Taking the Paris Agreement seriously, implies a coal phase-out for all industrialized countries by 2030. In our paper in Climate Policy we derive lessons for these upcoming coal phase-outs from examining the phase-out of hard coal production in the two largest mining regions of Germany, the Ruhr area and the Saarland. The analysis starts with the first coal crisis in Germany in the year 1957, at a time when the hard coal industry provided 750,000 direct jobs, and ends with the phase-out of domestic hard coal production in 2018.
Since the 1960s, the cost of domestic hard coal exceeded the price of imported coal. Nevertheless, policymakers prevented, or at least slowed down, the decline of domestic hard coal production for decades through subsidies. Key barriers for change were fears about negative impacts for coal workers and entire mining regions. The mistaken belief in a renaissance of (environmentally harmful) domestic hard coal production, however, actually prevented necessary changes: Existing networks between politicians, unions and mining companies resulted in lock-in effects and made it difficult for new companies and sectors to emerge; especially within the Ruhr area. The Saarland more actively encouraged a transition away from coal and profited from the settlement of Ford Motor Company and several of its suppliers. On the basis of our analysis, and in order to prevent the repetition of previous mistakes and emphasize useful policies worth repeating, we make the following main recommendations for just and timely transitions in coal regions:
- Implement energy and climate policies to reduce production and consumption of coal as well as social and structural policies to alleviate negative impacts on affected regions and employees simultaneously.
- Different institutions and levels of government need to manage the process together, while actively engaging broad stakeholder participation.
- Importantly, planning of the process needs to include long-term effects, beyond border effects and advice apart from the dominant companies and institutions related to the coal business.
- It is crucial for successful transition policies to address unemployment, the economy, and the energy system. However, too often neglected are measures to improve the general attractiveness to live in a certain area, such as access to recreation areas, better air quality, infrastructure, universities, and other so called soft location factors.
Coal’s dominance in Germany, however, has not ended with the end of hard coal production. Large capacities of coal-fired power plants and lignite mining remain, and Germany’s government is still far behind in implementing the recommendations from its ‘coal commission’. Apart from the end of hard coal production, further support for renewables and an accelerated decline of remaining coal use are, therefore, necessary missing steps for a just and timely transition in Germany – and elsewhere.
Elon Musk’s announcement in November 2019 to choose Brandenburg, Germany’s most lignite dependent federal state, as location for Tesla’s first European Gigafactory to build batteries and electric cars might indicate shifting tides. The construction of one factory, however, will not serve as a ‘silver bullet’, as has been illustrated by previous experiences of the hard coal mining regions. Instead, the need for establishing an entire network of suppliers, universities and research centers will be essential to result in more resilient clusters to strengthen local industries – and creating an attractive region with high living quality will be needed for people to settle and stay in the area to enable a beginning for a ‘Green New Deal’.
Read the full paper.
Dr Pao-Yu Oei currently works at the Technische Universität Berlin and is head of a group on the transition from fossil fuels towards renewable energy sources
Hanna Brauers is a research associate and doctoral student at the Technical University of Berlin (TU Berlin) and a guest researcher at the German Institute for Economic Research (DIW Berlin).
Philipp Herpich is a research associate at TU Berlin and Coal Exit.