of workers retraining and transitioning into appropriate alternative employment; to allow regional economies to invest in new economic activities; for companies diversify into new activities while they are still profitable. According to Oliver Sartor, Research Fellow at IDDRI, “the more time to cushion the shock and manage the change while circumstances are favourable, the better are the outcomes for everyone. But in the context of our climate policy objectives, there really isn’t a lot of time left. That means the just transition is a matter of urgency.”

The report provides key recommendations that are essential to enable a just transition. These include: forging basic consensus between stakeholders on the essential questions of “whether and why” to transition; governments using their leverage early on to promote constructive social dialogue; stakeholders developing a transition plan that they have ownership of and that reflects local circumstances. Andrzej Błachowicz highlights “Governments and stakeholders need to avoid seeing ‘just transition’ as a pure financial compensation issue. They need to invest in economic regeneration and educational opportunities for future generations.”

In purely economic terms, the costs of a managed transition are often lower than the costs of no transition.  The cost of supporting an uncompetitive industry is typically extremely high. Oliver Sartor states that “A failure to invest sufficient resources in a just transition for workers and communities can leave very high legacy costs for the government. These costs often include higher regional long-term unemployment and incapacity payments, clean-up for environmental degradation, and the transmission of social and economic disadvantages across generations.”