Governments should prepare to pay coal operators to shut down plants and compensate impacted workers and communities, study argues
Policymakers are underestimating the challenge posed by phasing out coal, with detailed roadmaps needed to carefully plan coal plant retirement accompanied by a range of policy measures and funding to support affected workers and communities, a group of leading energy experts have warned.
In a new research paper published in the journal Nature yesterday, the authors - which comprise 13 experts and academics from the UK, Germany, India, Australia and the US - outline the scale of the challenge involved in weening the world off coal.
While the power sector must stop using coal without carbon capture-and-storage within 30 years in order to achieve global climate targets, the research points out that coal combustion still accounts for 40 per cent of global CO2 emissions from energy use, with demand still growing in China, India and other populous Asian countries.
As such, in order to accelerate the global coal phase-out and keep global warming within Paris Agreement thresholds, governments should remove all coal subsidies immediately to create a level playing field for clean energy sources, the study suggests. And, in the longer-term, governments should also be prepared to pay billions of euros to operators of coal-fired power plants in exchance for agreements to shut down their plants early, it adds.
The study authors also recommend extensive compensation for regional economies hardest hit by the loss of coal producers and energy intensive industries to ensure a 'Just Transition'. State investment in local transport and communication infrastructure, higher education provision and new business opportunities, as well as the relocation of government services, will be needed to support these areas, the researchers argue.
State support will also be essential to shield the poor from electricity price rises resulting from replacing coal plants with more costly alternative power generation, they add, advocating measures such as adjusting electricity tariffs, investing in community benefit funds, or subsidising energy efficiency through weatherisation and retrofits programmes targeted at the most in need or vulnerable.
"Coal phase-out can only succeed if it takes into account social objectives and priorities," said Dr Michael Jakob, lead author on the study from the Mercator Research Institute on Global Commons and Climate Change (MCC) in Berlin. "It is crucial that the modalities of coal phase-out are seen as fair and that the process corresponds to political realities. Policymakers need to understand in more detail who will be affected by a transition away from coal, how these societal groups can be effectively compensated and how powerful vested interests can be counterbalanced."
Co-author Benjamin K Sovacool from the University of Sussex acknowledged that "paying billions to some of the world's biggest polluters to avert a climate catastrophe they helped to create may sound unpalatable to some environmentalists." However, he argued that "compensating the biggest losers from coal phase-out, alongside improving equity and accountability processes, will go a long way towards achieving all the other aspects of just energy transition including legitimacy, desirability, speed of transition and financing".
"Simply put: a just transition requires more than just safeguarding jobs, and involves protecting the resilience of entire communities across both high-carbon as well as low-carbon energy pathways," Sovacool concluded.
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