Policies for Just Transition: Reducing Public Fears, Reducing Emissions

Sydney Law School students Felicity Macourt, Catherine Ku, Max Vishney and Sam Alexander-Prideaux propose a series of policy recommendations for Australia to sustainably and justly move away from coal.

Image by Luca Bravo Yoel, via Unsplash

The following model was proposed for the Sydney University Law Society’s first ever Policy Pitch, a competition that prompts students to consider how the law can be used for social justice. After entering the competition, we were tasked with presenting a policy proposal to a government department about how Australia might achieve a just transition away from coal mining. In developing our proposal, we aimed to achieve a realistic just transition that reduces Australia’s emissions while overcoming fears of unemployment caused by mine and coal-fired plant closures, as well as perceptions that economic reliance on coal extraction is necessary.1

Attempts to reduce Australia’s emissions have been met with reluctance given the widespread perception of an economic reliance on coal extraction — an assumption engendered by the lobbying and inordinate influence of mining companies and the Mineral Council.We think, however, that the political viability of the transition process lies not with the mineral council but with miners and mining communities, without whose labour the mining industry would grind to a halt. Radical reform is necessary in order to quell the very real effects that climate change will have on our futures. Our proposal highlights four key steps to a just transition:

1. Balancing political and industrial relations concerns 

Creating a federal regulator responsible for overseeing the orderly and coordinated closure of mines and coal-fired power plants.

To overcome the uncertainty and distress caused by unfettered decision making by power station owners, we would legislate for transparent regulation of closures by a tripartite, independent statutory authority.3The authority would be responsible for regulating gradual closures of mines and coal-fired plants in order to ensure appropriate resource allocation, as well as certainty for workers, communities and investors; prioritising the closure of mining areas in which there are other potential industries or educational opportunities, investing in ‘cluster’ policies, and moving older workers to mines that are slated to be closed last.

To prevent workers from feeling abandoned by the environmental movement, we would embed unions and community groups in decision making, by involving them in the statutory authority’s decision making process. By giving the Construction, Forestry, Maritime, Mining and Energy Uniona seat at the table, we would ensure that those at the coal face of a transition away from the mining industry feel represented and listened to, and avoid an Adani-esque fiasco whereby remote mining communities felt antagonised by environmentalists.

Finally, we would create subsidies protecting the long-term interests of workers and their communities.This would entail obligations for owners to reskill young workers through pre-closure education and training programs, to provide jobs in site rehabilitation (a process that can last for more than ten years, while also potentially stimulating tourism)5for older workers that have no desire to be reskilled, and finally, to provide adequate redundancy packages and pensions to those at the point of retirement.

2. Managing economic and budgetary considerations 

Fiscal intervention in coal-mining regions with a view to reskilling workers and promoting new industries in the area, including staff reallocation based on age, site rehabilitation and enforcing adequate redundancy packages.

Unemployment, underemployment and undignified retirements are not necessary outcomes of mine closures. Rather, they are outcomes of poorly executed mine closures, such as those in the Northern power station in the remote town of Port Augusta (SA) and LaTrobe Valley’s Hazelwood plant. In both cases, mines were rapidly closed, within five months of the announcements, and owners indicated no apparent intention to adequately transition workers. Therefore, owners are not well placed to provide a just transition due to inadequate profit incentive. Instead, power should be rebalanced toward governments to regulate transparent mine closures and subsidise redundancy packages.

The International Energy Agency predicts that coal’s share of global energy generation will decline from 40% to about 5% by 2040.6 Demand for thermal coal has decreased in response to the development of cheaper, more environmental renewable energy options.Similarly, more sustainable Electric Arc Furnaces technologies have created uncertainty around the value of metallurgical coal.Ultimately, any foreseeable short term costs of a just transition are preferable to the likely long-term environmental costs of climate change to the Australian economy (including increased risk of natural disasters).9

3. Adapting the Green New Deal to the Australian context     

Amending the National Greenhouse and Energy Reporting Act 2007 and its associated legislative instruments to mandate reporting and subsequent taxation of scope 3 emissions.

Drawing from the Green New Deal which aims to create millions of ‘green collar’ jobs and achieve global net-zero emissions by 2050, there are two distinct elements that should be assessed and appropriately adapted in Australia.10-12

First, radically restructuring to the small scale economy can promote financial stabilisation. For example, empowering small, local businesses whose loans are from the community owned Bendigo Bank also leads to relatively smaller repercussions that are “absorbed by a community who are emotionally invested in their local town”.13 Microfinance services could also provide insurance, training, health services and eco-entrepreneurship skills in teaching people how to start or manage green businesses, as well as providing small loans to groups of borrowers to overcome common problems of moral hazard and adverse selection.14 15

Furthermore, a complete transition to renewable energy, environmental transport and building infrastructure requires direct governmental investment and regulation. For example, increasing the cost of fossil fuels would facilitate this transition, however this must be coupled with adequate welfare systems to protect the most vulnerable from rising prices in food, fuel and goods.16 17 There is also huge potential in multi-billion dollar world market for future technology including power generation, with an estimated $13.69 trillion to $20.87 trillion of global wealth creation by 2050 through the development of clean technology patents such as bio-fuels, fuel cells, hydro, wind and solar energy.18 The rapid expansion of roof-top solar panels in NSW reflects the existence of consumer change facilitated by supportive government policy, such as the feed-in tariff which enables credit customers to send unused electricity back to the power grid.19

4. Accounting for scope 3 emissions

Encouraging and subsidising locally-sourced investment into renewable energy.

The Greenhouse Gas Protocol for carbon accounting defines scope 3 emissions as indirect emissions that are both ‘upstream’ and ‘downstream’ in a company’s value chain.20 For a coal mining company, this would range from the emissions created by and for the machinery powering extraction to the emissions of end-users burning coal sold to them. We propose amending the National Greenhouse and Energy Reporting Act 2007 and its associated legislative instruments to mandate reporting of estimated scope 3 emissions, which are currently exempt, thereby making companies accountable for the full extent of their emissions.

Recognising scope 3 emissions is an important step towards achieving adequate environmental policy. In the Rocky Hill case earlier this year, the estimated scope 3 emissions of the project were more than twenty times greater than its scope 1 and 2 emissions. Under the status quo, proponents of change struggle against the specious argument that Australia only contributes a small percentage of global carbon emissions, where the true impact is much higher, given our coal-exporting economy. By facilitating the estimation of Australia’s true impact on global carbon emissions, mandating reporting of scope 3 emissions would generate political will for greater environmental protections.

It is immediately apparent from our research that transitioning away from coal mining is absolutely essential. That transition cannot happen until the Australian government ensures a just transition by regulating and subsidising a just transition, in order to protect workers and their communities. The wealthy elite should be tasked with shouldering the burden of climate change, not vulnerable workers.

These policy recommendations were presented at the Sydney University Law Society’s inaugural Policy Pitch competition on October 28, for which authors Felicity Macourt, Catherine Ku, Sam Alexander-Prideaux and Max Vishney were awarded first place.

Felicity Macourt is currently studying a Bachelor of Arts/Law, majoring in English and has competed extensively in public speaking competitions including debating, mock trial and mock United Nations. Having worked at Firths – The Compensation Lawyers and UBK Lawyers, she received the Walter Ernest Savage Prize for first place in Foundations of Law and is also a member of the SULS Wom*n’s Committee.

Catherine Ku is in her second year studying Arts/Law majoring in Sociology, and has competed in various debating, public speaking, mock trial, mock United Nations and mooting competitions.

Sam Alexander-Prideaux is a second year Bachelor of Arts and Bachelor of Laws student, majoring in Philosophy. He works as a trade union official for the MEAA, is Vice-President of the Sydney University Labor Club, is involved in policy making with Young Labor Left, and as Secretary of Sydney Young Labor has recently organised a contingent to visit the Pilliga region and meet with community groups and local activists to protest against Santos’ upcoming mining applications in the region.

Max Vishney is second-year Bachelor of Arts and Bachelor of Laws student majoring in International Relations. He is a member of the SULS Social Justice and Equity Committee and a Development Officer of the USU Debates Committee, and has contributed articles on environmental regulations and policy to Dissent and Honi Soit.