Ending Coal: From Diplomacy to Implementation
Diplomatically, coal power is on the wrong side of history. Spearheaded by Canada, the UK and the Marshall Islands, the Powering Past Coal Alliance has just been launched at the UN climate talks in Bonn. New members are joining the twenty-five founding governments by the hour—just check the tally on the Alliance’s webpage.
The alliance is not just open to national and sub-national governments, but also businesses and other organizations. What unites them all is the ambition “to accelerate clean growth and climate protection through the phase-out of… existing traditional coal power” and placing “a moratorium on any new traditional coal power stations.”
Technically though, the world has a new task at hand: implementing coal phase-outs in “a sustainable and economically inclusive way, while providing appropriate support for workers and communities”. This is the necessity of a “just transition”, stressed as the imperative in the Paris Agreement on climate in 2015.
IISD as well as other think tanks have scrutinized coal phase-outs that were implemented in the past—from Ontario in Canada to Beijing and Shanxi in China; and from South Wales in the United Kingdom to Delhi in India. All these are very difficult experiences, and while we cannot use any of the past scenarios as a blueprint for the future, we can learn from each of them. These lessons include several simple principles that will help countries, regions and cities that have committed to phasing out coal:
- Develop a plan that analyzes the potential impacts of coal industry decline and evaluates possible policies to address economic, environmental and social impacts.
- Identify options for economic diversification, social safety nets and new employment that can support coal workers and their families in the transition.
- Establish a dedicated fund to support a just transition and economic diversification. Use savings from fossil fuel subsidy reform, as well as environmental taxes and charges, to fund the transition.
- Engage with all stakeholders. An open dialogue with labour groups, communities, industry associations and other interested parties will help to identify challenges and issues with reform, avoiding more serious consequences and helping diffuse opposition to phase out.
There is also a range of legal, social and financial issues to consider, including: pathway dependency for workers and regions; limited options for diversification and retraining; forestalling asset stranding; anticipating and managing investors’ claims for compensations for stranded assets; preventing electricity price increases; institutional inertia; and many more.
There is little doubt that the Powering Past Coal Alliance will outperform its self-imposed target of having more than fifty members by the next round of UN climate talks in December 2018. But by addressing the issues of implementation and mobilizing peer learning between its members, the Alliance will be able to appeal to those who today were conspicuous by their absence in the room—countries with significant coal production and consumption, such as Germany, Poland (host of the next UNFCCC conference) and many Asian nations—and also businesses and organizations beyond the “usual suspects”. For one, getting a signature from a labour organization such the Canadian Labour Congress on the Power Past Coal declaration would a litmus test for the international community’s ability to truly bring together a coalition that can not just tackle the world’s coal problem—but do so in a socially sustainable way.