Managing coal sector transition under the ambitious emission reduction scenario in Poland

This report presents the main economic facts on the role of coal in the Polish economy,and analyses the implications of the transition away from coal for coal consumption and coal mining employment in Poland. Poland’s energy mix relies on coal,most ofwhich is domestically produced. We argue that issues related to job creation and the cushioning of negative shocks for workers are key for the phasing out of coal in Poland, especially at the regional and local levels. Our simulations show that achieving the Paris Agreement target is feasible in Poland providedhard coal consumption is cut by 20% between 2015 and 2030,and by 55% between 2015 and 2050. We estimate that this reduction in coal consumption would translate into a decline in mining employment of 47% between 2015 and 2030, and of77% between 2015 and 2050. On the labour supply side, the reduction in employment can be achieved throughnatural attrition; i.e., through anoutflow of workers to retirement and a moderate inflow of new workers. Training programmes, vocational courses, in-work benefits, and social policy instrumentsshould be used to ease the transition.