Lessons from the Czech Republic
National authorities launch strategic framework for transition
Image by Greenpeace
Coal Mining in the Czech Republic: Past and Present
The Czech Republic has a fairly long tradition of coal mining and processing, dating back to the mid-19th century. While consumption of coal has fallen since its peak in the 1980s, it still plays a major part in the Czech energy mix up to today (51% in 2016).
Black (bituminous) coal is found in the eastern part of the country, in the Moravskoslezský region. There is currently an estimate of 42 million tons of extractable reserves left. Due to the falling prices of black coal worldwide, mining in this region has become economically unprofitable and has been in steady decline for the past years, falling from 13 million tons per year in 2005 to 7 million tons per year in 2015. The mine-operating company has since gone bankrupt and it is expected that all the black coal mines will be closed down in the upcoming years.
Brown coal (lignite) is found in the north-western part of the country, in the Ústecký and Karlovarský regions. Brown coal accounts for around 63% of all coal reserves in the Czech Republic. In absolute numbers, brown coal mining in the Czech Republic is still going strong, however, in relative terms, it has fallen significantly: from 43 million tons in 2011 to 35 million tons in 2016. This is mostly due to the increase of cheap coal imports from abroad and the mining limits imposed on certain quarries.
In 1991, the Czech government introduced territorial mining limits on brown coal mines, preventing the existing surface mines from expanding their territories and infringing upon inhabited areas. However, in 2015, the government amended these limits to allow for more mining in some of the quarries. Environmental organisations, as well as locals concerned with the health effects of the decision, have since been protesting against the breaching of the 1991 limits.
The coal mining regions of the Czech Republic are some of the most underdeveloped ones in the country. Their levels of GDP and disposable income are below the national average, their unemployment rates are among the highest and their quality of air among the lowest. The fact that most of the employment and production is concentrated in the hands of a few large mining companies does not alleviate the situation.
The Strategic Framework is thus aimed at resurrecting the afflicted regions and providing incentives for further development.
Evolution and Structure of the Strategic Framework
The initiative for the creation of the Strategic Framework came from the three concerned regions themselves. They asked the government for a financial injection in order to restart their economies. As a result, the position of Government Plenipotentiary was established to develop a common strategy for economic and social restructuring. The Ministry for Regional Development conducted the initial input analysis and identified the largest structural problems and opportunities for improvement in the given regions. A general Strategic Framework was then developed, which forms the basis for the further Action Plans proposing concrete measures to deal with the structural problems of the coal mining regions.
The Government Plenipotentiary is responsible for the development of the Action Plans as well as the evaluation of the implemented measures. He manages the work of the executive team that coordinates the activities among the involved regions as well as the work of joint working groups that focus on particular pillars of the framework.
The Government Plenipotentiary together with the Regional Supervisory Board appoints leaders of the working groups, who subsequently name their members. Those represent municipalities, regional offices, the Office of Labour, the Agency for Social Inclusion, the business sector and NGOs.
The executive team coordinates the preparation of background materials, collects inputs from stakeholders and the public, investigates absorbtion capacities of the regions, communicates proposals from the regions to the ministries and working groups and through this also supervises the implementation of the outlined measures by ministries. Working groups evaluate the implementation of approved measures and suggest new ones to the Regional Supervisory Board.
The Regional Supervisory Board is formed by representatives of the region, the regional tripartite, the Union of Towns and Municipalities (and through that appointed towns and municipalities), university representatives, businesses and trade unions and other organizations such as the Association of NGOs. The Regional Supervisory Board approves draft Action Plans that are further developed by ministries. To finalise the process, Action Plans are being discussed at a Conference for Restructuring that happens at least once a year. Finally, the Action Plan is approved by the government.
Pillars of the Strategic Framework
The Strategic Framework entails seven pillars, which are common for all the involved regions.
With the pillar “Entrepreneurship and Innovation” the government aims to support growing business that is going to be able to face the changes on global markets.
The goal of the second pillar is to attract more direct foreign investments with higher added value.
In the third pillar the government wants the economy to benefit more from research and development.
The pillar “Human resources” aims to increase the number of inhabitants competent to work in industry, services and public service.
Within the pillar “Environment” the government wants to broaden the revitalised and regenerated areas to provide better conditions for entrepreneurship and healthier life of the locals.
The sixth pillar aims to remove barriers to development caused by social exclusion and instability.
With the last pillar the government wants to improve the infrastructure and the quality of public services.
The Strategic Framework was approved on January 9, 2017, whereas the accompanying Action Plan was approved on July 10 the same year.
The plan allocates 42 bn CZK (1.5 bn EUR) over three years to the development activities in the regions. Of that, 8.4 bn CZK come from European structural and investment funds, 2.4 bn come from privatisation, 18.1 bn represent a national budget increase and 13 bn represent already allocated money in the ministry budgets. It is expected that the European Commission will establish a fund for compensation of former mining regions and the Czech Republic is planning to also use the resources of this fund to co-finance the restructuring.
The Action Plan contains 65 measures divided into seven thematic priorities according to the pillars listed in the Strategic Framework. There is a clear imbalance in the allocated money for particular priorities. Although the budget for the pillar “Environment” makes up one third of the whole budget allocated for the Action Plan, the amount of additional money on top of the existing budget is small. This pillar contains almost exclusively measures to revitalise and regenerate the land after mining, which the government had promised to do anyway. The Action Plan, however, helps to emphasize this need and accelerates the whole process.
We can see an imbalance also in the content of the Action Plan. Some topics, especially those that require more deliberate and complex solutions, such as tackling air pollution, are missing completely in the original Action Plan, and should therefore be added in the upcoming novelisations. On the other hand, we have to bear in mind that the Action Plan has to be limited in size and scope. Several measures focus on mapping and analysing the situation in regions and based on that the future Action Plans should take more concrete steps.
Every year, the Action Plan shall be renewed and its measures updated for the upcoming year. In the summer of 2017, the executive team began to collect ideas from stakeholders, which will serve as inputs for the working groups. The Regional Supervisory Board is supposed to meet in November 2017. The second Action Plan is to be approved by May 31, 2018.
NGO Perspective: Positive and Negative Aspects
From an environmental NGO perspective, the creation of the Strategic Framework and the subsequent Action Plans is overall a step in the right direction. It is necessary to prepare the regions for the phase out of coal, which will inevitably happen due to the combination of declining coal prices, increasing competitiveness of renewables and increasing pressures on reducing emissions of greenhouse gases due to advancing climate change.
However, there are some significant shortcomings in the documents. First of all, the government never specifically mentions an explicit deadline for the coal phase out. Thus, the incentives to restructure the regional economy and make it less coal dependent are not as strong. Secondly, the current Action Plan includes many projects that would have been done anyway, even without the Strategic Framework being in place. Thus, the government misses a unique opportunity to take a step further.
The document also lacks more progressive and innovative ideas, which could truly kick off a new stage for the regions. Bolder measures taken now would benefit the regions in the future.
Lack of public participation in the process of formulation of the Action Plans is also a drawback. There is an online tool available for citizens to submit their ideas, however, the results of this effort are not made public and nobody knows how many ideas were submitted and whether they have been considered. There was no public hearing or a structured public participation planning process.
Furthermore, the engagement of the NGO sector is not functioning well, as the only NGO that has been invited to take part in the drafting process is the Association of NGOs, which contrary to its name does not include many NGO and therefore does not represent the NGO voice in the Czech Republic adequately. This is particularly the case with the representation of environmental NGOs.
As mentioned above, some important topics are missing entirely from the first Action Plan, such as air pollution. In order to make the Action Plans more efficient, this topic should be included in the newer versions.
Finally, the Action Plan does not provide a comprehensive scheme for supporting renewable energy sources, which could ultimately replace coal, both in energy production and employment. It includes potential analyses of several sources but it lacks concrete steps for their implementation.
These shortcomings are significant and the future Action Plans should address them. Nevertheless, the fact that such a strategic document exists in one of the most coal-reliant countries in Europe shows that it is possible to garner the necessary political support for phasing out coal and that it is more easily done when wrapped under the veil of regional development and restructuring.