Where is the Just Transition?

Opencast coal mining will be an industry of the past as the Northeast rejects the last of applications to continue extracting fossil fuel in this way. Neither England nor Scotland will continue opencast mining, while just two plants remain open in Wales. This represents a fall from nine mines ten years ago responsible for producing 3 million tonnes of coal.

The Guardian reports that campaigners are hailing the end of opencast coal mining after The Banks Group chose not to appeal Newcastle City’s rejection of its application this week. However, while there are significant environmental benefits, workers who will find themselves unemployed as the pits close, have been offered little in the way of alternative employment schemes.

Ian Lavery, MP for Wansbeck in Northumberland, tells the Guardian that while climate change needs to be taken extremely seriously the reduction in employment in mining ‘needs to be replaced with something substantial, which hasn’t yet been delivered’.

The lack of a just transition is not limited to the end of fossil fuel in the UK. In the States too there is widespread concern that President Joe Biden’s claim that green jobs are good jobs, may be somewhat spurious.

The New York Times reports that the move away from traditional energy industries which offered skilled employment, most of it unionised, to green energy industries where workers are often ‘non-union construction labourers who earn an hourly wage in the upper teens with modest benefits — even as the projects are backed by some of the largest investment firms in the world’.

This is a picture that we are seeing in a number of sectors. To take one example, extensive windfarm developments often do not utilise domestic manufacturing capacity, meaning that many of the economic benefits of such projects accrue elsewhere. Health and safety on offshore windfarms can be poor, and seafarers involved in supporting such projects are often international crew who do not benefit from local terms and conditions.

Regrettably the relative lack of investor focus on the S of ESG can exacerbate the problem. Managers that have never been active on labour issues may be keen to keep environmental ‘stars’ in their portfolios for both financial and ESG performance reasons, even where there are questionable employment practices. Companies in turn respond to those signals.

On the positive side, there is more attention being paid to the idea of a Just Transition now, and a number of important investor initiatives underway. Our concern remains that to date there remains a significant gap between the rhetoric employed and practice on projects on the ground.

Leave a Reply

Your email address will not be published. Required fields are marked *