16. November 2020How to Unravel the Challenges of Structural Change?

Fossil fuel producing regions are at the forefront of this challenge. Shutting down significant portions of the regional economy forces those regions to reinvent themselves in economic terms. Moreover, mining and heavy industry have often coined the regions’ identity, they have left their marks on the regional institutional and political structure and have shaped the regions in socio-demographic terms. Hence, a phase-out of fossil fuel mining and the decarbonization of high-carbon industries will inevitably have severe ripple effects in the regions’ economy and society. Yet, there is scant scientific research available that can guide the regions in adjusting to the imminent structural changes.

Shedding a light on the flipside of sustainability transitions

Transition research initially focussed on successful transitions and the emergence of new, more sustainable technologies and practices, but lately the focus has shifted towards the phase-out or discontinuation of incumbent technologies and practices. While the importance of the economic and socio-political environment as factors for successful transitions is well established, there is hardly any research that looks at this relationship in the other direction and asks what the transformation of socio-technical systems implies for the socio-political and economic environment of regions in which the corresponding industries are concentrated.
Meanwhile, regional studies and economic geography have studied spatial implications and the determinants of regional development but have largely focussed on the bright side, highlighting the foundations of success stories of regional development. Only very limited research exists on why regional development fails. Yet, many of the success factors for regional development that underpin economic and social prosperity in carbon-intensive regions are seemingly at odds with the decarbonization objectives. Regional economists have highlighted the important role of regional industry clusters and specialisation for a region’s economic success. But what are the options if the very clusters and areas of specialisation that form the foundation of a region’s economy become obsolete?

The CINTRAN project aims at closing this research gap by systematically studying the patterns and dynamics of decarbonization at the regional level as well as the conditions of a region’s capacity to adapt to the related structural changes. At the theoretical level, we will seek answers to three major research questions:

• What are enablers, drivers and barriers for transforming carbon-intensive industries?
• What are the system overlaps between the carbon-intensive industry under transformation and the regional economic and social systems?
• And what makes a transition and subsequent structural adjustments “successful” from a normative perspective?

Which structures condition structural change?

Building on theoretical insights, CINTRAN will combine qualitative and quantitative methods to empirically study both structural factors as well as agency, i.e. the ways and means in which regional stakeholders and policy makers can manage the structural adjustments.

Quantitative methods will be applied to identify key socio-economic implications of decarbonization for the 10-20 most vulnerable regions in Europe. We will break down the energy system implications of national climate and energy plans at the regional level and quantify their socio-economic impacts including on regional value creation and employment. We will also take into account outward migration and political implications (voting patterns).
Qualitative methods will be applied in in-depth case studies on four carbon-intensive regions: Ida-Virumaa in Estonia, the Rhenish Mining area in Germany, Western Macedonia in Greece and Silesia in Poland. These case studies will combine three analytical lenses:

• First, through the socio-economic lense, we will study the regions’ economic dependence from the carbon-intensive industry, also taking into account other mega-trends such as globalization, automation and digitalization.
• Second, focussing on socio-political conditions for adaptive capacity, we will study the institutional set-up and politics of decarbonization in the four regions, including with respect to the role of populism and anti-democratic attitudes.
• Third, with the socio-demographic lens, we study aspects such as migration, gender and various dimensions of inequality that may impinge on a region’s capacity to manage the transition in a just and equitable way.

The four regions were selected strategically to cover a wide range of different circumstances including with respect to socio-economic development, degree of economic differentiation, type of fossil fuel used and ambition and timeline for decarbonization.

In which ways can regional stakeholders pro-actively shape structural change?

While structural factors such as those listed above condition the available transformation pathways, they do not determine them. There is always room for agency. CINTRAN will therefore study ways in which regional stakeholders and policy makers respond to the transformative changes at the political, economic, social or cultural level induced by decarbonization. We study coping strategies, practices that successfully restore or create agency and help regional stakeholders to adapt to changes in a self-determined proactive manner.
To support agency on the part of regional policy makers, we will develop a tool to help them to self-assess and monitor the progress of transformation and evaluate the policy mix in place to facilitate the transition and structural adjustments. It will help them to better understand where they are on their respective transformation pathway and which policies and interventions are available to make the next successful steps.

The final step of the CINTRAN project is to make the knowledge available to practitioners and academics. As a necessary precondition, CINTRAN needs to make sure that the research questions addressed are actually corresponding to the questions that stakeholders and regional policy makers ask. In order to tailor our research to their needs, we have designed CINTRAN in a transdisciplinary manner involving regional stakeholder partners in the consortium and working closely with experts in the four case study regions. To make our research outputs accessible, we will prepare dedicated materials targeted to regional stakeholders and policy makers including policy briefs, guidance documents, webinars as well as our flagship Transition Academy events, an intensive multi-day training programme.

According to the Oxford Dictionary, “unraveling” has two distinct meanings. Firstly, it means to explain and solve a complicated or even complex problem. And secondly it signifies the beginning of the failure of a system or a plan. In a sense, CINTRAN is trying the first to avoid the second; to contribute to a better understanding of the structural challenges faced by carbon-intensive regions in order to help them avoid economic and social collapse.

 

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Authors

Lukas Hermwille
Senior Researcher
Wuppertal Institut for Climate, Environment and Energy
Energy, Transport, and Climate Policy Division
Global Climate Governance Research Unit