A just transition? Lusatia, lignite and lessons learned

From #BuildBackBetter to Net Zero to Black Lives Matter – 2020 has been characterised by calls for a better and more sustainable future. Transition narratives have dominated much of the public conversation, with Covid-19 shifting our thinking on what a good, dignified, decent life is.

Calls for transitions also uncover cultural, social, and political decision-making patterns and biases – with our political imagination often hampered by what can be known and the inherent biases in our political economies. They are ‘make or break it’ moments – points in time where societies, more than ever, are dependent on clear, strategic, and compassionate leadership with a vision for the future.

This blog is part of a series documenting the findings from a number of events hosted in partnership between IPPR and Agulhas, for IPPR’s Environmental Justice Commission. The events explored how we can better design public policy to support a rapid and fair transition to net zero and the restoration of nature. The events sought to explore the lessons and insights from previous transitions in different countries, sectors and industries, sharing what worked and what did not in their stories of transition.

Lusatia is no stranger to industrial change. In the late 1950s, German coal mining was in a crisis. It had become cheaper to import coal rather than buy it domestically and nuclear power plants were becoming more common. In an effort to keep mines up and running, the government paid the difference for the more expensive domestic coal. But even with this support, it was a case of managing a decline rather than a transition. Over the next 60 years, the number of people working in coal mining fell from just over 600,000 employees to around 15,000 jobs.

Now the Lusatia region faces another crisis. As the climate crisis intensifies, coal phaseouts have become an essential means of reducing national greenhouse gas emissions, posing a new threat to this region. The reaction to plans for a new coal phaseout were initially predictably and understandably hostile. In 2015, workers and regional governments who had invested in coal protested the federal government draft plans to close lignite plants.

Reaching for consensus

To try and reach consensus, there has recently been much more policy focus on a ‘just transition’ for Lusatia. In this context, this has meant having a debate around what a socially acceptable phase-out of coal looks like. They have considered what policies should be in place to supporting workers financially, with advice and helping them to find new, high quality jobs, whether in new low carbon industries or otherwise.

To this end, in 2018 the federal government launched the Coal Commission, comprising of federal government, regional government officials, unions and industry representatives to try and reach a compromise that balanced decarbonisation priorities with support for workers in the region. The result has been a commitment to phasing out lignite by 2038 and a massive €40 billion Just Transition Fund committed to the Lusatia region.

Certainly, such a process – albeit one that reacted to protest rather than pre-empted it – demonstrates the power of engagement and the capacity governments have to support workers if they choose, even before many were all but forced to do so by the Covid-19 pandemic.

Winner and losers

Yet questions remain over how just this transition may actually be. For starters, it is not clear if a coal phaseout by 2038 is compatible with national decarbonisation plans to reduce greenhouse gas emissions by 55 per cent by 2030 and 95 per cent by 2050. A slower coal phaseout implies that deeper reductions in emissions will be needed in other sectors like heating and transport. If the UK is anything to go by, reducing emissions in anything but the power sector will be much more difficult. More fundamentally, while a just transition most commonly refers to support for current workers, any discussions of justice and fairness must also consider the rights and livelihoods of future generations and future workers.

Secondly, it is not yet clear how the €40 billion will be distributed and what specific transitional activities it will support. In Cottbus for example, the second largest city in the Brandenburg province and a key employer in the Lusatia region, there are plans to redevelop an old open cast mine into a scenic lake and new urban city centre. However, it is unclear how the workers from this mine and people from the wider community may be involved in these plans. Economic development of a region may increase employment opportunities in general, but it does not specifically support those who may lose out.

Third, while the money committed to a Just Transition Fund is substantial, many municipal authorities in Germany don't have the capacity to apply for the funds or procure projects with them – a similar problem that many councils up and down the UK face.

Finally, German trade unions representing coal workers have a strong voice, but workers in new low-carbon industries do not. Most strikingly, in the last few years, more jobs – as many as 40,000 at the end of 2019 – have been lost in the wind industry than are due to be protected in coal. Arguably, this is due to limited access these workers have to trade unions. As IPPR has previously written about, similar fears about access exist in the UK too.

Lessons for the UK

Despite the limitations of just transition efforts in Germany, there are still key lessons the UK could learn, not just about the policy itself, but the institutional and structural conditions that have helped to produce it. Such lessons are essential to ensure that the UK does not repeat the mistakes of its own history of poorly managed industrial change.

The first thing to note is how the regional governments in Germany have far more powers to act than their UK counterparts. States in Germany have a lot more devolved power over areas like public welfare, regional planning and to some extent income tax. As a result they are more directly accountable for the local impacts of decarbonisation, thereby increasing the imperative to convene and listen to local organisers and stakeholders when developing transition plans and decide on the future industries that will define their regions.

Second, trade unions are treated as social partners in the policymaking cycle, which gives them a significant voice in transition arrangements. It is no coincidence that there are far more collective bargaining agreements – an effective means of securing decent pay and job quality – in Germany than the UK. The result is that these unions have been a key part of Germany’s Coal Commission.

Third, in no small part due to the influence of unions, the €40 billion fund is a clear demonstration that the federal government is taking a transition seriously by giving it financial heft. While the specific activities and types of support for workers are yet to be finalised, it is a clear signal that the government views the climate crisis as a moment to invest in new opportunities too. At a time when Covid-19 has meant that green investment is now both very popular and essential to the future path our economy takes as it recovers, support on this scale has become ever more important.

In the UK, we are already phasing out coal such that, the UK now regularly goes weeks without using any coal power whatsoever. However, one of the reasons why the UK is arguably "further along" in decarbonising its power sector is because its mining industry was already subjected to an unjust transition in the 80s. Indeed, as coal power stations are now being phased out and the UK’s attention will increasingly turn to the oil and gas sector, there is a real risk that we could be repeating these mistakes.

As IPPR has previously argued, to avoid such an unjust transition, it is vital that the UK focuses on how to engage and empower local communities and ensure they have a voice in the decision making process. As Covid-19 is forcing us to change the way we live and think about what constitutes a good life, conversations and resulting policy about our common future are ever more pertinent. In that regard, the lessons of Lusatia can provide us with some useful instructions.

Josh Emden is a research fellow in the energy, climate, housing and infrastructure team at IPPR. IPPR and Agulhas are grateful for the support of the TUC and FES in partnering on the events in this series as part of the work of IPPR’s Environmental Justice Commission.