Principles and best practices for a Just Transition for Canada’s fossil fuel workers

Economist Jim Stanford has written a timely new report which should be required reading for politicians setting their hair on fire about Joe Biden’s stated intention to cancel the Keystone XL pipeline project on Day one of his presidency.  Employment Transitions and the Phase-Out of Fossil Fuels, released on January 18, argues that “the actual number of fossil fuel jobs and the number of communities reliant on the industry is small enough that a just and equitable transition plan for workers is very feasible” – and the key is timing.

Stanford’s report begins by setting out the statistics regarding fossil fuel employment in Canada: “under 1% of total payroll employment in Canada (or about 160,000 jobs) is located in seven industrial sectors which together comprise most of the composite fossil fuel industry. “ Using 2016 Census data, the report discusses the distribution of fossil fuel jobs by province and community, showing that Alberta  accounts for 75% of fossil-related jobs in 2016, but even there, only it accounts for  7% of all provincial employment. 18 fossil fuel-dependent communities are named, where fossil fuel jobs account for 9.5% of employment – including two well-known examples, Wood Buffalo/Fort McMurray in Alberta and Estevan in Saskatchewan.  The report continues to compare employment in the fossil fuel industry and in the health care sector, Canada’s largest employer. The aim is not to diminish the importance of fossil fuel employment, but to illustrate that employment possibilities exist in other sectors, even within fossil fuel-reliant communities.

Stanford looks ahead and states: “given weakening global demand for fossil fuels, depressed prices, continued infrastructure constraints, and aggressive cost-cutting by fossil fuel employers (shedding labour to protect profits despite lower energy prices), fossil fuel industries will see continued downsizing of their employment footprint.”   He summarizes the employment transitions of other sectors in Canada’s history, notably fisheries, auto manufacturing, manufacturing – as well as other sectors currently transitioning, including retail, transportation, and newspapers and media, and documents the overall dynamics which are always churning labour markets. All these arguments build to the report’s final section, which is to outline the principles and best practices for planning effective employment and community transitions for the inevitable decline of fossil fuels. 

Principles and Best Practices for Transition

Repeating a point he made in a similar report about Australia, Stanford speaks out for younger workers: “Fossil fuels will disappear as a major source of energy within the foreseeable future. Given that reality, it is unhelpful, and indeed cruel, to encourage more workers – including some just entering the workforce – to try to build their livelihoods in an industry that will soon disappear.”

And further

 “ …in an effective, orderly labour market transition….. Most fossil fuel workers will not end up producing solar panels or windmills; in fact, if we manage this transition effectively, most fossil fuel workers will not need to find new jobs at all. As with the climate itself, the sooner we start this transition, the lower its ultimate costs will be, and the greater its net benefits. Delaying these necessary actions only makes matters worse – including for fossil fuel workers. In this context, statements of supposed “solidarity” with fossil fuel workers expressed by some business leaders and political representatives are entirely dubious. Pretending that fossil fuel industries can carry on as “normal” for decades to come (or worse could actually be expanded) is a cruel hoax.”

Employment Transitions and the Phase-Out of Fossil Fuels  was published by the Centre for Future Work, which is a project of the Australia Institute – which also operates in Canada in collaboration with the Canadian Centre for Policy Alternatives, housed in the CCPA’s Vancouver office.   The report was commissioned by Environmental Defence Canada, which released its own graphically-enhanced summary version, Steady Path: How a transition to a fossil-free Canada is in reach for workers and their communities . 

Newfoundland government primes the pump with funding for offshore oil ahead of February election

Newfoundland and Labrador Premier Andrew Furey has called a  provincial election for February  13 –and according to a CBC report, one reason for the quick timing is to get ahead of the forthcoming Interim Report of the provincially-appointed Provincial Economic Recovery Team (PERT), scheduled for late February. The PERT is also called the Greene team for its chair, Dame Moya Greene, who brings a business background, having previously been head of Britain’s Royal Mail and Canada Post, as well as positions at TD Securities, CIBC and Bombardier. Another CBC article highlights that the economic report is going to be a controversial election issue, and discusses the January withdrawal from the team by Mary Shortall, president of the Newfoundland and Labrador Federation of Labour. Shorthall called the exercise “window dressing” , and stated: “I can say that the lack of transparency, top-down approach, rushed timeline, lack of real collaboration and an overall feeling that not all perspectives were being considered, or appreciated, are the overarching themes for my decision”.  Shortall’s departure is also discussed in an article in The Independent .

Another key election issue is likely to be the role of the oil and gas industry in the Newfoundland economy. The election announcement was preceded by a series of provincial funding announcements: on January 14, a government pledge of  $175 million funding as well as royalty incentives to Suncor to prop up the Terra Nova Offshore oil field; $38 million  for the Hibernia offshore project in December 2020; and $41.5 million for Husky Energy’s  White Rose project – all of which are funded by $320 million of federal funds, announced in September 2020. (Note that Husky Energy laid off workers at one of the worksites just days after the funding was announced) .

On January 12, the  Environment and Climate Change Minister issued his decisions under the Impact Assessment Act, allowing Chevron Canada, Equinor Canada, and BHP Petroleum to drill exploratory wells offshore from St. John’s – although further permits will be required, as explained in this new “Toolkit” regarding the process from the East Coast Environmental Law .  Provincial approval is likely to be forthcoming, given the pro-industry views expressed by the provincial Oil and Gas Recovery Task Force appointed in October 2020 to distribute the federal funding. Reflecting this favourable environment, Equinor announced that it is consolidating its Canadian offices and moving staff from Calgary to St. John’s, according to a Financial Post report (Jan. 12) .

A Just and fair transition from fossil fuels in Australia

In a new report published in December by the Centre for Future Work at the Australia Institute, author Jim Stanford argues that Australia’s labour market could transition away from fossil fuel jobs without involuntary layoffs or severe disruption to communities—if governments plan a fair transition which includes: a clear, long-term timeline, measures to facilitate inter-industry mobility and voluntary severance as fossil fuels are phased-out, and generous retraining and diversification policies. Fossil fuel jobs, though only 1% of jobs in Australia, have higher than average compensation, so in order to be attractive, alternative jobs must have decent compensation, stable hours and tenure, and collective representation.  Employment aspects of the transition from fossil fuels in Australia echoes a recent New York Times article about the career disappointment of young oil and gas workers, with this: 

“Far from being ‘supportive’ of fossil fuel workers by attempting to disrupt and delay appropriate climate transitions, in fact is does them a great disservice to pretend that these industries have a long-term viable future. It seems a cruel hoax to encourage young workers to begin their careers in industries with an inevitably short time horizon. It would be more compassionate and honest to give fossil fuel workers (both current and prospective) fair notice of the changes coming, and support them in building careers in occupations and industries that are ultimately more promising.”    

 Author Jim Stanford, formerly with Canada’s Unifor union, now splits his time between Canada and Sydney, where he is director of the Australia Institute’s Centre for Future Work. He and the Centre are profiled in “The People’s Economist” in the Australian magazine In the Black. This research was commissioned by Australian health care industry super fund HESTA.

Climate Change Accountability Report shows rising emissions – B.C. government announces new GHG reduction targets

The government of British Columbia issued a press release on December 15 2020,   announcing new carbon reduction targets and the release of the first-ever Climate Change Accountability Report , highlighting progress on the CleanBC action plan.  From the press release: “The new emission target requires greenhouse gases in B.C. to be 16% below 2007 levels by 2025. It provides a benchmark on the road to B.C.’s legislated emission targets for 2030, 2040 and 2050 of 40%, 60% and 80% below 2007 levels, respectively. The Province will also set sectoral targets, which will be established before March 31, 2021, and will develop legislation to ensure B.C. reaches net-zero emissions by 2050.”

“Climate Change Accountability Report discloses that B.C. carbon emissions rose three percent in 2018” in The Straight  (Dec. 16) highlights some findings which the government downplayed – for example,  in 2018, “Gross emissions reached 67.9 million tonnes. That’s up a whopping 7.3 million tonnes from 2010, which went unremarked in the report.” The article also quotes from an interview with Environment and Climate Change Strategy Minister George Heyman, pointing out that “Heyman also admitted that the government has never done any modelling of carbon emissions that goes beyond LNG Canada’s phase one portion of its plant in Kitimat.”

The response by the Sierra Club B.C. summarized the reactions of environmental advocacy groups, which commended the government for the transparency of the Climate Accountability Report, while criticizing the fossil-friendly policies which have led to missed GHG reduction targets.   Reiterating the long-standing criticisms over LNG, notably, by David Hughes of the CCPA-B.C in a July 2020 report,   the Sierra Club B.C. states: “It is clear that if we continue to allow the growth of oil and gas extraction in this province we won’t ever be able to get climate pollution under control” …. “The sooner we begin a serious conversation about the transition away from fracking and all other forms of fossil fuels, the less disruptive and painful the transition will be for workers, our communities, and the most vulnerable among us.”

The Pembina Institute calls the report  “sobering” and “a much-needed wake-up call”, while calling for improvements.  “The report is inconsistent in its provision of details, which makes it difficult to assess whether or not climate programs should be continued, enhanced, redesigned, or replaced to effectively and efficiently make progress to targets. For a fulsome picture of climate progress, we expect future accountability reports to provide more clarity. We need to see the emissions reductions achieved to date by specific programs; annual budget allocations for programs and the corresponding (anticipated) emissions reductions; how the government has acted on the advice of the Climate Solutions Council; and what course corrections will be made to meet our climate targets. Once interim and sector-specific targets are established, the report should evaluate progress against these goals as well.”

British Columbia as part of the myth of eco-friendly Cascadia

Getting to Zero: Decarbonizing Cascadia  is a new investigative series launched on January 11 with an article published in The Tyee under the title “Cascadia Was Poised to Lead on Climate. Can It Still?”.  (At the InvestigateWest website, the same article appeared as “A Lost Decade: How climate action fizzled in Cascadia”) . It documents the rise of GHG emissions in the jurisdictions which compose Cascadia: British Columbia and the states of Washington and Oregon. The article summarizes political developments, summarizes the development of carbon taxes, and argues that weak decarbonization policies  – especially in the transportation sector- are behind the failure to reduce emissions. “Between full economic recovery in 2012 and 2018, the most recent reporting year, California and Cascadia both booked a robust 26 percent increase in GDP. Over that period California drove its annual emissions down by more than 5 percent. Washington’s emissions —and Cascadia’s as a whole — ballooned by over 7 percent.”   According to the article, for the period 2012 to 2018, “vehicle emissions had ballooned by over 10% in Washington and Oregon and more than 29% in BC (in contrast California’s grew only 5% during that period.)”

From the article:

“So why is environmentally-conscious Cascadia stuck in first gear? The consensus answer from experts and activists interviewed by InvestigateWest: a shortage of political will. The region has been beset by partisan wrangling, fear of job losses, disagreements over how to ensure equity for already polluted and marginalized communities, and misinformation obscuring the full potential of well-documented solutions. “The constraining factor has always been political feasibility, not economic feasibility,” says political economist and energy modeling expert Mark Jaccard, a professor at Simon Fraser University in Burnaby, BC, and a former chair of the British Columbia Utilities Commission.”

The series Getting to Zero: Decarbonizing Cascadia  is the result of a  year-long reporting initiative led by InvestigateWest, in partnership with Grist, Crosscut, The Tyee, the South Seattle Emerald, The Evergrey, and Jefferson Public Radio.  It will run throughout 2021, aiming to document and analyse the political and economic forces and barriers to climate action in British Columbia, Washington and Oregon, generally perceived as one of the most eco-friendly regions in the world.

Colorado Office of Just Transition defers actions for worker protection in new Final Action Plan

In 2019, the State of Colorado established the first state-level Office of Just Transition (OJT)  through House Bill 19-1314 .  As required by that legislation, the OJT  submitted its final Just Transition Action Plan on December 31, 2020, based largely on the Draft Plan submitted by its Just Transition Advisory Committee (JTAC)  in August 2020.  (The structure, mandate, and documentation from the consultation process are  accessible here; an excellent summary is provided by the State press release here .

The December Just Transition Action Plan offers discussion and strategy recommendations organized in three sections: communities; workers; and financing. The estimated cost is $100 million, and the time frame calls for actual closures to finish in 2030. (Perhaps the leisurely schedule will be reviewed in light of events: the Denver Post reported on January 4 that Xcel- Energy announced it will close its Hayden coal plant significantly earlier than planned –  beginning in 2027).  The December Action Plan strategies are dominated by concerns for communities, with six detailed strategies outlined. Recognizing that some communities are more dependent on coal than others, and that average wages are also different across communities, the plan designates four communities as priority Tier One communities, and others as Tier Two communities, as defined in an Appendix. The Hayden plant is located in a Tier One community.

Actions for workers’ benefits, environmental justice are deferred 

Regarding workers, there are 3 action strategies. The Just Transition Advisory Committee made recommendations to provide displaced workers with  temporary benefits related to “wage and health differential” and “wage and health replacement” in  the Draft Plan in August, but the final Plan states: “too much uncertainty remains around cost and scalability for us to feel comfortable advancing this recommendation — especially in the midst of the COVID pandemic and resulting economic downturn.” Instead, the Office for Just Transition:  “will drive a serious process to gain more certainty about costs, scalability, potential sources of funding, and possible alternatives at the state level. And we will engage a broad range of stakeholders in a dialogue about whether the State should implement such a strategy — and how it might do so.” This includes discussions with coal-related employers regarding their willingness to provide severance and retirement benefits.

This Plan also discusses and ultimately deflects and defers responsibility for the environmental justice concerns expressed in the 2019 enabling legislation  , which recognized “a moral commitment” to “the disproportionately impacted communities who have borne the costs of coal power pollution for decades”. This December Plan states: “we agree with the JTAC that these issues are best addressed in that broader context, which is why we are following its suggestion that OJT participate actively in emerging interagency efforts — led largely by the Colorado Department of Public Health and Environment — rather than creating our own independent (and potentially isolated) approach….. OJT will continue to rely on the advice of the Disproportionately Impacted Communities subcommittee of the JTAC, and it will play as active a role as possible in broader interagency efforts. As with our work on behalf of transition communities and workers, this is a long-term challenge to which we make a long-term commitment.”

The final report is summarized in an article in The Colorado Sun , which emphasizes the explicit goal for the Office of Just Transition to “Encourage the federal government to lead with a national strategy for energy transition workers”.  This is perhaps thanks to the leadership of Dennis Dougherty, Chair of the Colorado Just Transition Advisory Committee, Executive Director of the Colorado AFL-CIO, and through them, a representative to the National Economic Transition project – a grassroots organization of representatives from U.S. coal communities.  That ongoing project released a National Economic Transition Platform in the summer of 2020 .