Sandeep Pai is a Director for Research and Strategy at Swaniti Global. Send your comments to sandeep.p@swaniti.org
To keep global warming well below 2°C the world needs to decrease the production and use of coal rapidly. The technical barrier to moving to renewables has never been so small because of the falling costs of wind and solar power. But for the world’s top coal countries, significant challenges remain. From West Virginia, United States, to Chhattisgarh, India, coal production provides millions of jobs, anchors local economies, pays worker pensions, and contributes to society through taxes or directly paying social services. Even though coal production and consumption can have harmful air and water impacts, the benefits felt in coal communities are critical. For coal-dependent regions, a global energy transition will have outsized costs.
Just transition is justified by both the needs of coal communities and the need for global decarbonization. Even though the concept of just transition has been around for 40 years, it is one of the newest trends in international climate circles. But to be successful, the conception and implementation of just transition programs, policies, and politics will have to occur at the
regional, state, and even municipal levels. This is an international priority, but a sub-national problem.
As coal dependency is often regional, any coal transition will have outsized impacts on coal-dependent sub-national jurisdictions such as states or provinces. Many coal-dependent sub-national jurisdictions around the world will face similar losses when coal production and use diminish. To counter these losses – that range from jobs to revenue – these sub-national jurisdictions will need to formulate just transition policies focusing on economic diversification, environmental remediation, retraining of workers, and other priority topics. These coal-dependent states will also need to mobilize ideas and coordinate just transition policies with the federal government and local governments.
Globally, countries and the states within them are at various stages of formulating and implementing just transition policies. For instance, in the United States (US), where the coal sector has declined rapidly over the last decade, some states are actively pursuing just transition policies. For example, Colorado created the Office of Just Transition (OJT) in 2019. This office facilitates the implementation of just transition policies in the state, which focus on providing “wage and health differential” and “wage and health replacement” benefits for workers and creating diversified local communities. As another example, Mpumalanga, South Africa’s most coal-dependent province, created a “green economy cluster” to coordinate and implement just transition policies and attract investments. In contrast, most Indian coal-dependent states haven’t yet grappled with the idea of what just transition means and how to begin creating just transition policies.
As states around the world navigate this transition, it is important to facilitate linkages between them, which will allow states at different stages of just transition planning to learn from one another. Such linkages and the associated peer-to-peer learning are currently lacking, including between coal-dependent states that are facing similar socio-economic declines from the energy transition. This type of sub-national peer-to-peer collaboration has worked in the past and led to fruitful outcomes in the clean energy space.
Such partnerships are necessary between and across different categories of stakeholders such as:
State-level peer-to-peer engagement can help facilitate learning about the models and policy choices that will help ensure the energy transition is just. Take the case of local economic diversification, a key element of just transition. As states lose major industries such as coal mining or power that are vital to their economies, they will need to identify ways to diversify their economies and attract new industries. Colorado’s just transition action plan includes a strategy that involves the Colorado OJT working alongside the Colorado Treasurer’s Office and other experts “to create an effective and accountable governance structure and a network of financial institutions to support investments in coal transition communities…” The outcome of
this Colorado initiative and insights about what did and did not work can provide invaluable lessons for other states in the US and other countries. For example, such insights can help other states understand the kinds of funding and investments that might be available for just transition in coal-dependent states. However, for such lessons to be shared, policymakers and other actors at the state level must engage directly.
Another example is that of environmental remediation. In most coal-producing countries, there are hundreds of coal mines that have not undergone proper mine closure and remediation. However, environmental remediation of recent and legacy mines and power plants is vital for regional economic diversification, as degraded land and waterways make regions less attractive for new companies or investors. In addition, environmental remediation work will create jobs for local communities. In the coal-dependent state of Jharkhand, India, there are a few examples where coal mine remediation has supported the creation of local jobs. Coal India Limited, India’s most significant government-owned coal company, has conducted ecological restoration projects at certain abandoned coal mines. These projects cleaned up the mine site and created mini-forests of shrubs, plants, and trees. The projects ran for over five years and employed many local residents. These projects were so successful that the federal Indian Ministry of Environment, Forest and Climate Change is considering issuing guidance to the entire coal industry requiring them to conduct similar remediation projects. Lessons from such successful projects and initiatives will be of tremendous value for sub-national jurisdictions around the world who are
seeking to implement just transition policies.
Just transition is a complex process that will span decades and involve the planning and implementation of a network of policies. Coal-dependent provinces and states are at different stages of transition and have much to learn from one another. Creating a North-South hub for information exchange and collaboration between states will help catalyze just transition at the sub-national level.