A ‘just transition’ just about the only transition worth having

An international group of researchers, including The Australian National University’s (ANU) Prof Frank Jotzo, has published a study today in the journal Nature Climate Science showing the importance of a ‘just transition’ as coal is replaced by renewable energy. 

By comparing a range of economies the paper shows that the most effective phasing out of coal requires involving those impacted by the transition in the process. This may mean compensating affected groups and offsetting vested interests delaying the inevitable. 

The study was led by researchers at the Mercator Institute in Berlin but included academics and researchers from the UK, India, the U.S., and indeed Australia. “In Australia,” said Prof Jotzo, “coal use is invariably on the way out, as renewable energy is now the cheaper way of producing electricity from new plants, and Australia’s coal power plant fleet is relatively old. Coal is also being phased down quite rapidly in much of Europe and North America.” 

Coal to renewables, let’s look at NSW

Jotzo made mention of the Hazelwood closure in 2017 and the difficulties presented by the oncoming closure of the Liddell coal-fired power plant in 2023-2024. Part of the anxious concern about the Liddell closure is the fact that New South Wales is still heavily reliant on fossil fuels. The most recent Australian Energy Update, released in September 2019 found 75% of the state’s electricity is still coal-generated.

Indeed, recent research from Cornwall Insight Australia suggests that the transition to renewable energies in New South Wales needs to pick up the pace quick-smart if it is going to cover the soon-to-be-revealed gap made by retiring coal generators. 

New Cornwall Insight Australia’s research has compared renewable generation in NSW over the last four years to that of coal generators scheduled to exit the market by 2035. The results are stark: renewables contributed an average under 10% of total generation in NSW, while over the same period said coal generators averaged approximately 77%. 

Lumi Adisa, Lead Consultant – Market Analysis and Business Development at Cornwall Insight Australia, said that these results are particularly troubling because the gap alternative technologies sill need to bridge over the next 10-15 years far exceeds any growth capabilities seen in the renewable sector so far. 

However, the recent rousing success of NSW REZ proposals is a great source of hope for a state one pilloried as the laggard in the nation’s renewable energy transition. 

“The lesson from the experiences of other countries is that closures need to be planned ahead of time,” says Jotzo, “giving time to seed alternative business activity. Success requires looking after the interests of workers, local communities as well as the energy industry, but not forgetting the interests of energy users an taxpayers. 

It seems as though NSW could be turning into just the kind of successful case study these Jotzo wants to see. Indeed, the most recent Clean Energy Outlook – Confidence Index from the Clean Energy Council (CEC) singled out NSW as being particularly attractive to investors thanks to the state government’s clear strategy, particularly its recently amended laws allowing large-scale battery storage systems and its three pending renewable energy zones (REZs). 

However, as Jotzo is sane to note, there is a long way to go. “More coal plant closures will come,” he continued, “and probably sooner than many people think, as power prices have fallen and the competition from renewables is strong. Let’s be prepared for the change.” 

The times they are a-changin’

The impacts of the Covid-19 pandemic are many and various, but perhaps one serendipitous effect is that the nation has had to stop and collect itself, to pause at a time when political polarisation on climate and energy was raging like wildfires throughout the country. 

Key to this polarisation and the ‘just transition’, is not simply the transition to renewables, but the transition of our workforce, a reductive term for our fellows, but practical nevertheless. The changing economy is, for many, especially in regional areas, a daunting prospect. As the American writer James Baldwin once said on a sadly still relevant topic, “Any real change implies the breakup of the world as one has always known it,”. 

Thankfully, the transition to a green economy, perhaps boosted by the necessity of economic stimulus brought on by Covid-19, not only promises to create new jobs in regional Australia, it promises to create more jobs in regional Australia than ever before. 

According to new economic modelling published by Accenture’s AlphaBeta and commissioned by the Climate Council, 76,000 clean jobs could be created nationwide over the next three years in a green economic recovery to the impacts of Covid-19. 

AlphaBeta’s “The Clean Jobs Plan” (Plan) sets out a dozen policy options which would accelerate sustainable job creation for, in the words of AlphaBeta Director, Andrew Charlton, “the people who need them most.” 

The Plan has been released on the back of a personal plea from Clean Energy Council (CEC) Chief Executive Kane Thornton to Canberra to allow the renewable energy industry to lead the Covid-19 economic recovery, and think-tank Beyond Zero Emissions’ (BZE) publication of its Million Jobs Report, in which a green scaffolded economic recovery which posits 1.8 million new jobs can be created through renewables and low emissions projects over the next five years. This latter Report already has strong support, including Mike Cannon-Brookes, Ross Garnaut, Malcolm Turnbull, Kevin McCann, and Christiana Figueres. 

Another ANU researcher, Dr Bec Colvin, has been looking into the future of regional economies in coal areas as they transition away from coal, such as the Hunter Valley. “These issues can be very contentious and even divisive,” says Colvin. “Everyday people need to be given the space to grapple with the complex social challenges of planning for a prosperous, low-emissions future.”

Colvin suggests that governments and industry should invest in “genuinely participatory processes to make possible conversations across political and social divides, especially in regions that will experience the changes.” For Colvin, overcoming the ‘us and them’ mentality is key to a ‘just transition’.