Ahead of the One Planet Summit the EU has sent an admirable message to those communities that risk losing out as a result of decarbonisation
How do you phase out an industry without wreaking immense damage on the communities that rely on it? It is a question that should trouble anyone who advocates for a low carbon transition and one that has immense political ramifications if an answer is not found.
The reality is that the low carbon transition will create significant losers as well as winners, and while it is easy to quote projections that suggest green industries can create more jobs and economic growth than the fossil fuel industries they displace that is cold comfort for the communities that see carbon intensive jobs lost and their replacements struggle to materialise. Net economic gains become meaningless for some communities if the benefits are not shared.
This challenge becomes even more pronounced when you consider how carbon intensive sectors such as coal mining, thermal power stations or heavy industry are, by necessity, geographically concentrated. In contrast, clean infrastructure tends to be much more geographically dispersed. You can quote the statistic about how more people are employed in solar than coal mining as often as you like, it does not make it any easier for thousands of unemployed coal miners in a single community where the mine has just shut to move to jobs that are spread across the whole of the US.
The past two years have provided elites on both sides of the Atlantic with a case study for what can happen if you do not take this transition risk seriously. There is a thesis waiting to be written on how both Trump's election victory and the Brexit vote were a direct result of successive governments' failure to address the question of what happens to a region when carbon intensive industries shut up shop.
Consequently, today's move by the EU to launch a new platform to help carbon intensive regions cope with the low carbon transition promises to be an important step towards ensuring climate action does not lead to economic collateral damage for communities that are reliant on high carbon employers.
Just days after a key European Parliament Committee voted in favour of more ambitious climate targets for the bloc and a day before French President Emmanuel Macron's One Planet Summit in Paris, the new Coal Regions in Transition Platform is admirably unequivocal in its stated goals.
"The EU's commitment to a clean energy transition is irreversible and non-negotiable," the Commission confirmed in a statement. "In this shift to a more sustainable future, no regions should be left behind when moving away from an economy driven by fossil fuels."
The Platform effectively underscores the logic of the EU's support for the Paris Agreement, which in setting a goal to keep global temperature increases well below 2C this century effectively ensures there is a firm deadline for the use of unabated coal power. As Commissioner for Climate Action and Energy Miguel Arias Cañete observed today: "Governments, business and regions all around the world are moving beyond coal. Electricity generation from coal is declining. This is an irreversible trend towards clean power, also here in Europe."
As the Commission notes, this trend is only likely to accelerate in the coming years. A number of member states, including the UK, France, and Italy have all pledged to phase out unabated coal power over the coming decade. Meanwhile, a major report from think tank Carbon Tracker last week highlighted how over half the coal plants currently operating in Europe are loss-making, with few signs that a turnaround in their financial fortunes is imminent. At the same time, investors are under growing pressure to ditch the sector, with green campaigners today publishing a new report detailing how top banks are in defiance of the Paris Agreement if they continue to lend to coal operators.
As clean energy advocate and founder of Bloomberg New Energy Finance Michael Liebreich observed recently, "the war on coal is over, coal lost".
However, if this victory is hugely welcome from an environmental and health perspective, it poses particular challenges in terms of regional and economic cohesion. According to the European Commission there are still 41 regions in 12 Member States that still actively mine coal, providing direct employment for around 185,000 citizens. There will be hundreds of thousands more people who are employed indirectly as a result of the industry, not to mention millions of people who owe their living to similarly high carbon sectors that will have to change dramatically in the coming decades if the Paris Agreement's goals are to be met.
The Commission notes that its new Energy and Climate package, of which the Platform is a part - will create hundreds of thousands of new jobs as the bloc seeks to step up the pace of decarbonisation through to 2030. For example, the number of renewable energy jobs across the EU has already grown by 70 per cent between 2008 and 2014 and around two million people already work in clean energy. There are projections suggesting 900,000 more jobs could be created by 2030 and industry insiders reckon this number could prove to be an underestimate if the renewables sector continues to outstrip growth projections. However, without co-ordinated efforts it is easy to see how regions that are reliant on carbon intensive industries could be locked out of this green bonanza.
The goal of the new Platform is to help provide this co-ordination. The Commission said it would bring together EU, national, regional and local stakeholders involved in the transition to help them foster partnerships and learn from each other's experiences. Encouragingly, it stressed that while the initial focus is on coal regions, the aim is to expand to cover other carbon-intensive regions in the future.
"The challenges facing the EU coal regions can only be addressed in partnership with all actors on the ground," said vice-president responsible for the Energy Union Maroš Šefčovič. "The Energy Union is the right framework for this. We want to work closely with national, regional and local stakeholders in support of the structural transformation, using tailor-made solutions and all means at hand. Our objective is to see every region reaping the benefits of the clean energy transition, whilst creating new jobs and promoting investment in new technologies."
It is early days for the new initiative but the Commission said it would build on two existing efforts to support communities that are already being impacted by the low carbon transition. The bloc's cohesion policy already has measures in place to encourage regions to undertake 'smart specialisation' and accelerate the development of new low carbon industries, with the EU offering "tailored support to guide structural change". Meanwhile, pilot projects have recently been set up in Slovakia, Poland and Greece to lead efforts to provide technical assistance, financing tools, and guidance on how to access EU funds for the regions of Trencin, Silesia, and Western Macedonia.
Whether these initiatives can fully cushion the impact that results from the environmentally essential decline of the coal industry remains to be seen. But it is clear the EU is aware of the risks involved of failing to support carbon intensive regions as they are forced to adapt to an increasingly low carbon economy. After all, it has happened before. The digital and finance-driven boom years the UK enjoyed in the '90s and 2000s did relatively little to drive economic activity in the regions that were hit by coal mine closures in the 1980s, and now the more savvy supporters of the low carbon transition fear a repeat of the industrial strategy mis-steps that caused so much dislocation last time around.
There are also compelling political reasons for refusing to simply leave regions to adapt to the energy revolution on their own. The creation of any 'left behind' regions would simply serve to fuel public opposition to the green transition, which some traditionalist trade unions are only too happy to vocalise. In addition, the failure to demonstrate how carbon intensive regions and economies can adapt is likely to entrench opposition to bold climate action from the EU's more coal-reliant states.
As Commissioner for Regional Policy Corina Creţu explained, the new plan is about sending a clear signal to coal communities. "Working together for a better common future is what the European Union and Cohesion policy are about," she said. "Our message to coal regions today is that the European Commission takes concrete actions to help them achieve a smooth transition towards a modern, sustainable and successful economy that leaves nobody behind."
The environmental and economic benefits of the low carbon transition will transform economies around the world. It is encouraging to see governments attempt to get out ahead of the curve to ensure these benefits are evenly shared, so the war on coal does not result in long term economic casualties.
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