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 .

Employment and Job loss experience of Canada’s oil and gas, coal workers

In September 2020, Canada’s oil and gas industry employed approximately 160,100 workers –a 0.9% increase from August 2020, but a 14% drop from September 2019.  In that same one-year period, employment in the services sub-sector decreased by 29%;  the pipelines sub-sector decreased by  30% and the exploration and production sub-sector increased by 3%.  These statistics are based on Statistics Canada’s Labour Force Survey (LFS) data,  made available on the  Employment and Labour Force Data Dashboard provided by PetroLMI, a labour market agency specializing in the oil and gas industry, jointly funded by government-industry.  Their September 2020 blog is here, summarizing the current trends ; an archive of PetroLMI reports re the trends and forecasts is here – most recently, The LNG Opportunity in Canada: Employment Prospects and Requirements (June 2020).

In addition to providing regular labour force data by industry, on September 22 Statistics Canada released two studies in its Economic Insights series:  How Do Workers Displaced from Energy producing Sectors Fare after Job Loss? Evidence from the Oil and Gas”  Industry    and How Do Workers Displaced from Energy producing Sectors Fare after Job Loss? Evidence from coal mining. Both studies use data, (including age),  from Statistics Canada’s Longitudinal Worker File, covering the period 1995 to 2016, for  workers permanently laid off from those industries..  

Job loss experience for oil and gas workers

How Do Workers Displaced from Energy producing Sectors Fare after Job Loss? Evidence from the Oil and Gas” Industry reports that “job loss leads to substantial and persistent earnings declines”, although “three years or five years after being displaced, a significant fraction of workers displaced from this sector earn more than they did in the year prior to job loss.”  Data show that re-employment has become progressively more difficult, and for workers laid-off in 2015 or 2016, less than two-thirds found paid employment in the following year, with most moving outside the oil and gas industry – construction being the most common sector for re-employment. CBC produced a summary of the Statistics Canada report in an article here , augmenting it with personal stories and commentary from economists.

Coal workers’ job loss experience

Similar analysis (the reports are authored by the same Statistics Canada economists) appears in  How Do Workers Displaced from Energy producing Sectors Fare after Job Loss? Evidence from coal mining . Contrary to the trend for oil and gas workers, finding employment within a year of lay-off became easier for coal workers more recently: 67% for workers laid-off in 1995 compared to 89% for those laid-off in 2005 . However, regarding earnings loss, the report compares coal data with all industries, and states: “These numbers imply that about half of workers laid-off from coal mining and from other industries during the 2004-to-2011 period saw their annual wages and salaries drop by at least 30% in the short term. Since coal miners are paid higher-than-average wages …. the median declines in annual wages and salaries of coal miners displaced from 2004 to 2011 amounted to roughly $14,800 (in 2016 dollars) in the short term, more than twice the median declines (of about $6,100) experienced by other laid-off workers.” Conclusions are similar to those in the report on oil and gas workers: a  transition to “green jobs” has not materialized, and “ for many coal miners and other workers, job loss leads to substantial and persistent earnings declines”, but, “the financial consequences of job loss are not uniform for all displaced workers. …. Three years after job loss or five years after job loss, a significant fraction of displaced workers earn more than they did in the year prior to job loss.”

Coal-mining closures and energy transitions – impacts on women, youth, and communities

SEIdistributional-impacts-photo-1374x916In April 2020, the Stockholm Environment Institute (SEI) published a Working Paper which analyses the research to date on mine closures – with an emphasis on coal mine closures.  Distributional impacts of mining transitions: learning from the past  states that few studies have dealt with the distributional impacts, and those which do exist focus on developed countries (largely the U.K., but some from Canada – including  the closure of iron mines in Schefferville Quebec in the 1990’s). Authors Strambo and Aung focus on the financial, psychological and labour-related impacts of mining closure, with a special attention to gender and youth impacts.  Their report also discusses the effectiveness of implemented policy responses and initiatives in supporting these two social groups.

Strambo and Aung, along with Atteridge,  wrote a related report, Navigating Coal Mining Closure and Societal Change: Learning from Past Cases of Mining Decline,  published by the SEI in July 2019.  It is an extensive, broader  bibliographic review and analysis which includes a detailed explanation of the search methods used. It concludes:

“Economic and employment impacts of closure are much more thoroughly documented in the literature than social and political impacts. On economic impacts, more attention needs to be paid to the distributional impacts of mine closure, because a smooth and “just” transition requires design measures that target the specific vulnerabilities of different groups in mining areas. Reducing social inequality is likely to be a particularly important success factor in post-mining transitions, especially in developing countries, where mining regions have often been characterized by high wealth concentration and very limited (if any) benefits in terms of human or social development … Political and social impacts of closure have also been understudied.”

The  SEI also recently published two Papers related to gender aspects of just energy transitions:  Assessing the gender and social equity dimensions of energy transitions , which synthesized findings from 67 peer-reviewed academic articles, mostly related to rural women in Asia and Africa.  A brief 5-page  synthesis report, Ensuring just and equitable energy transitions  summarizes the state of international research.

In January 2020, the Stockholm Environment Institute was ranked as the world’s top think tank on environmental policy issues in the annual 2019 Global Go To Think Tanks Index, by the University of Pennsylvania. SEI, headquartered in Sweden but with seven international locations, is  a prominent member of Think Sustainable Europe , a network if think tanks created in late 2019.  It also  hosts the  secretariat of the UN-affiliated Leadership Group for Industry Transition  .

Saskatchewan announces $10 million aid for Estevan and Cornach coal transition

A February 28 press release from the government of Saskatchewan announced funding to support the communities of Estevan  and Cornach     – the province’s principal coal-producing communities – as they transition after the federally- mandated phase-out of traditional coal-fired electricity generation by 2030.  Estevan is scheduled to receive $8 million and Cornach  $2 million in this provincial announcement – money that had already been pledged in the government’s Throne speech in October 2019 .

Climate Justice Saskatoon has studied and compiled research into  the coal transition for these two communities as a project called Future of Coal.  A useful timeline highlights key developments in the phase-out process from 2017 to 2019 and a report,   Bridging the gap: Building bridges between urban environmental groups and coal-producing communities  (2018), reports on “in-depth conversations with coal and service industry workers, town administrators, union representatives, and farmers”  in Cornach and Estevan.

The federal Task Force on a Fair and Just Transition for Canadian Coal Power Workers and Communities visited the two communities – briefly noted in their What we Heard report  and reported at length by the Estevan Mercury newspaper here.   The  Regina Leader Post reported in detail on the anxiety and frustration of workers in  “ ‘Energy city’ feeling powerless as coal phase-out haunts Estevan” (June 2019) . Workers are members of  United Mine Workers Local 7606 ,  and many are hoping that investment in carbon capture and storage (CCS)  might prolong their working lives.  A  video explains their view of  CSS  here on the Local 7606 website .

New Roadmap for German coal phase-out includes worker payments till 2043

After intensive negotiations, on January 16 the German government, its coal mining states and several major utilities agreed on a roadmap for shutting down the country’s lignite-fired power plants, making Germany the first country in the world with an actual plan to end both nuclear and coal-fired power production.  Most critics say that the roadmap deadline of 2038 is too slow, although it adheres to the deadline recommended by Germany’s Coal Exit Commission  in 2019.  Analysts also criticize an exception which allows a new coal-fired power plant – Datteln 4 –  to come online in summer 2020. (Activists pledge to oppose it). A summary of the agreement is provided by Clean Energy Wire, as well as in “Bye Bye Lignite: Understanding Germany’s Coal Phase-out”  in Deutsche Welle (Jan. 16), or  “How Hard Is It to Quit Coal? For Germany, 18 Years and $44 Billion” in the New York Times (Jan. 16) .  Reaction to the plan appears in  “Hambach Forest: Germany’s sluggish coal phaseout sparks anger” in Deutsche Welle which states that, although the iconic Hambach forest will be saved, activists and local residents are “appalled” because surrounding villages will not. General reactions from German media appear in English in  “’Historic compromise’ or “pact of unreason”? – media reactions to Germany’s coal exit deal” (Jan. 17).

An estimated 20,000 people are employed in Germany’s lignite industry — of which 15,000 work in open-pit mines and 5,000 in lignite power plants. For them,  adjustment payments (not yet quantified) will be provided until 2043, following the pattern of  provisions for workers in the hard coal sector phase-out which ended in 2018.  The coal workers’ union, Industriegewerkschaft Bergbau, Chemie, Energie (IG BCE),  said the agreement would “set the benchmark” for a socially acceptable and climate-friendly transformation and would “lay the groundwork for linking social and climate justice.” The leader of the IG BCE stressed that the phase-out roadmap has to be complemented by a “phase-in roadmap” for renewables, which needs to be done urgently.

In addition to billions in compensation to the utility companies such as giant RWE, there are to be support payments for the affected states of Brandenburg, Saxony-Anhalt, Saxony and North Rhine-Westphalia –  a total of 14 billion euros until 2038 for direct investments in the regions,  and another 26 billion euros provided by the federal government for  “further measures” to strengthen local economies.