Just transitions: what you need to know for COP24

GP: We often talk about low carbon transitions as if there were no downsides. That’s because, for the most part, the outcomes from a greener economy are positive – cleaner air, less climate damage. Who wouldn’t want those things? But for some people, like fossil fuel workers, there are some serious downsides, such as losing your job. The concept of a just transition is about ensuring we don’t lose sight of those harmful impacts, and we take care to minimize them.

SK: Climate policy so far has dealt overwhelmingly with consumption-side (or emission-side) policies, with the assumption that as consumption of fossil fuels declines, production will decline. This has proven wrong. Fossil fuel production has its own inertia and politically reinforcing dynamic. Production levels are nowhere near where they need to be if we are going to keep warming to 1.5°C. Countries will need to take explicit steps to wind down fossil fuel production. And, for those steps to be acceptable –politically and morally – they will need to include measures that ensure no one gets left behind.

GP: Some countries are starting to recognize this. For example, Spain recently announced plans to close most of the country’s coal mines, with dedicated assistance for mining regions to transition their economies. They’ve also created a Ministry for Ecological Transition. And they’re not the only ones working on transition planning: Canada, Germany, Scotland, and the European Union have all announced transition planning committees or programs. Some countries and regions are now viewing just transitions as a third pillar of climate policy, alongside mitigation and adaptation responses.

CS: Long-term anticipation is key. Economic diversification takes a long time. But historically we have not been good at taking steps well in advance: in most cases, measures to address decline tend to be reactive rather than proactive.

There are a lot of complex social, economic and environmental issues to manage when mining closes down. But typically, local municipalities – and national governments, for that matter – don’t have a planning framework that is well designed to handle this.

SK: To do this, we need to build a broad political consensus in support of having a transition at all. Uncertainty is scary, it plays right into people’s sense of economic insecurity. To gain support for a post-fossil fuel future, it’ll have to be seen as one where people have more to gain than lose. It might be necessary to think much more broadly – meaning not just offering retraining for specific fossil fuel workers, but free public post-secondary education. Not merely a few regulations to try to make sure fossil fuel company pensions don’t go broke, but a strengthened and expanded social security system. Not just a mine decommissioning grant, but major community reinvestment.

AA: That’s right, otherwise it’s difficult for mining communities to imagine what they can do to replace coal mining. Where will workers find decent jobs? How can a local or regional economy re-engineer itself into other sectors? What social identity will the region have after mining closes? And so on.

CS: That is definitely a big challenge. Miners also often share a strong sense of identity, and closure can have important psychological effects on individuals and communities forced into abrupt change.

Extractive industries also provide some concrete services and goods to communities where they operate through corporate social responsibility programs, and they contribute to local public budgets. This means that municipalities’ income depends on their financial contributions, and so does their ability to provide basic public services. That doesn’t mean there aren’t major benefits to a phase-out, such as the end of extractive practices that often wreak havoc on the landscape and local ecosystems.

But the financial aspect makes it difficult for local authorities to anticipate transitions. What happens after closure remains the elephant in the room that nobody wants to acknowledge.

AA: Vested interests also can prevent open conversations about the possibility of an “end to coal mining”. Sometimes the political elite are financially invested in coal mining, and that makes it challenging to have these necessary conversations.

Mining companies also rarely give warning about closure. They sometimes hire new employees one day and then they next day, close down the whole operation. Based on our dialogue events in Colombia, it seems the mining companies there are saying they’ll be continuing for another 10 to 15 years. This is interpreted by local governments, local businesses and mine workers as there’s no urgent need to start talking about life after coal. But Colombia’s coal mining sector is quite vulnerable to changes in global demand, especially European demand – which is expected to fall away quite quickly. And even if decline starts only in 10-15 years, now is the time to start planning for it.

SK: Well, the international climate regime was built on the shared understanding that climate change is a global challenge that requires a global cooperative response. This is seen as self-evident with regard to mitigation, but it’s no less true when it comes to phasing out extraction. That too has to be a global cooperative effort, both from the standpoint of winding down the fossil sector, and meeting the needs of the countries, communities, and households that currently depend on extraction.

This has now been accepted in the UNFCCC negotiations, and to some degree examined in broad strokes, but it’s now time to speak concretely about the steps countries should take, and the support that some countries will need in order to take those steps. Trade unions are at the forefront of making the notion of a Just Transition concrete and meaningful at the level of regions and communities. As they like to say, “there are no jobs on a dead planet.” Ministers should heed that message carefully, and act accordingly in a way that preserves decent work and vibrant communities.

GP: The UNFCCC and other international institutions can also fulfil an important knowledge-sharing role. No one has the perfect recipe for low-carbon transition planning. It’s hard to figure out how to deal with all the challenges we’ve discussed so far. There’s a need to share lessons about what’s working, what’s not – and someone needs to collate and share those stories. Could the UNFCCC create something like the NAZCA portal for transition planning? The UNFCCC has been running some useful technical events just transitions – for example, in May a workshop was held on economic modelling tools for transition planning. More of this type of knowledge sharing is needed, to build capacity to plan transitions effectively.

AA: Another big area where international cooperation is needed is climate finance. It’s already available to developing countries specifically to help them reduce GHG emissions and adapt to the impacts of climate change. Through mechanisms like the Green Climate Fund, there could be a third purpose: provide concrete support to regions as they undertake a transition from fossil fuels. Supporting transition planning processes across government and civil society, investing in alternative low-carbon economic activities that can help workers find jobs in new sectors – these kinds of things are needed if we expect coal regions to stop digging.

I’ve not seen climate finance used this way yet. Most of the mitigation projects, for instance, are on the demand side. But why not? If fossil fuel supply is part of the problem, then using climate finance for transition efforts could be part of the solution, and is arguably necessary if winding down fossil fuel production is going to happen at the needed rate.

SK: To the extent that a just transition is part of the discussion, it’s a pretty narrow set of the issues. To a large degree, it’s limited to the efforts to help with the challenges faced by those workers who are directly involved in fossil fuel production… coal miners and such. But, the transition to a low carbon world involves a transformation that sprawls far beyond the closing of coal mines and retraining of workers. For example, in some poorer countries that are especially reliant on fossil fuel production, fossil production generates a significant fraction of overall direct and indirect employment, it supports a major portion of spending power, it drives a significant share of GDP, it may provide a large share of foreign exchange or public sector revenue.

If the fossil production sector is to phase out in an orderly way that minimizes social disruption, we need to think about these broader dimensions. If countries are being asked to diversify away from fossil fuel production, then what should that diversification look like, and where does the international community have a role in encouraging and supporting it?

GP: Sivan’s right that a lot of the emphasis so far has been on supporting workers transition to new roles in a diversified economy. That’s a critical piece of the transition puzzle.

But the “just” component of the transition means we also need to think more deeply about how the transition can remediate some of the other existing injustices in our energy system. Tackling gender inequality is one example – though there are many more justice issues we could talk about. Women tend to be under-represented in the fossil fuel workforce, and in energy decision-making roles, so if transition support focuses only on helping workers who are already in the energy industry, we risk reinforcing existing gender imbalances through transition policies. Thinking about how we holistically support communities in a transition, in ways that remedy rather than exacerbate inequality, needs to be part of the picture.