Just Transition is possible! The case of Ruhr (Germany)
Is there a socially acceptable phasing out process for coal mining? What are the impacts on the employees and is there such a thing as a “socially responsible staff adjustment”? What were the challenges for governments, trade unions, the private sector and civil society?
These were just a few of the questions that we were eventually answered after the study trip organized by WWF Germany (19-22/03/2018) in the ex coal-dependent area of Ruhr in Germany. This study trip was part of the project entitled “Just Transition in Southeastern Europe,” which is supported by the European Climate Initiative of the German Ministry of Environment and focuses on three countries in Southeastern Europe, namely Bulgaria, Poland and Greece.
Relevant stakeholders including local policy-makers, trade unions, representatives of civil society, and journalists from Bulgaria, Germany, Greece, and Poland participated in the study trip, exchanging best practices, knowledge and concerns on the status of Just Transition in their regions for three days in a row. The Rhine-Westphalia area was presented as a best practice case, as by the end of 2018 its last coal mine will seize its operation.
Coal phase-out in the Ruhr did not happen by accident. On the contrary, it is the end of a long-term planning process that took decades to implement and received huge support from the national and regional budgets.
It is worth mentioning that in the 1950s more than 500,000 people were employed in the coal mine industry in the whole region. However, after the 1957/1958 coal/steel crisis and the 1968 consolidation of the mining industries in the RAG, the number of employees plummeted to 180,000. In the mid 80s this number further decreased from 80,000 to less than 8,000 last year. At the same time, and according to the trade unions of miners, during the 1960-2015 period the coal industry received €126.6 billion in subsidies, once again reminding us of the constant and unconditional support the federal government has provided to the coal industry.
2007 was a landmark year, as the state decided to phase out coal in a socially acceptable way by the end of 2018. In order to ensure that none of the approximately 37,000 coal miners would be left behind in this 11-year process, €17 billion were spent in establishing early pension schemes for the oldest, career change opportunities for the younger employees and in covering the so-called “eternal” costs, which amount to approximately €220 million per year. These mainly cover expenses to pump water off the ground in order to keep the cities above at a constant level.
Phasing out coal wasn’t an easy decision for the region of Rhine-Westphalia even though coal mining had stopped making economic sense long before – for many years importing coal was cheaper than extracting coal from local mines – as over the years, German miners had developed a strong attachment to the “coal culture”, also based on the belief that their part in reconstructing Germany after the Second World War was crucial. Major political events such as the reunification of Germany and energy crises in the 1970s and 1980s also played their role in the decision to phase out coal. Transforming a large sector of the economy like the coal industry was a Herculean task that took more than three decades, vast amounts of state aid and long-term negotiations among the different stakeholders.
The negotiation process was the most challenging and difficult part of the transition. Stakeholder engagement means that all key players are sitting at the same table taking decisions about their common future. In other words stakeholder engagement lays the foundation for a more secure and inclusive future that leaves no one behind.
Despite the challenges, Germany did it. Is there any chance that this mindset could find application to other countries in the process of phasing out coal/lignite? Are there any lessons learned from the Ruhr region that can be transferred across scales and coal/lignite-dependent regions in Southeastern Europe?
Greece, Bulgaria and Poland cannot be compared to Germany in terms of resources, budget, the flexibility of the education system and to some extent the culture of social dialogue between the state and the trade unions.
However, there are some lessons from the German experience that could apply to other similar cases.
Lesson one: strategic planning. Change cannot happen from one day to the next. Certainly not between elections cycles that last less than 2.5 years as is very common in Balkan countries.
Lesson two: stakeholder engagement. Unilateral decisions mean no decisions. All stakeholders should sit around the same table, discuss, suggest solutions, confront each other but in the end, achieve consensus.
Lesson three: resources. The transition process requires funds. Countries of Southeastern Europe rely on restricted budgets due to the economic crisis, and therefore they are not able to fund large early retirement schemes or the retraining of large numbers of employees for long periods of time. The European Union must step in to cover the extra funding needed for such actions. The establishment of a Just Transition Fund is a sine qua non prerequisite for a more equitable allocation of resources in the countries with poor coal-dependent regions in transition.
Lesson four: sustainability. Coal/lignite phaseout means more than energy transition. It also involves planning of new sustainable economic activities with a focus on renewable technologies, research and innovation, startups’ ecosystems, ecotourism and sustainable agriculture production. In Duisburg this resulted in the transformation of its previous industrial port (Innenhafen), the biggest inland port of Europe, to an area that hosts commercial and recreational activities and cutting-edge technology firms. In Essen, the Zollverein Coal Mine became part of the UNESCO World Heritage as part of the transition process. Since 2001 it hosts cultural and other outdoor activities with more than one million visitors annually.
There is no “one size fits all” strategy for the Just Transition to the post-coal era. Every country and every coal-dependent region has its strengths and weaknesses, but we can all learn from each other and realize that there are alternative future pathways which lead to sustainable and equitable growth. The successful Just Transition in the Ruhr region in Germany has demonstrated to everyone that coal phaseout is a window of opportunity for change into a brighter future.