What is a just transition

TL;DR

Explanation

There’s a lot of concepts in this topic - looking after the workers who will lose jobs as old industries die, restoration of lands where fossil fuel industries once operated, opportunities for the Global South to gain and not be exploited by the Global North and more.

Jobs jobs jobs

Workers are going to lose their jobs as the decarbonisation of the economy happens. That doesn’t mean there won’t be other jobs for them, but as coal mines close down where do those workers go?

The coal industry is probably easiest example to use here, but this will play out across the fossil fuel industry. Coal miners are for the most part tradespeople with transferrable skills. There are other jobs out there, but there’s no guarantee they pay as well.

Politicians and industry leaders are putting their heads in the sand and pretending there’s no end coming. Some politicians are even promising to bring back jobs in coal.

When coal mines go bust, there’s a large and sudden impact to the economy and then the government is called upon to act by putting together some last-minute support package to help out the workers who not only lost their jobs but in some cases their owed pay, redundancy entitlements and retirements savings (known as superannuation in Australia). Rather than wait for these emergencies to happen, a proactive approach would be to engage with these industries in advance. Understand what the workers want, help them reskill if needed and find new jobs.

Sounds simple, but of course it’s also more complicated - are the new jobs in the same area? Are the workers going to have to move? Will the new jobs pay more or less?

I’ve only used coal miners as an example, but there’s going to be economy wide impacts:

• Farmers
• Tourism operators
• Transport (ICE maintenance vs EV maintenance)
• and many more

Politicians, like problem gamblers only want to focus on the positives. This entire topic and serious effort to help these workers is avoided by the major parties like it is the plague.

Restoration of lands

Typically when a fossil fuel project is approved there’s a requirement for the company to have funds set aside to clean up the site(s) when the project is over. This money is used to repair environmental damage left behind by the coal mine, the oil well, the gas well. Well that’s the theory and imagine if it was true and actually worked.

Because fossil fuel projects run for a very long time, the company that started it might not be the company that owns it at the end of life. The money set aside might have never existed. The money required to be set aside might not be enough to repair the site because of inflation, underestimation of the costs, changing project scope during the life of the project and much more. So rarely is there any, or enough money to clean up a fossil fuel project at the end of it’s life.

As we move to decarbonise the economy we’re hopefully going to see the end of life of a lot more fossil fuel projects but we’re about to find out there’s not enough money to clean up after them. Governments are then usually the ones that have to pay to clean these up - this is called privatising the profits and socialising the losses. Taxpayers are now paying.

In Australia alone there’s around 60,000 mines that are closed or abandoned according to The Australia Institute.

Australian Oil & Gas giant Woodside sold a massive offshore oil rig to a smaller company that then went broke and didn’t have the funds to clean it up. In that scenario the government is trying to levy a fee on the entire sector of the industry to cover these scenarios. Oh wait, in the end taxpayers are going to pay the $200 million to clean it up.

It’s happening in the US too - US landowners sue to force oil company clean-up of abandoned wells.

Don’t forget their northern neighbour, “Canadian oil and gas companies are failing to make plans to pay for $72 billion in future decommissioning liabilities for oil and gas wells, pipelines, and facilities.”

Imagine what heinous stuff they’re trying to get away with in the global south where there’s less scrutiny.

Where will we put the new stuff?

Speaking of land use - deploying renewable energy and other clean tech at global scale is going to require land. It’s usually thrown up as an excuse not to do things. It’s a problem not as big as made out because a lot of renewable energy generation can be dual use - e.g. solar panels on the roofs of existing buildings, and farming alongside wind turbines.

However, whose land and how those decisions are made is a massive risk for any renewable energy deployment. Renewables cannot just be put anywhere, there are preferences based on performance, but the road to success involves the impacted communities. Ketan Joshi’s book Windfall has some great examination of this topic and keys for success. If we don’t heed the experience of what we’ve learnt so far and just force renewables into communities that don’t want them, it’s bound for failure and generates further backlash against decarbonisation efforts.

The same applies for carbon reduction tech - direct air capture, reforestation and more.

There is a right way and a wrong way to go about this.

What about those who can’t afford it?

While “How much will all this change cost?” is the argument for climate action delay, there does need to be consideration for who bears the cost of change. How will people below the poverty line or just making ends meet switch their stove from gas to electric? How will they deal with the rising cost of fossil fuels for their vehicle that they can’t afford to replace as the production of fossil fuels declines.

While early adopters wear a cost upon entry as new technology is usually more expensive until it reaches mass adoption, those at the end of the transition will suffer from rising ongoing costs if they don’t have the capital to make the changes.

Similarly not everyone is in control of all the things that they can or want to change in their own lives - for example renters can’t control how their residence is heated or the insulation it has or the appliances built-in.

Further reading

What is a just transition?

What Do We Mean By Just Transition?

Windfall