German Just Transition: A Review of Public Policies to Assist German Coal Communities in Transition

This report examines public initiatives implemented in Germany to support workers and communities impacted by the decline in coal production from the 1960s to the present. The main goal is to present key policy alternatives and lessons from the German case to inform Just Transition (JT) processes in other countries and regions.

With the prospect of phasing out coal and sharply cutting use of other fossil fuels in the United States due to greenhouse gas mitigation efforts, it is worth looking at the successes and failures of past transitions. Germany has intentionally steered its coal reduction process since the 1960s to prevent detrimental economic and social consequences. A central characteristic of the German approach to mitigate the impacts of coal decline for workers and regions is the use of integrative policies based on a combination of policy goals and mechanisms.

The report examines historical policies (implemented between 1968 and 2019) and present policies. Their main goals can be characterized as (a) economic diversification and reorientation; (b) workforce support; (c) social well-being and quality of life, and (d) environmental remediation and protection. Moreover, these policies have commonly employed three mechanisms: (1) financial support for public organizations, businesses, and workers; (2) service and assistance for public organizations, businesses, and workers; and (3) direct investments.

Large public investments in infrastructure and environmental remediation have been central goals of the policies analyzed over time. Providing financial support and assistance for businesses and workers has also been a key component of most policies. These policies especially targeted businesses until the 1980s. In more recent decades, a tendency toward financial support of local governments and nonprofit organizations can be observed.

The report also characterizes the implemented policies according to their governance structures, namely their design, implementation, and forms of public participation. From the 1960s through the 1980s, top-down policies predominated; these were designed, implemented, and administered by subnational governments with limited participation of local stakeholders. Since the end of the 1980s, municipal governments have implemented a more regionalized approach with bottom-up policies, including local participation.

Beyond the policies that explicitly support coal workers and regions, key “baseline policies” played a large role in JT in Germany. They include the German social security system, the labor system, and the system for regional fiscal equalization.