Supporting just transitions in Canada and Germany

In Germany and Canada, the energy transition is leading to structural change in the energy system. Policy-makers in both countries face the task of managing this structural change and achieving a just transition, which minimises disruptions for affected workers, industries, and communities, and leverages the opportunities of the transition. Through their Energy Partnership, Germany and Canada are collaborating on the just transition. Within this cooperation, this study aims to contribute to a better understanding of the challenges posed by structural change in the energy sector and the lessons-learned from previous structural and just transition policies. For that purpose, Germany’s sixty-year experience in managing the decline of its coal sector is analysed and the lessons for policy-makers are highlighted.

Looking back at Germany’s experience, a number of key lessons can be highlighted for policy-makers on how to deal with structural change in the energy sector and support affected workers, industries, and regions. First of all, policy measures should be anticipatory and forward-looking to enable a just and in-time transition. Indeed, there seems to be a first-mover advantage when responding to structural change in the energy sector. Push-back and attempts to delay the transition can hinder innovation and diversification. Second, regions following a more diversified approach tend to be more resilient and successful in managing the transition than those relying on fewer industries or employers. Third, successful policy approaches cross administrative boundaries, political levels, and policy fields, and rely on public participation. Fourth, labour market and social policies are important to cushion social hardships for those workers within the energy sector with fewer career alternatives. Lastly, each region is different and there is no one-size-fits-all solution. Successful just transition policy will need to be designed in cooperation with the affected regions and communities, taking into account their specific circumstances and leveraging their respective advantages and potentials in the energy transition.