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.

 

 

Alberta coal phase-out experience as a blueprint for just transition

Parkland alberta coal_phaseout_coverOn November 20, the Parkland Institute at the University of Alberta released a new report: Alberta’s Coal Phase-out: A Just Transition? .  Acknowledging that there is no single approach to just transition, co-authors Ian Hussey and Emma Jackson consider some common values and approaches expressed in the just transition literature: support for re-employment or alternative employment, income and benefit support, pension bridging and early retirement assistance, and retraining and educational programs for workers.  The press release quotes Ian Hussey: “While far from perfect, the Alberta transition programs provide a blueprint that will become increasingly important in the coming decades as the world makes the shift away from fossil fuels.”

The report evaluates the real-world experience of the coal phase-out in Alberta, which began in 2012 under the federal Conservative Harper government, and accelerated after 2015 under the provincial policies of the New Democratic Party. It describes in detail the events and context of the provincial transition policies, and uses case studies of three companies – TransAlta, ATCO, and Capital Power- as well as  a community case study of Parkland County.  The report concludes with an analytic discussion, evaluating the government’s transition programs for workers and for coal communities.  The full report is here ; an Executive Summary is here .

The report is a joint publication of the Parkland Institute at the University of Alberta, and the Corporate Mapping Project,  a joint initiative led by the University of Victoria, the Canadian Centre for Policy Alternatives BC and Saskatchewan Offices, and the Parkland Institute.

Equity for marginalized workers needed in Canada’s Just Transition policies

mertins kirkwood2019 who is includedA new discussion of Just Transition in Canada was released in August 2019, Who is included in a Just Transition? Considering social equity in Canada’s shift to a zero-carbon economy.    Co-authors Hadrian Mertins-Kirkwood, senior researcher at the Canadian Centre for Policy Alternatives,  and Zaee Deshpande provide this introduction:  “After establishing a conceptual framework for just transition, including a distinction between reactive and proactive approaches, we analyze Canada’s existing transition policies to determine who is benefiting from them and who is excluded. We specifically consider gender identity, Indigenous status, racialized identity and immigrant status in our analysis of coal communities covered by the transition. We find that the main beneficiaries of present just transition policies are Canadian-born white men, which reflects their disproportionate presence in the coal workforce. However, many socially and economically marginalized people also face costs and risks from the same climate policies but do not share in the benefits of transition policies, which means these policies may lead to further marginalization.”  The conclusions are supported by the labour market analysis based on Statistics Canada employment data, combined with a synthesis of federal and Alberta Just Transition policies currently in place for the coal industry.  The paper makes a series of policy recommendations including targeted training, apprenticeship and education for people from marginalized groups.

The August report was co-published by  the Canadian Centre for Policy and  Adapting Canadian Work and Workplaces to Climate Change project (ACW), as was a 2018 report by  Mertins-Kirkwood, Making decarbonization work for workers: Policies for a just transition to a zero-carbon economy in Canada,  in which he sets out the distinctions between “reactive” and “proactive” Just Transition policies.  In November 2019, a related article by Mertins-Kirkwood and Ian Hussey, “A top-down transition: A critical account of Canada’s government-led phase-out of the coal sector,” will appear in the forthcoming international book Just transition(s): social justice in the shift towards a low-carbon world, to be published by Pluto Press .

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.