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No oil, no coal, no future? Are we prepared for a ‘just transition’?

No oil, no coal, no future? Are we prepared for a ‘just transition’?
20 Mar
2020
It is supposed to ease the transfer of workers in high-carbon industries and environment-destroying jobs into cleaner, greener alternatives, without destroying their livelihoods in the process. But if the so-called ‘Just Transition’ holds all the answers, why aren’t governments around the world listening?

I think we have to start with the idea that there has never been any such thing as a just transition in the US,’ says Phil Smith, director of communications at the United Mine Workers of America. ‘When an industry has been phased out, as some are now talking about doing with coal – so when our steel industry collapsed – people lost their jobs, alcoholism and drug use rose, suicides rose. Nothing was ever done in respect to that.’

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This issue, of what happens to workers and communities when industries decline, has never been more relevant than today. The idea of a ‘just transition’ – something Smith and many other trade unionists say they have never witnessed – is now inextricably linked with questions of climate change and climate policy, though its roots are much older.

The term first gained traction in the 1970s, adopted by trade unionists working to phase out toxic industries that were harming workers and community health. Now, the term is more often used to refer to the need to move away from a fossil-fuel based, extractive economy, but in a way that protects workers and communities from the harshest impacts of inevitable job losses.

This modern take on the concept was enshrined in the Paris Climate Agreement of 2016 – something international trade unions fought for vociferously. The final preamble of the agreement states that members will take into account the ‘imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities’.

This means that all parties to the agreement should have the concept of a just transition in mind as they shift economies away from fossil fuels. However, there are significant concerns all around the world that concrete plans for these just transitions are sorely lacking. ‘Our members don’t believe, and we don’t believe, that the notion of a just transition really has any meaning for them,’ adds Smith.

The question therefore, as we stride forward into a new, low-carbon age, is whether governments and policy makers have really considered the workers who will be left behind? If they haven’t, many academics and activists now claim that we are simply shoring up social problems that could last for decades to come. What’s more, they argue that ignoring the plight of workers serves only to dent public support for crucial climate change policies, fuelling a sense of injustice that can be exploited by populist leaders.

WEBshutterstock 139762711 1A coal mine in the mountains of Alberta, Canada, where coal is still hugely significant to the local economy

THE JOBS THAT MUST GO

It’s not easy to quantify the number of jobs that will be lost as a result of fossil-fuel phase-outs, but estimates suggest that if national governments move ahead in line with current climate goals, the numbers will be significant, with some regions faring particularly badly. Many communities around the world are still dependent on fossil fuel-based industries, whether it be the coal mining towns of Spain, Poland, Appalachia in eastern Kentucky and Queensland in Australia, or the oil workers of Aberdeen, Texas or Alberta in Canada.

In the UK, a 2019 report by the Independent Committee on Climate Change – the body set up to advise the government on climate change policies – concluded that ‘up to one in five jobs across the UK will be affected by a Zero Carbon Britain strategy, with job losses across oil and gas extraction, power and heating industries, as well as in supply chains for these sectors.’

Meanwhile, in the US, it has been estimated that 40,000 of the current 69,000 coal mining jobs will have to be eliminated over the next 20 years if the USA is to have any chance of meeting its carbon emission reduction targets. In Australia, around 8,000 people still work in coal mines, but regional multiplier figures suggest that if these jobs go there would be a knock-on effect of a further 18,120 jobs lost. In Canada, more than 200,000 people work directly in the oil, gas and coal sectors and hundreds of thousands more work in jobs indirectly tied to those industries. The federal government announced in 2015 a national phase-out of coal-fired electricity generation by 2030.

Industry loss in small areas has also been shown to have impacts far beyond individual workers. ‘Something that’s come out in our reports is the sense of a Russian doll effect,’ says Nick Robins, a professor of sustainable finance at the London School of Economics (LSE). ‘Clearly, workers in a coal plant will impacted, but the people who might be more greatly impacted are those in the community. The local cafés, hairdressers, associated businesses and so on.’ 

It’s a vision that rouses memories. Looking back to the UK coal mine closures of the 1980s, Phil Pearson, a former senior policy advisor at the TUC, remembers that, ‘thousands of jobs went, pits closed and villages have never recovered because there was no plan. The scars of that period are still visible.’

WEBshutterstock 1038834505In several towns around the world, employment in coal mines is all some workers have ever known

HOW CAN IT BE DONE?

On the plus side, there are gains to be had from a net zero-carbon transition. Most research on this topic offers a stark but encouraging choice: manage the process badly and expect to fuel inequality and economic instability, but manage it well and we could see employment increase and economies thrive.

So how can the transition be managed well? A number of suggestions have now been published in reports, both by trade unions representing fossil-fuel workers, and by environmental organisations. The two might seem unlikely bedfellows, yet participants in these two sectors are coming together to argue for the collision of climate policies and just transition principles (though there are also groups that still embrace a much more binary outlook of environment versus jobs).

Among those that have joined forces, there are some unsurprising differences in outlook – for environmentalists it all starts with cutting and redirecting the subsidies provided to oil, gas and coal and phasing out fossil fuels, while trade unionists put more hope into carbon-capture technology, which they argue could enable plants to continue – nevertheless, both groups agree on many core principles. 

‘We’ve been campaigning for a long time for a just transition,’ says Pearson, now a member of the Green Alliance – a group of environmentalists and trade unionists promoting job creation in green industries. ‘That phrase embodies a number of principles that together should avoid the worse consequences of previous transitions, which have left communities and workers stranded. The headline one is social dialogue, so that’s consultation between unions, employers, governments and other stakeholders to create meaningful plans. Point two is job creation – that’s investment in a just transition and building technologies to replace the jobs that are going.’

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This type of investment could result in more than enough to jobs to replace those lost, according to some researchers. The latest report from the New Climate Economy – an independent international body comprised of former heads of government, finance ministers and business leaders – concludes that low-carbon growth and ambitious climate action could generate over 65 million new low-carbon jobs in 2030.

When it comes to the UK’s large oil and gas industry, a 2019 report produced by Friends of the Earth Scotland titled Sea Change concludes that the country could fully transition from fossil fuels to renewable energy before 2050 and ‘given the right policies, job creation in green energy industries will exceed affected oil and gas jobs more than threefold.’ The report envisages the growth of jobs in offshore wind, marine renewables and energy efficiency retrofits in homes across the country. To ensure this growth, the authors of the report call for investment and public sector participation in the clean economy, for example through national investment banks.

At the LSE, a project called ‘Financing the Just Transition’ also envisages an important role for the private sector, suggesting that rather than simply divesting from fossil fuels, financial institutions start to back companies with just transition plans in place.

Of course, for a true just transition, the key is to ensure that enough of these new jobs overlap with the communities and workers set to lose out. This is helped by the fact that many workers in oil, gas and coal possess transferable skills. Another recent report by the LSE estimates that in the UK around a fifth of the economy will be affected by decarbonisation and, that in this scenario, ten per cent of workers have skills that the transition will require more of, while ten per cent could need reskilling. 

For those who won’t be able to transition easily, campaigners are calling for a range of worker-protection measurements. Equivalent job guarantees, retraining programmes and offers of early retirement are all deemed essential.

WHO’S DOING WHAT?

To date, no national government has implemented a coherent just transition policy that encompasses all – or any – of the aspects above, though some have expressed more intent than others. In Scotland, a Just Transition Commission was set up in 2018 to advise Scottish ministers on how to implement just transition policies. The German government has created a Special Commission on Growth, Structural Economic Change and Employment tasked with producing just transition plans for the two remaining lignite mining areas.

Likewise, in Canada, a Just Transition Task Force has been advising the government on how to fairly move away from coal-fired electricity and CAD$45 million has been put into transition funds. In one report, members of the task force relayed conversations held with coal workers and their families from four affected provinces, which clearly demonstrated a pervasive sense of helplessness. In the Canadian region of Coronach – a place where the coal industry indirectly or directly supports two-thirds of residents – one community member was reported as saying: ‘What will we do for work? Where will we live? What are our options?’

Many of the interviewees also called for exactly the kind of policies being recommended by campaigners and advisors. ‘I retire in less than ten years and now I have to look at another job to get my pension. I’m too old to go into the job market. I need this job to retire,’ one coal worker was noted as saying.

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There have also been some attempts to soften the blow where plants have already closed. In March 2017, Hazelwood Power Station in the Latrobe Valley, east of Melbourne, shut down. As the highest polluting power station in Australia it was an environmental win, but came with the loss of 750 jobs. Following the announcement of the closure and consultation with unions, the local government unveiled a $266million transition package to help the region adjust, including retraining schemes and funding to attract an electric vehicle factory to the region. Originally welcomed, the scheme has had mixed success. Figures released by the local government show that of the more than 850 workers to take part in the scheme, only 306 are now in full-time work. Despite this, an article on Australia’s ABC News site noted that two years on from the closure, the region’s unemployment rate is down by eight per cent.

Nevertheless, aside from these relatively isolated attempts, it is difficult to find examples of concrete just transition plans. Certainly none exist on the scale necessary to deal with the job losses forecasted to accompany decarbonisation.

In contrast, it’s not hard to locate examples of protest, anger and fear. One such example first reared its head in Fife, Scotland, in 2017 when workers at BiFab, an engineering firm that builds large-scale equipment for the offshore oil and gas industry, and more recently, platforms for offshore wind turbines and tidal generators, staged rallies and occupations to protest plans to sell-off the company’s yards. 

A number of large wind farm projects are in development a short way off the Fife coast and the workers argued that they already possessed the skills to manufacture parts for these farms. Direct action by workers led the Scottish government to step in with a £15 million loan to keep the yards open in late 2017, but the BiFab workforce of about 1,400 people is still at risk. The yards have secured a few contracts, but the majority of manufacturing work for offshore wind farms being built in Scottish waters has been awarded to overseas companies in Belgium, the UAE, Indonesia and China. 

WEBshutterstock 1282351948 1In 2017, after the final day of work at Hazelwood Power Station, Latrobe Valley, workers hung their hard hats on the gate

For environmental group Friends of the Earth Scotland, which runs a just transition campaign, this case is indicative of a wider failure to prioritise UK renewables jobs. ‘We’ve grown our renewable energy generation, but lost out on lots of jobs in the supply chain because we haven’t invested in ports and we haven’t invested in fabrication yards,’ says Ryan Morrison, just transition campaigner at Friends of the Earth Scotland. In fact, new figures published on 16 January by the Office for National Statistics estimate that green jobs in UK have actually decreased from 235,900 in 2014 to 224,800 in 2018.

For workers, this makes the idea of a just transition seem laughable. ‘To working class communities in Burntisland and Methil this doesn’t look anything like a just transition or a green jobs revolution,’ read a joint statement released in February 2019 by the BiFab trade unions, GMB and Unite.

Similar fears abound in some parts of the US. While investment in renewables has increased – in 2016, the solar industry employed around three times more workers (373,807) than coal (160,119), while wind jobs lagged behind on just over 100,000 – the opportunities are not evenly distributed.

‘Our members are already losing their jobs and there’s nothing equivalent there to replace them,’ says Smith. ‘We are seeing examples in Spain and Germany and Canada where workers have been given a certain amount of pay for a certain number of years, so they can go and learn other skills, and older workers have received pensions early. Those are examples that perhaps can be built upon in the US but the political situation here is vastly different. Not only can we not define what a just transition is, I’m not sure that politically we could ever agree on it.’

THE BIG PICTURE PROBLEM

There’s a wider risk to ignoring just transition principles. ‘The legacy of not planning for a just transition is to inculcate resistance,’ says Pearson. ‘One of the consequences has been that in very high-carbon countries like Poland, where hundreds of thousands of jobs have gone in coal and steel in the last ten years, there’s been a real kick-back against national government policies on climate change and the EU. It’s exactly what happened in the American coal heartlands too.’

Pearson’s warning is echoed by many others, not least by the signatories of the Just Transition Declaration, a document signed in Poland at the COP24 of 2018. The declaration stated that: ‘Public policies to reduce emissions will face social resistance and significant political risks for the governments implementing them if they are not accompanied by social security programmes for workers whose jobs will be lost or transformed’. Even as it was signed, the region’s mining unions demonstrated outside – arguing against what they deemed the job-killing strategies being debated within.

Given these wider implications, it is surprising that there has been little obvious adoption of just transition principles. The reasons why are numerous and vary between countries. In the UK it is partly down to a contradictory policy backdrop. Enshrined in the Infrastructure Act 2015, the government still has a duty to maximise economic recovery of oil and gas. According to Pearson it also comes down to the type of governments the country produces. ‘A just transition package requires a kind of government that we have not had in the UK,’ he says. ‘Social dialogue doesn’t exist. We have a very poor record of support for skills and retraining. All the policies require a more open-minded and progressive approach to civil society, particularly in terms of trade unions.’ 

Elsewhere, such as in the US, support for fossil fuel industries makes the issue even more complicated. ‘Currently you have an administration that doesn’t believe or at least doesn’t acknowledge publicly that the coal industry is failing.’ says Smith. ‘The political narrative is that coal is back, even though it’s not.’

To combat this limited action by national governments, thousands of community groups, many of which are run by low income communities, people of colour or indigenous people, have taken matters into their own hands, campaigning and supporting the unemployed. But without the new jobs to transition into, their impact is limited. Ironically, the battle cry of many of these groups holds that: ‘Transition is inevitable, justice is not.’ Yet the real threat goes even further – a lack of justice could in fact impinge on the inevitability of the transition.

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