Energy transition? Not just a transition, it must be just!

Highlights from the online debate: Just Transition - What and How to go about it?

Looking for a sustainable, equitable, and inclusive energy transition

On 7 October 2020, the Florence School of Regulation organised an online debate to discuss possible pathways towards a sustainable, low carbon and equitable energy system which is better for people and the environment in developing countries. The online debate focused on lessons learned from existing experiences with the energy transition.

Swetha Bhagwat, (FSR Global) gave an introduction to the topic which paved way for the main presentation by Rohit Chandra (IITDelhi, Centre for Policy Research). The brief presentation was followed by interventions from Jesse Burton (University of Cape Town), Johan van den Berg (Africa-EU Energy Partnership) and Jean-Michel Glachant (FSR) who each shared their experiences with the transition towards clean energy sources and the challenges it presents.  

Just transitions are about understanding of the radiative effects of shutting down fossil fuel industries on local economies.

Main Takeaways 

A few takeaways from the debate are summarised below: 

Coal is not just an industry, it is a way of life

The panel echoed that the topic is often easily discussed at high level, yet rather complex when it gets down to people’s lives and jobs. A just transition means making sure that there is a plan for workers”. It must be considered that communities were built on the coal belts and will be now be destroyed. The just transition must be viewed as an economy-wide process given the massive economic multipliers of coal. It is also worth considering that in some cases, the geographical distribution of renewable energy resources does not match the coal regions, as such just transitions will have to zero in on sub-national politics. 

 

Why are just transitions different in the developing world?

It was noted that it is important to highlight differences between just transitions in the developed and developing world. Unlike developed countries with a unified labour class, developing countries are characterized by a highly differentiated and fractured labour force.  The experts observed that developing nations have a large informal workforce which is often excluded from consideration in policy making. Interestingly, the panellists expressed that smaller countries, with limited bargaining power were likely to transition faster. This separates the G20 countries from the rest of the world.  

 

It’s a bit too early for success stories

It may be too early to discuss any successful just transition experiences. While there is evidence of a move-to-opportunity story, we are yet to see the new jobs coming to former coal communities. Although, the unemployment problem is prevalent in various sectors, continuing to push for the old will not necessarily translate into positive change. For this reason, change is inevitable. 

No smooth sailing for net coal exporters

South Africa presents an interesting case as it is the most coal dependent economy in the G20. The big risk for the country as a net coal exporter, is that coal is no longer as competitive. In addition, South Africa has a significant population of artisanal coal miners who contribute to the informal use of coal, that is often not considered in labour force impacts and studies. It was also noted that policy makers cannot afford to suffer a loss of vision and there is need to emphasize the importance of every single job in the regions with high unemployment.  Faced with high unemployment levels many governments are not prepared for the risks.  

 

What is to be done? 

Economic transition planning. Just transitions will require thorough economic transition planning and scenario development. While modern economic modeling techniques will be useful in planning for the future, there is need to complement these efforts with traditional approaches to research ensuring a bottom-up approach 

The experimental approach is key to alleviating poverty. We cannot alleviate poverty without the knowledge of the poor and if the transition is to leave no one behind, there is a need to effectively communicate research on just transitions and exchange ideas from different countries  

Understanding the political economy of the public sector. Due to limited private sector investment in developing countries, state ownership remains widespread in the energy sector. As such an approach that applies purely market fundamentalist and privatisation principles is likely to be ineffective. 

Planning beyond the energy sector will be key to the success of a just transition because decarbonization goes beyond coal and has impacts in other sectors. A low carbon economy will require changes in various other sectors such as car manufacturing and steel sectors, all of which will require a transition. 

How to address structural change is an industrial policy question and it is important to adopt a granular approach in order to leave no one behind. There can be no migration of workers without thorough knowledge of their skill sets. We need to understand how many people depend on informal trade in the coal mining communities 

“If we do not consider gender in this transition, it will not be just! “ 

For more on the debate, check out the event recording.  

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