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.

Coal transition case studies argue for anticipation and early action

coal transitions report sept 2018Implementing coal transitions:  Insights from case studies of major coal-consuming economies , published on September 5, brings together the main insights from the Coal Transitions project, the international research program led by IDDRI and Climate Strategies.  The report provides an overview of the drivers of coal transition across the world (with brief mention of the Powering Past Coal Alliance and Canada), and concludes that coal transition is already happening, and that it is technically feasible and affordable. The report then presents case studies of coal transition in six countries: China, India, Poland, Germany, Australia and South Africa.

The analysis concludes that there are multiple policy options which have proven effective for coal transition, but warns that the meaningful consultation and participation of stakeholders early on in the decision-making process is critical to success. In an explanatory blog,  lead author Oliver Sartor states that coal transition policies: “…. must be context-specific and agreed between the relevant parties. However, the crucial success factor is to anticipate rather than wait until the economics turns against coal. A good preparation can allow for younger eligible workers to be more easily placed into alternative jobs, for older workers to retire naturally, and for tailored worker reconversion and job-transfer programs for workers in the middle of their careers.”

In addition to the Synthesis report, national reports for each of the six countries are available from the IDDRI here.

German report proposes innovative “Just and In-time” Transition policies

German Just and intime policy coverJust and In-time  Climate Policy: Four Initiatives for a Fair Transformation  was released  on August 31 by the German Advisory Council on Global Change (WBGU). The paper  makes innovative proposals for  the German climate change policy in an international perspective. The four exemplary initiatives under discussion relate to (1) “the people affected by the structural change towards climate compatibility” (specifically, Just Transition for coal-mining regions), (2) the legal rights of people harmed by climate change (including financial support for citizens bringing climate liability suits), (3) the dignified migration of people who lose their native countries due to climate change, (through the vehicle of an international climate passport),  and (4) the creation of financing instruments for just & in-time transformation processes.

Regarding the transitions required by coal phase-out, the paper discusses the concept of Just Transition, but argues that it may be too slow for the emissions reduction challenge the world faces.  Instead it uses the term “Just and In-Time” transition,  reviewing  past structural transition models  but concluding that they will not be sufficient.  “Purposive decarbonization requires forward-looking, early, proactive intervention by the state in alliance with other actors.” The report  proposes to reach that goal through “an  overarching ‘Zero Carbon Mission’ on multiple political levels”- local, regional, national, and international.

Regarding citizens’ legal rights and climate liability, the paper states: “Under certain circumstances, companies that contribute to climate change through emissions can sue for damages in the courts if they are forced by state authorities to close their plants. Yet the legal rights of people affected by massive climate damage vis-à-vis large corporations partly responsible for climate change are completely uncertain. The WBGU recommends that the German Federal Government should support a number of promising pioneer lawsuits, particularly those brought by people and communities harmed by climate change, against major corporations that have a significant responsibility for global warming, and assume the litigation cost risks for these lawsuits. It should furthermore use its influence internationally to ensure that the people affected are given opportunities to take legal action across national borders.”

Regarding climate migration, the report urges the German government to advocate at Katowice for a “climate passport” for climate-driven migrants “as a sign of intergenerational justice and responsibility”,  and that “Countries with considerable responsibility for climate change should open their doors as host countries to people with a climate passport.”

Regarding the financial instruments to support transformation, the paper proposes that transition funds be created by pricing greenhouse-gas emissions (e.g.through carbon taxes), and be supplemented by revenue from a reformed inheritance or estate tax. “The transformation funds should accelerate the implementation of the climate and sustainability goals via investments and holdings in key industries, and use the profits generated for early and participatory structural change.”  The  WBGU also recommends providing support for economically weaker countries to build up their own transformation funds and manage structural change via a facility at the World Bank or regional development banks.

The German Advisory Council on Global Change (WBGU), an independent, scientific advisory body established by the German government in 1992.  The paper was released  in anticipation of  the 24th Conference of the Parties to the UN Framework Convention on Climate Change to be held in Katowice in December.  The German Commission on Growth, Structural Change and Employment is also underway now, with the goal of contributing to the COP24 discussion on coal transition planning.

 

Job protection gets high priority in Germany’s Commission on phase-out of brown coal

According to a March 2018 report by Clean Energy Wire, Germany’s coal industry, ( hard coal and lignite coal), employed approximately 36,000 workers in 2016, in contrast to 160,000 people employed in the wind power industry and 340,000 in the entire renewable energy generation sector.  Yet on June 6,  Germany’s Special Commission on Growth, Structural Economic Change and Employment was launched to study and make recommendations for social and economic policy  for a phase-out of lignite coal in Germany by the end of 2018. The word “coal” does not appear in its name, reflecting the political tension surrounding the issue.  Groups such as The Green Party,  WWF Germany and Greenpeace Germany are critical, as summarized in “Why are German coal workers so powerful, when there are so few?” in Climate Home News (Aug. 14) , which states that ” “saving jobs in the coal sector is its first priority, followed by designing the structural change in the coal regions towards low-carbon economies, with climate protection and coal phase-out coming last.”

Although much information about the Commission is in German, Clean Energy Wire ( based in Berlin) publishes in English, and  is monitoring the Commission’s progress  . It  has produced two Fact Sheets that are essential reading: 1.  Coal in Germany, a Fact Sheet  (Dec. 2017) ( full of facts and figures about the industry); and  2. Germany’s Coal Exit Commission, a Fact Sheet  – which includes a list of  the members of the Commission –  representatives from government, industry, academia, environmental groups,  and these unions: German Trade Union Confederation (DGB) ; Ver.di (Service industries)  and IG BCE  (mining, chemicals and energy industries). Position statements from some of the members of the Commission are here  ; IG BCE states: “The people in the mining regions do not need an accelerated exit from coal.. .The path for a phase out of coal-fired power generation has long been mapped out. What they need is an entry into structural change that secures good industrial work. That’s what we will work towards in the commission.”  From another member, Germanwatch: “The coal exit is aligned with the goals of the Paris Climate Agreement and has the potential to be the foundation for a fair structural change and a modernisation of the economy. One hopes that the economic associations involved do not obstruct, but put the opportunities front and centre.”

On August 3 that the Germany’s Employment Minister presented a 6-point plan, summarized in “Employment minister suggests infrastructure projects for coal mining regions” .

Further background and opinion:  

From Euractiv: “Leaked: Germany’s planned coal commission shows little interest for the climate”    (June 1)   and “ Germany launches coal commission in a bid to protect climate and jobs”  (June 7)

From DW, “Germany′s mining communities brace themselves for post-coal era” (June 1)   and  “Germany’s coal exit: Jobs first, then the climate” from DW   (June 26);

Contrast the European coverage with “New Commission studies unprecedented, orderly coal phase out for Germany” in The Energy Mix (August 14) .

 

German unions call for mass retraining to support the electrification of vehicle manufacturing by 2030

IGMetall logoOn June 7, the European unions IG Metall and IndustriAll Europe  released a report which models the employment impacts of the possible fuel efficiency standards required to further decarbonize the European automotive industry.  The report, whose title translates as  Effects of vehicle electrification on employment in Germany,   presents three scenarios: the first, close to existing regulations, will require a 2030 automotive fleet consisting of  15% plug-in hybrids and 25% battery-electric vehicles, and is forecast to result in an 11% loss of employment by 2030, or 67,000 jobs.  The second and third scenarios predict even more job loss –  108,000 or 210,000 across Europe.

In a press release announcing the study, the automotive advisor of IG Metall and chairman of the automotive committee of IndustriAll Europe says:  “We fully support the evolution towards a new automotive paradigm, but this has to happen in a socially acceptable way. …. It will require the combination of industrial and employment strategies. Mass training programmes will be needed while ambitious reconversion plans should avoid the decline of regions…. In this respect we should not forget that many regions all over Europe are heavily integrated in the automotive supply chains. Equally, we should not forget that thousands of SMEs producing conventional components are at risk as they miss the necessary financial resources, the research capacity and the technologies to invest in alternative products. Also, the aftermarket and its 4m jobs will be severely disrupted as electric vehicles require much less maintenance”.

The report is not available in English, but is summarized in the press releases by IndustriAll  and  by IG Metal  (in German, use the “translate” feature) .  It was initiated by IG Metall,  along with car manufacturers BMW, Volkswagen and Daimler, automotive suppliers Robert Bosch, ZF Friedrichshafen, Schaeffler, and Mahle and the German Association of the Automotive Industry.  Research was conducted by the Fraunhofer Institute for Ergonomics and Organization (IAO) in Stuttgart , using  data from the companies involved.

Industriall logoIn March 2018, IndustriAll  announced that it was one of the stakeholders in a newly-approved EU  Blueprint for Sectoral Cooperation on Skills in the automotive industry (part of the New Skills Agenda for Europe).  The March press release   characterized the automotive sector as “in turmoil because of so many structural changes taking place at the same time: the ever stricter emission standards and the resulting quest for alternative powertrains, the digitalisation of production processes, automated driving, the increasing connectivity of cars with the outside world, development of mobility as a service.”