To end King Coal's reign, must his most loyal subjects get paid?
Compensating phase-out losers for a just transition

Date:
July 28, 2020
Source:
University of Sussex
Summary:
Governments should be prepared to pay billions of pounds to
operators of coal-fired power plants in agreements to shut down
their plants early, a new article recommends.



FULL STORY ==========================================================================
The huge task of phasing out coal requires a detailed roadmap to sequence
coal plant retirement with a range of policy instruments and support for
key stakeholders which will expand current notions of a just transition, leading energy experts have said.


========================================================================== Governments should be prepared to pay billions of pounds to operators of
coal- fired power plants in agreements to shut down their plants early,
a new paper published in Nature Climate Change today recommends.

The paper recommends extensive compensation should also be considered for regional economies hardest hit by the loss of coal producers and energy- intensive industries that will have to absorb higher energy prices in
order to ensure a just transition to greener energy production.

To prevent regions such as the coal belt in the United States or dependent communities in Germany and Poland being abandoned after coal, the study recommends governments should foot the bill for extensive improvements to localised transport and communication infrastructure, higher education provision, new business opportunities and the relocation of government services.

And to shield the poor from electricity price rises resulting from
replacing coal plants with more costly alternative power generation, governments and regulators should consider Just Transition measures
including adjusting electricity tariffs, investing in community benefit
funds or subsidizing energy efficiency through weatherization and
retrofits programmes targeted at the most in need or vulnerable.

Benjamin K Sovacool, Professor of Energy Policy in the Science Policy
Research Unit (SPRU) at the University of Sussex Business School, said:
"Paying billions to some of the world's biggest polluters to avert
a climate catastrophe they helped to create may sound unpalatable to
some environmentalists "But compensating the biggest losers from coal phase-out, alongside improving equity and accountability processes,
will go a long way towards achieving all the other aspects of a just
energy transition including legitimacy, desirability, speed of transition
and financing.



========================================================================== "Simply put: a just transition requires more than just safeguarding jobs,
and involves protecting the resilience of entire communities across both
high- carbon as well as low-carbon energy pathways." In the new paper published today, 13 energy experts led by Michael Jakob and Jan Christoph Steckel from the Mercator Research Institute on Global Commons and Climate Change (MCC) in Berlin outline that while the power sector must stop using
coal without carbon capture-and-storage within 30 years, coal combustion currently accounts for 40% of global CO2 emissions from energy and coal
use with growing demand in China, India and other Asian countries.

To quicken the rate of coal phase-out to meet the Paris Agreement
timelines, the study authors recommend governments remove all coal
subsidies immediately to create a level playing field for clean energy
sources.

Dr Steckel said: "In my view, the novel twist we give to the debate is
that we need to think of "who's losing" beyond a "particular group,"
"get them paid," and we also propose how this could be financed via a
tax on carbon." And policymakers and legislators should also consider
imposing additional carbon costs on coal plants to accelerate phase-out
and raise funds in support of affected workers, communities and consumers,
the academics recommend.



==========================================================================
Dr Jakob, lead author of the study, said: "Coal phase-out can only
succeed if it takes into account social objectives and priorities. It
is crucial that the modalities of coal phase-out are seen as fair and
that the process corresponds to political realities. Policymakers need
to understand in more detail who will be affected by a transition away
from coal, how these societal groups can be effectively compensated and
how powerful vested interests can be counterbalanced." Coal phase-out
is also likely to affect the competitiveness of other industries such as
steel, aluminium, chemicals, and other important components of industrial strategy, the study warns.

To counter the risk of carbon leakage through the migration of
energy-intensive industries to regions with laxer climate measures, policymakers should consider a range of measures including carbon
contracts for difference or mechanisms of technology transfer .

Co-author Professor Frank Jotzo, from the Australian National University's Crawford School of Public Policy and Director of the Centre for Climate Economics and Policy at ANU, said: "What is needed in the transition away
from coal is a clear way forward for regional economies and communities, creating prospects for new jobs and business opportunities, while limiting adverse impacts on consumers and energy-intensive industries."

========================================================================== Story Source: Materials provided by University_of_Sussex. Original
written by Neil Vowles.

Note: Content may be edited for style and length.


========================================================================== Journal Reference:
1. Michael Jakob, Jan Christoph Steckel, Frank Jotzo, Benjamin
K. Sovacool,
Laura Cornelsen, Rohit Chandra, Ottmar Edenhofer, Chris
Holden, Andreas Lo"schel, Ted Nace, Nick Robins, Jens Suedekum,
Johannes Urpelainen. The future of coal in a carbon-constrained
climate. Nature Climate Change, 2020; DOI: 10.1038/s41558-020-0866-1 ==========================================================================

Link to news story: https://www.sciencedaily.com/releases/2020/07/200728113526.htm

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