By Matt Finch, business and energy analyst
Many countries are reducing the amount of coal burnt in power stations while coal mines are closing down in some parts of the world. However, there are thousands of people worldwide whose livelihood is threatened by this reduction, not to mention the millions of dollars invested in assets that will become stranded.
So far, there is a popular perception that the transitions away from coal that have happened so far (many of which were not related to climate policy) have not been handled well in socio-economic terms. The first part of the Coal Transitions research project – which will see a major report published in the Spring of 2017, accompanied by a series of national case studies – sets out to not only examine what has really happened. But it also aims to learn lessons from these transitions, in the hope that they can be applied to the upcoming global transition away from coal and form part of a dialogue between the research community, industry, governments and stakeholder on this.
However, in advance of the results of the academic research, we will examine here some interesting examples of positive transitions that should be considered, with a specific focus on urban areas. The first blog of the series will look at Leipzig in Germany. The second, to be published next week, will look at Bilbao in Spain.
The City of Leipzig existed long before coal was mined heavily in the region, and with the phase-out of coal mining now proceeding in the region, will obviously exist long after coal has gone.
The city has long been a cultural and economic powerhouse. Indeed, the University of Leipzig opened its doors in 1409, and the first German railroad was opened between Leipzig and Dresden in 1839. Open pit coal mining began in the area to the south of the City in 1924, and rapidly expanded. Following the division of Germany after the second World War, the city quickly became the industrial centre of the German Democratic Republic (East Germany). Out of 300,000 employees, 100,000 were employed in heavy industry, including coal mining.
However, German reunification hit the City, and the local coal mining industry, hard. Since West German coal mine safety and environmental standards were higher, many of the mines were closed very soon after 1990. Across East Germany as a whole, 113,000 people were employed in East German lignite mines, but this shrank to 26,000 just five years later. In the space of a decade following 1989, the population of Leipzig decreased by 100,000.
Run down building in Leipzig. (photo: Flickr/Joerg Schubert Creative Commons Licence)
The situation has however now reversed. Leipzig is now Germany’s fastest growing city, and the coal mines themselves have become tourist attractions, albeit in another form. The area the mines inhabited is now known as ‘Neuseenland’ – literally “new lake land”, and the lakes are systematically arising, phoenix like, from the ashes of the old coal mines. This is no accident.
A wholly-owned government company – Lausitzer und Mitteldeutsche Bergbau-Verwaltungsgesellschaft mbH (LMBV) – was set up with the express purpose of rehabilitating the mines. Furthermore, local (private) businesses mean that the lakes are carving out their own personalities – Lake Markkieeberg, formerly part of the Espenhain mine and one of the first lakes completed includes an artificial whitewater canoe and kayaking slalom course. Lake Kulkwitz is known for its scuba diving. Lake Cospuden has developed a reputation as the ‘party lake’. The redevelopment of the region is not planned to finish until 2050.
Leipzig Triathlon on Lake Kulkwitz (photo: Flickr/Felix Abraham Creative Commons Licence)
Not only did LMBV rehabilitate the mines, it also had another purpose. It initially employed 20,000 employees within East Germany – 20,000 jobs that were brand new and provided a route directly back into employment for at least some coal miners. This combined well with the German government’s policy of offering ‘adjustment money’ to miners who were over 50 and found themselves out of work. This money is paid for up to 5 years and equals €13,500 per year on average. In effect, this payout was a form of early retirement payment.
The second major notable policy that rehabilitated Leipzig was the deliberate attempt to develop ‘clusters’ in central Germany. Clustering involves deliberately trying to bring together universities, research institutions and business players in the same sectors into the same geographic area. This is named ‘Regionenmarketing Mitteldeutschland’ (Regional Marketing for Central Germany).
Sunset over Leipzig (photo: Polybert49, Flickr, Creative Commons Licence)
The City’s economic recovery plan focused on five sectors; healthcare and biotech; logistics; media and creativity; automotive and suppliers; and energy and environment. Companies were offered incentives to move to the region, and the needed infrastructure was put in place. For instance, Leipzig airport was expanded so it could operate 24 hours a day, and this encouraged DHL and Amazon (amongst others) to base their cargo operations there. This is reflected in the City’s unemployment figures: the rate has dropped from 21% in 2005, to 11% in 2012.
As Leipzig is proving, transitioning away from a coal-focussed economy towards something else need not be accompanied by negativity and pain. However every place is different and other places will obviously not have the unique combination of factors and characteristics that have made Leipzig a success. Our next blog will look at the City of Bilbao, Spain, which has also undergone a successful transformation of itself, to see if we can identify the commonalities between the two transitions.
(Edited by Germana Canzi)