Lessons learned from the restructuring of Poland’s coal-mining industry, written by Professor Wojciech Suwala of the Mineral and Energy Economy Research Institute, analyses how the reform of subsidies to coal mining was conducted as Poland moved from a centrally planned to a market economy.

The report describes in detail the various stages in the reform process and the annual spending on each form of compensatory measure: in total around US$ 9.3 billion between 1990 and 2006, the most substantial spending having been dedicated to social programs for workers.

A key lesson drawn in the study is that half-hearted plans do not work. Progress was only achieved once the reform process had a clear road map for restructuring, combined with significant funding and strong political will. With an end goal of privatization, generous social programs helped miners leave the industry and reduced over-employment, securing the endorsement of the Solidarity trade union. State intervention to finance the closing of mines and site remediation activities also helped prevent long drawn out, ineffective and expensive interventions by the private sector. Today, coal companies have nearly achieved long-term viability and the process of privatization has commenced.

The report is the first in a series of case studies on fossil-fuel subsidy reform commissioned by the Global Subsidies Initiative. Up-coming reports will focus on experiences in Brazil, France, Ghana, India, Indonesia, and Senegal. The report can be downloaded from the GSI’s website at: http://www.globalsubsidies.org/en/research/case-study-restructuring-polands-coal-mining-industry