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How the new UK government should begin working towards a just fossil fuel transition in the North Sea

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Perspective

How the new UK government should begin working towards a just fossil fuel transition in the North Sea

The new government in the UK must now decide what policies can achieve its promise for a "phased and responsible" transition in the North Sea. Here are some places for inspiration.

Felipe Sanchez / Published on 15 July 2024

The first hundred days of the new government will test Labour politicians’ self-proclaimed credentials on taking tough decisions. When it comes to the North Sea transition, the tough decisions come from what to do with the UK’s remaining oil and gas reserves and the communities that depend on their extraction.

Labour has committed to a “phased and responsible” transition that does not jeopardize jobs. Having promised a return to politics as public service on the steps of 10 Downing Street, Sir Keir Starmer now needs to honor that commitment by making a tangible difference in people’s lives. The alternative is the erosion of the confidence placed on him by the British public.

Spare a thought then for the policy teams attempting to extract clarifications from ministers about the definitions of “phased” and “responsible”. For inspiration, civil servants in Whitehall would do well to look around the other countries in the North Sea that are tackling similar issues – just as we did under the Oil and Gas Transitions initiative.

Following Denmark’s example

They could start by looking at Denmark. Its transition journey shows that halting new licences is just one step in a long process. The next step the Danes took was to leverage momentum to build consensus around the future of oil and gas resources. To do so, the Danish government commissioned a long-term assessment of the impact of cancelling further licensing rounds and setting a phase out date, which showed that there was little to be gained from continuing extraction beyond 2050. In turn, this paved the way for political consensus to coalesce behind a phase-out date which provides credible market signals and stability for long-term investments during the transition.

“But think of the job losses”, the Conservative opposition may counter – brazenly overlooking that they excluded workers when designing the North Sea Transition Deal together with industry in 2021. When you recall the precarity of jobs due to volatile oil and gas prices and the deep scars of unmanaged British coal and steel transitions, it is reasonable to expect workers to call for “no ban without a plan” with regards to the future of oil and gas licensing. It also makes it easy to see why recent polling suggests that oil- and gas-producing regions such as the North East of Scotland are overwhelmingly concerned about climate change and have little trust in industry ensuring workers and communities benefit from the transition.

A transition with minimal casualties cannot be achieved without a meaningful transition plan. To be successful, such a plan requires bringing to the table national and local governments, fossil fuels and clean technologies industry, and trade unions. This represents a new approach to transition planning in the UK, but it is not an untested experiment. The Danish climate partnerships model serves as an example to emulate. Indeed, the partnerships were instrumental in co-designing the roadmap for delivering Denmark’s climate commitments and the close collaboration between stakeholders laid the groundwork for a convergence on a phase-out.

Following Scotland’s example

The size of the UK oil and gas workforce makes the need to ensure nobody is left behind all the more serious and challenging. The wipeout of Conservative MPs in Labour heartlands can be in part attributed to dissatisfaction in the lack of progress made by the Conservatives’  “levelling up” agenda.

So how do you ensure an inclusive transition? Just look at Scotland. It has introduced the Just Transition Commission, the Energy Strategy, and Just Transition Plan as mechanisms to support affected communities, at a time when the government in Westminster failed to address their concerns. The change in government in Westminster presents a chance to reset its relations with the devolved government in Scotland, and opens the way for material enagement on a just transition.

Labour’s stomping majority provides the opportunity for developing policies across parliaments. At the same time, its honeymoon period is expected to be short-lived given the public’s distrust in politics. If this is to be remedied with actions rather than words, as Starmer has suggested in his first speech as Prime Minister, it should be remembered that those in the Westminster bubble are not alone in attempting to chart a path towards a fossil-free future.

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