Transition has to be started now

Ramping up production at Balcombe’s new power plant – CC BY 2.0 – Photo by 10:10

It is urgent to start anticipating the transition now to get the best results for workers, communities and businesses.

A successfully managed coal mining transitions can take up to 25 years, in order to ensure new jobs for workers, regional economic regeneration, and company reinvestment in new business models. Given the imperative and the likelihood of a relatively fast phase down of global coal use from the 2020s onwards, stakeholders need to begin a managed and controlled transition today. If not, they risk more serious consequences of more abrupt and unmanageable changes later on. Once they begin, coal transitions can move fast, at which point it can be impossible for governments to deal with effectively.

If well-anticipated and actively managed, just transitions are possible.  Anticipated transitions show much better ability to avoid or minimise key risks. The example of Limburg region in the Netherlands illustrated that

  • higher levels of re-employment,
  • company reinvestment in new business models,
  • and regional economic regeneration are possible

given time, re-investment and sufficient social and political consensus.  In that case, a transition of approximately 75 000 mining workers into an alternative employment (or in some cases retirement) was achieved over a period of 10 years. A significant percentage of affected workers were able to be retrained and found new employment within the same coal mining company, as it diversified its activities into other activities in the region, most notably chemicals.

 

On the contrary, unplanned transitions often led to multiple problems:

  • higher rates of long term unemployment and “inactive” prime age workers unable to re-enter labour force
  • higher risks of large companies going bankrupt
  • poorer long term regional economic performance
  • lower tax revenues for local services, unpaid-for environmental remediation
  • and unpaid pension and/or health care programs.

In the UK case, the lack of anticipation and active management of the removal of support for coal mining in the 1980s has lead to unemployment rates in former UK coal mining regions that are 3 to 6% higher than the national average, even 30 years later.

Early anticipation is especially important in regions which are highly specialized in coal, and geographically isolated from more economically dynamic regions.

In regions like Kent and parts of the Midlands, UK, where coal mining activities were smaller and local economy has prospered thanks to other activities, employment creation as a whole was held steady. In other more remote areas, such as Ayrshire, Northumberland and south Wales, job regeneration has been less impressive. These cases therefore have very different policy implications, paying special attention to more isolated regions where coal and related services are a significant share of the economy.