Decarbonizing energy systems is one of the most challenging and urgent issues facing humanity. As a highly developed industrial nation, Germany bears large responsibility to the global community to rapidly transition to net zero emissions. The Energiewende is Germany’s ambitious path to achieve “secure, sustainable, and affordable energy” and calls for a double transition away from nuclear power and coal. This will have dramatic social and economic impacts particularly for workers and communities in energy-producing regions. As the first nation to attempt such a transition, Germany’s energy transition will set a precedent for the world.
To satisfy climate targets and effectively address socio-economic concerns, Germany must make the current energy transition a just transition. Doing this requires learning from the past and by utilizing available resources, proactively and inclusively manage its energy transition in a way that promotes social justice and economic diversification in affected regions. By comparing approaches with Canada, countries like Germany can learn from this successful North American model about how to achieve a just energy transition.
What is a just transition?
The term “just transition” is an evolving and multifaceted concept. It was first discussed within the labor union movement and focused on providing protections for workers who lost industry jobs due to strengthening environmental regulations. With its inclusion in the Paris Agreement, the concept gained a stronger association with the need to protect jobs and respond to the needs of affected communities within movements toward a clean energy economy.
Overall, justice in transition describes a focus on addressing social inequities within policies to manage transitions. Several describe justice as primarily distributive, relating to the fair allocation of costs and benefits among affected groups, and procedural, relating to inclusion in decision-making processes. This paper evaluates justice in energy transitions based on achieving climate goals while addressing procedural and distributional justice.
A Just Transition in Germany
With the goal to become climate neutral, eliminating coal from energy supplies is the main focus of Germany’s energy transition. Coal played an important part in Germany’s history as it was central to national recovery after WWII. The industry provided workers with well-paying jobs and coal producing regions with a sense of pride in powering national growth and well-being. The decline of coal is associated with a loss of recognition, social status, and sense of abandonment, in addition to economic loss.
Germany’s coal transition in the Ruhr Valley began in the late 1960s and ended in 2018. The transition is largely viewed as a success due to massive public investments and an inclusive approach that allowed for social dialogue, interaction between multiple levels of government, and economic diversification. These were key to easing lock-in, whereby businesses and actors aimed to revive the uneconomic coal industry rather than move toward economic alternatives.
Unlike the Ruhr Valley transition, the current transition to renewable energies enjoys wider public support. The Energiewende has been reviewed consistently favorably, and the German government has committed to phasing out coal mining, despite that these changes will involve significant financial costs. The main challenge to ensuring justice in the current transition is properly allocating financial resources to ensure that all affected stakeholders are fairly compensated for losses and supported in transitioning.
In 2018, the national government established the so-called ‘Coal’ Commission. The Commission was composed of representatives from various stakeholder groups and tasked with developing a coal phase-out plan. Their plan set the phase-out target to 2038 and included billions in compensation for coal companies, workers, and affected regions. While non-binding, their comprehensive plan was viewed as a societal consensus to be enacted in law. Nonetheless, the plan has been subject to widespread criticism including that the coal exit is not early enough, that it is too generous to coal companies, and that the Commission lacked in efforts to recognize and address local concerns.
The Commission’s process involved gathering input from thousands of past and current coal workers. However, representatives were selected from stakeholder groups with existing political relationships rather than being more widely inclusive. These criticisms suggest a lack of procedural and distributional justice in the Commission’s planning processes.
To achieve a just transition, Germany must ensure that compensation is fairly distributed to workers and affected regions. Significant funding is being given to coal companies which have profited for decades. However, workers and mining regions are more socially and economically vulnerable, and should be the primary recipients of support. Moreover, workers and diverse stakeholders should be more meaningfully included in decision-making processes. This can be done in numerous ways, but should promote open engagement with diverse demographic groups and active involvement in decision processes.
In addition, the German government can appeal to soft powers by funding cultural projects that recognize the history of coal regions. This could increase social acceptance and promote economic diversification, as would providing support for transportation infrastructure, higher education, and new or emerging industries in transition regions. Rather than supporting and subsidizing coal companies, funding could be diverted to these social investments. Providing funding to promote diverse growth in coal regions is key to ensuring community well-being and an overall just transition.
Comparing across countries
Canada provides an interesting point of comparison to the German energy transition. Both countries are recognized globally as leaders in renewable energies and have committed to climate neutrality, yet continue to subsidize coal production and have been criticized for insufficient progress. Coal plays a much stronger role in Germany while Canada’s economy is more dependent on oil and gas. Politically, Germany’s corporatist system is characterized by requiring cooperation to inform major decisions, while Canada’s brokerage system provides greater autonomy to federal states and makes negotiation voluntary while states have veto powers. Canada'S government also has a tradition of promoting social justice. These political dynamics produce differing approaches to the just transition concept.
The Canadian government promised a just transition for oil and gas workers. Similar to Germany’s Coal Commission, Canada established a Task Force on Just Transition to aid its national transition process. However, energy transitions are viewed as a multilayered concept in Canada, with climate issues decided at the national level and social and economic transitions addressed locally. Thus, provinces have taken the lead on transitioning away from coal while the Task Force was mandated to engage with stakeholders and identify possible solutions to support workers and communities. This is much narrower than the Coal Commission’s mandate to propose a coal phaseout plan for the country and address justice concerns.
The Task Force has been subject to much less criticism, and is viewed positively for engaging a broad variety of stakeholders. However, it had a much smaller decision-making role than Germany’s Commission. The result is that while support for transition is strong in both countries, just transition seems to be a less tensely and urgently debated issue in Canada than in Germany.
Both countries are making significant efforts to transition away from fossil fuels. However, Germany can make its transition more just by learning from Canada’s example. Rather than concentrating decision-making power in a single Commission, Germany can divide roles among different government bodies. This would allow greater capacity to engage with diverse stakeholders and would strengthen procedural justice. By increasing social investment and financing regional development, both Germany and Canada can achieve a just energy transition.