Recommendations for Just Transition coal phase-out in Europe

Bela Phasing-out-coal-a-just-transition-coverPhasing out coal – a just transition approach  was released as a Working Paper by the European Trade Union Institute in April – the latest of several publications on the topic by ETUI Senior Researcher and ACW associate Béla Galgóczi . Following  a summary of the role of coal in the European economy and the current employment structure of the broader coal sector, the paper provides an up-to-date summary of energy policies and just transition policies in France, Germany, Poland and Spain, and also looks at lessons learned from past phase-out experiences in the Ruhr Valley of Germany, Hazelwood coal plant in  Australia, and ENEL, Italy.  He notes that  a clear distinction should be made between hard coal regions, like the German Ruhr or Silesia in Poland, which are strongly-industrialized regions with a high level of urbanization and  a greater economic diversity,  and brown coal regions  such as German Lusatia or the Polish Lodzkie region, which  are rural areas with low population densities and employment concentrated in the mining and energy sectors.  The paper concludes that successful just transition requires, amongst other things: specific and targeted just coal transition policies with government involvement at the central and regional level; a properly-funded, specific mine closure agency, or a specialized agency for employment transitions for several years; individualized active labour market policies and personal coaching; and active EU-level financial support.

The author has made similar arguments  in a 5-page ETUI  Policy Brief,  From Paris to Katowice: the EU needs to step up its game on climate change and set its own just transition framework  (2018), and in his detailed  report  published by the ILO in October 2018 : Just Transition Towards Environmentally Sustainable Economies  and Societies for All, previously summarized in the WCR.

English language version of Germany’s Coal Transition Report now available, with independent analysis of employment impacts

The final report of the German Commission for Growth, Structural Change and Employment (Coal Exit Commission) was delivered in January 2019, and is now available in an English language version.  The Clean Energy Wire  is a German news service written in English, and updates the implementation of the Report’s recommendations.  For example, an article from April 4 states that Germany’s federal government and coal mining states have agreed on a programme worth 260 million euros to provide fast support to regions affected by the coal exit – a first step in the estimated 40 billion euros  needed over the next 20 years.  On April 8, it published  “Mining union wants more efforts to unleash energy transition’s job potentials” , providing an English language  summary of German statements by the leader of IG BCE.

The Wuppertal Institute commented on the Commission’s findings and made its own recommendations in Assessment of the Results of the Commission on Structural Change  . The report commends the Commission for finding a consensus path forward amidst very strong competing interests, but looking ahead, it calls for  public education and acceptance, as well as policy tools “to push ahead vigorously with the expansion of renewable energies, to create the necessary framework conditions with the expansion of the electricity grid and to implement a holistic approach to the energy transition which, above all, takes the potential of energy efficiency into account to a much greater extent than before. ”

coal miner germanyAlso in the wake of the Coal Exit Commission report, researchers at the German Institute for Economic Research , the Wuppertal Institute  and the Ecologic Institute released a detailed joint report explaining why the coal phase-out is needed and how it can become a success. It also provides facts and figures on the German coal industry, including a list of all large coal plants . The summary press release is here .  Phasing Out Coal in the German Energy Sector:  Interdependencies, Challenges And Potential Solutions  argues that the benefits of phasing out coal exceed the costs and will province  new economic opportunities, with jobs in demand-management, storage, “power-to-x applications”, and efficiency technologies. Of particular interest is Section 4 of the report,  which includes statistics and discussion of employment effects.  Approximately 18,500 persons are employed directly in lignite-fired power plants and lignite mining, with another 4,000 to 8,000 in coal-fired power plants. The report finds that, by 2030, approximately  two thirds of the direct employees would be eligible for normal retirement, and another 10% would be eligible for early retirement schemes at the age of 55.   For younger employees, some jobs will be created in dismantling power plants and for remediation. For others who will need to find new jobs, the report holds up the example of Vattenfall in Berlin, where trainees under a rotation scheme can learn different skills in various functions . The report acknowledges that the wage level in the lignite industry is far higher than comparable new employment. It also discusses the availability of   EU, German Government and Federal State funds to finance structural change in the lignite regions.  EU support includes policy support under the Platform for Coal Regions in Transition,  established in December 2017, as well as EU funds.

 

 

 

Budget 2019 provides modest funding for climate change improvements – Just Transition, electric vehicles, energy efficiency

budget2019Updated March 25, 2019 with reactions.

No clean economy vision is evident in the  pre-election budget , Investing in the Middle Class, delivered by Canada’s Finance Minister on March 19.  The National Observer has a Special Report on Budget 2019 , composed of  twelve focused articles covering the range of notable provisions. Mitchell Beer provides a good summary of the Budget’s climate-related provisions, in “Morneau’s Pre-Election Budget Boosts ZEVs and Energy Retrofits, Extends New Fossil Subsidy”  in the Energy Mix (March 20).  Elizabeth May, leader of the Green Party is quoted in that article, and says that the climate provisions are “pathetic” – a similar reaction to that of Environmental Defence,which states more diplomatically that “funding for climate change in this budget does not match the scale of the challenge”. Similarly, the Canadian Centre for Policy Alternatives reaction judges the climate provisions as “modest efforts to move forward on greening the economy”, although calls the just transition plan “an important precedent.”  The Canadian Labour Congress reaction is a lengthly commentary on many worker-related initiatives  – including the issue of Just Transition.

UPDATED: Hadrian Mertins-Kirkwood weighed  in with his overall analysis, in “Budget fiddles while climate crisis burns” (March 20), judging the initiatives as modest and inadequate to the urgent task – with the greatest disappointment being the ongoing support to the oil and gas industry.  Similarly, Climate Action Network Canada  states that “business as usual policy is no longer acceptable to respond to the climate crisis and the level of climate action that citizens, students, workers and communities are urgently demanding.”

On the issue of Just Transition:  The Budget plan text on Just Transition reiterates the previous Budget’s pledge of $35 million over five years for Just Transition of coal workers.  In its reaction, the Canadian Labour Congress  acknowledges the new pledge of  $150 million in infrastructure funding to directly assist resource-based municipalities, but quotes Hassan Yussuff, Co-Chair of Canada’s Task Force on Just Transition: “… Canada’s unions are looking forward to working with the Minister of Natural Resources as the newly named lead minister, but are disappointed to see that the government has not addressed key Task Force recommendations to support workers, in terms of income, training and reemployment needs. Without this, workers will be left behind.”

More details appear in  “Coal workers get cash in budget but lack of details risks ‘major blowback”  in the National Observer (March 19), including that the  $150 million infrastructure funding will not flow until the 2020-2021 fiscal year.  Funds  will be delivered by Western Economic Diversification Canada at a rate of $21 million a year over 4 years,  and the Atlantic Canada Opportunities Agency , at a rate of $9 million a year for 4 year.

On the issue of fossil fuel subsidies:  The government  reaffirmed its long-standing (and unfulfilled) commitments to phase out fossil fuel subsidies , and pledged to establish an expert committee to examine the issue. Here is the reaction from the Stop Funding Fossils Initiative: “This year marks the tenth anniversary of Canada’s G20 commitment to phase out fossil fuel subsidies. Yet, despite moderate progress in the 2017 budget, Canada remains the largest provider of fiscal support to oil and gas production in the G7 relative to the size of its economy…. the Government of Canada has doubled down on fossil fuels by introducing billions of dollars in new subsidies in the past year. Budget 2019 allocates a further $100 million over four years to the Strategic Innovation Fund, aiming to help the oil and gas industry reduce emissions. ”

(Coincidentally, the 2019 Annual Fossil Fuel Report Card  was released on March 20, revealing  that global banks have invested nearly US$2 trillion in fossil projects since the Paris Agreement was signed, and Canada’s Bank of Montreal, RBC, ScotiaBank and CIBC  are amongst the worst offenders. )

On the issue of electric vehicles: Budget 2019 included a number of policies  aimed at speeding  up EV adoption, including a  2040 deadline to phase out new internal combustion vehicle sales, and consumer rebates for purchases of electric and hybrid vehicles ($5000 for purchases under $45K).  Despite recent reports that EV supply is restricting purchases, the government did not institute a mandatory sales mandate for car manufacturers. Businesses will be allowed to deduct the full value of a new ZEVehicle  worth up to $55,000 in the year they purchase it.  The government also pledged $130 million over the next five years  to build electric vehicle charging stations – specifically including workplaces in the named locations.  The National Observer summarizes these proposals in “Canada proposes rebates for electric cars, voluntary sales mandate”. 

UPDATED:  Unionists and local politicians staged a protest rally at the Windsor plant which manufactures the Chrysler Pacifica Hybrid on March 22. CTV Windsor  reported  that leaders of Unifor Local 444 and local  NDP politicans are  infuriated that the consumer incentives carry a price limit set at $45K  – excluding the Canadian-built Pacifica Hybrid, priced at $54,000.  The  CBC also reported  “Federal rebate on electric cars will push consumers to buy American, NDP says” .  And an Opinion piece by Will Dubitsky,  “Stalled: why North American lags as China and Europe lead the way on electric vehicles”  in the  National Observer (March 20)  calls the EV purchase incentives “a halfway measure offering less than the consumer rebate programs elsewhere,” and judging the $130 million over five years  for charging and refuelling stations “mediocre” compared to equivalent commitments in California and the EU.

On the issue of infrastructure and the built environment:  The text of the government’s announcement relating to energy efficiency is here , and a Backgrounder: Strong Communities, Affordable Electricity and a Clean Economy  is also relevant.     Initiatives include $1.01 billion in funding, immediately, to increase energy efficiency in residential, commercial and multi-unit buildings – in the form of financing and grants to retrofit community buildings, financing for municipal initiatives to support home retrofits, and financing to improve energy efficiency and support on-site energy generation in affordable housing developments .  Funds will be administered through the Green Municipal Fund of  the Federation of Canadian Municipalities.   Macleans magazine summarizes this, as well as infrastructure funding, in “Cities are billion-dollar winners in Budget 2019”   which states that “the biggest single new spending item in the budget is a $2.2 billion “one-time transfer” through the federal Gas Tax Fund. That money doubles the usual federal-municipal transfer through that mechanism. The windfall is intended to address “serious infrastructure deficits” in municipalities and First Nations communities.”

 

Final Report released by Canada’s Task Force on Just Transition

catherine mckenna hussan yussuff

Minister of Environment and Climate Change Catherine McKenna stands with Hassan Yussuff, Co-Chair of the Just Transition Task Force and President of the Canadian Labour Congress

The Task Force on Just Transition for Canadian Coal Power Workers and Communities was appointed by the Canada’s Minister of Environment and Climate Change in April 2018.  Their  report, completed in December 2018, was released to the public on March 11, 2019 :  A just and fair transition for Canadian coal power workers and communities – in French,  Une transition juste et équitable pour les collectivités et les travailleurs des centrales au charbon canadiennes .

This report provides ten recommendations for the workers and communities affected by the federal government’s 2016 policy decision to phase-out coal-fired electricity in Canada, as part of the Pan-Canadian Framework on Clean Growth and Climate Change.  A 2030 timeline was decided in  2018, and final  Regulations were released in November 2018.  There are 16 coal-fired generating stations left in Canada and nine mines which produce the thermal coal that feeds them, located in Alberta, Saskatchewan, New Brunswick and Nova Scotia.  Coal worker layoffs have already begun in Alberta, which has its own Workforce Transition Program  in place. Workers in the metallurgical coal industry, which is used to make steel, are unaffected by the coal phaseout.

The new federal report, A Just and fair transition for Canadian coal power workers is built upon 7 principles, and makes 10 recommendations. Those principles of a Just Transition include: 1. Respect for workers, unions, communities, and families; 2. Worker participation at every stage of transition; 3. Transitioning to good jobs; 4. Sustainable and healthy communities; 5. Planning for the future, grounded in today’s reality; 6. Nationally coherent, regionally driven, locally delivered actions; and, 7. Immediate yet durable support.   The report defines Just Transition, relates it to the Paris Agreement, provides an overview of coal mining work and provincial policies, and makes  ten broad recommendations, largely based on what the Task Force heard in its public engagement sessions across the four provinces in the summer of 2018.  “What we heard”  is an accompanying report which summarizes submissions and lists the dozens of communities and organizations involved.

Recommendations:  The Foundational recommendations of the Task Force include a call to  “embed just transition principles in planning, legislative, regulatory, and advisory processes to ensure ongoing and concrete actions throughout the coal phase -out transition: 1. Develop, communicate, implement, monitor, evaluate, and publicly report on a just transition plan for the coal phase-out, championed by a lead minister to oversee and report on progress. 2. Include provisions for just transition in federal environmental and labour legislation and regulations, as well as relevant intergovernmental agreements. 3. Establish a targeted, long-term research fund for studying the impact of the coal phase-out and the transition to a low-carbon economy.” Recommendations concerning workers include:  establish local transition centres to provide retraining,  relocation and social supports; establish a pension-bridging program for those forced to retire early; create a detailed and publicly available inventory of labour market information regarding coal workers, and create a comprehensive funding program to assist workers in securing a new job – including income support, education and skills building, re-employment, and mobility. Recommendations relating to communities include: identify, prioritize, and fund local infrastructure projects in affected communities, and establish a dedicated, comprehensive, inclusive, and flexible just transition funding program ; meet directly with affected communities to learn about their local priorities, and to connect them with federal programs that could support their goals.

$35 million was committed to Just Transition programs in 2018. The Task Force estimates that  “direct and indirect costs of the phase-out will stretch well into the hundreds of millions of dollars and the timeframe will go beyond 2030.”  It calls for  “additional and more substantial investments in Budget 2019 and budgets thereafter.”   Canada’s next budget will be delivered on March 19 – providing a gauge of the government’s intentions re Just Transition for coal workers and their communities.

The Canadian Labour Congress announcement concerning the Task Force Report release is  titled “Just Transition Task Force report has potential to put people at the heart of climate policy”, and pictures the members of the Task Force. In addition to Hassan Yussuff, President of the CLC and Co-Chair of the Task Force, union members included Gil McGowan (Alberta Federation of Labour), Mark Rowlinson (United Steelworkers), Scott Doherty (Unifor) , Tara Peel (Canadian Labour Congress), and Mark Wayland (IBEW).

Just Transition taskforce

German Coal Exit Commission recommends Just Transition measures but a 2038 deadline

coal machine germanyOn January 26, the German Commission on Growth, Structural Change and Employment, (better known as the Coal Exit Commission) delivered its highly-anticipated report and a “roadmap” for lignite coal plant closures in the country. The report calls for Germany to end coal-fired power generation by 2038 – subject to reviews by independent experts in 2026, 2029, and 2032, when it  will be decided if the deadline can be advanced to 2035. The 28 official Commissioners, drawn from industry, unions, environmental NGOs, community leaders and government, negotiated for six months , with all but one voting in favour of the final recommendations. Greenpeace voted “yes”, but also issued a dissenting opinion, stating  “Germany finally has a road map for how to make the country coal-free. There will be no further coal plants. Greenpeace and other groups made sure that the commission has clearly supported keeping Hambach forest. However, the report has a grave flaw: the speed is not right.” Other participants, including Sir Nicholas Stern, also criticized the slow speed of the plan.  The Powering Past Coal Alliance , of which Canada and the U.K. were founding members, state that, in order to meet the goals of the Paris Agreement,  “a coal phase-out is needed by no later than by 2030 in the Organisation for Economic Co-operation and Development and in the European Union.”

A compilation of reactions from Commissioners is here. From Michael Vassiliadis, head of the miners’ union IG BCE :“We have found a compromise after 21 hours of negotiations that cannot make us happy, but leaves us overall satisfied. We managed to shield the employees in coal power generation from social hardships from the structural change. At the same time, the coal phase-out is closely tied to verifiable progress with the future energy mix, the expansion of renewables and the grids. The regions get money for structural change, to create new quality jobs. The commission laid the foundation for a new Energiewende of reason.”

The 336-page report is currently available in German only; , but it is well summarized in English in a Fact Sheet from Clean Energy Wire. According to CLEW, key issues addressed are the stability and pricing of energy supplies for Germany, CO2 reduction, and compensation to industry.  Regarding Just Transition for workers and communities, the report devotes almost 40 pages to the economic measures for the regional economies and workers. While the report itself doesn’t estimate those costs, an article in Der Speigel   states that communities will receive 40 billion euros in structural assistance over the next 20 years.  The Commission calls for the coal mining regions to remain energy-oriented, through the development of innovative technologies, such as electricity storage, renewable energy, or power-to-gas production .

The Commission’s recommendations are expected to be accepted by government, but there is a long road ahead in passing legislation and negotiating financing, as outlined in  “German government stands ready to move on coal exit proposal” (Jan. 29). The coal exit will be one part of the government’s Climate Action Law package, promised for the end of 2019.