National and global mitigation scenarios consistent with 1.5°C require an early phase-out of coal in major coal-dependent countries, compared to standard technical and economic lifetimes. This appears particularly apparent in the light of recent massive investments in coal power capacity, the significant pipeline of coal power capacity coming online, as well as upstream supporting infrastructure. This article analyses the existing and planned capital stock in the coal power sector in the light of scenarios consistent with 1.5°C. The article analyses the political economy and labour aspects of this abrupt and significant transition, in the light of domestic equity and development objectives. Firstly, the article examines employment issues and reviews the existing literature and practice with support schemes for regional and sectoral structural adjustment for the reduction of coal sector activity. Secondly, the paper surveys the domestic political economy of coal sector transition in major coal using countries, namely Australia, South Africa, China and India. A final section provides conclusions and policy recommendations.
Key policy insights
- Achieving mitigation pathways in line with limiting warming to 1.5°C, or even well-below 2°C, would require the early retirement of coal sector assets in production and consumption.
- Historically, coal sector transition has often been associated with prolonged socio-economic dislocation in affected regions.
- Policies to accompany affected regions are thus a crucial part of policy mixes to limit warming to 1.5°C and even 2°C.
- Such policies should be anticipatory and long-term, as opposed to reactive policies focused on short-term measures to smooth the transition.
- A survey of major coal using countries shows that each is a long way from putting in place a long-term framework to transition the coal sector.