Sharp declines in coal demand and production will occur if the targets in the Paris Climate Agreement and Sustainable Development Goals are met. Regions dominated by coal production, such as the Hunter region in NSW and particularly the Local Government Areas of Muswellbrook and Singleton, will suffer most. Instead of leaving the region to suffer this economic contraction unaided, Federal, State and Local governments could aid the transition and avoid or alleviate economic disaster.
While the Australian coal industry and its lobbyists continue to maintain that the nation’s thermal coal export industry is booming on the back of record export revenues, the reality is very different.
The Hunter Valley wine sector makes a significant contribution to the Hunter Valley economy. This includes the economic activity associated with grape growing in vineyards and wine production, and extends to the economic activity from wine related tourism. These three components of the Hunter Valley wine sector also have strong linkages to other sectors of the Hunter Valley economy, in particular the businesses that supply the goods and services required for grape growing, wine making and the wine tourism experience, as well as the goods and services demanded by employees. Consequently, the contribution of the Hunter Valley wine sector to the Hunter Valley economy is greater than just its direct effects.
If New South Wales were to set an average industry target of having 60% of each mine’s footprint rehabilitated, and give the owners of the nine largest mines in the state five years to comply with that target, there would be 734 jobs created. A more ambitious program to eliminate the rehabilitation deficit over three years would see 1,223 jobs created for that period.
Communities grow around power stations and the mines that supply them. They are unique communities bonded in many cases by history, geography, difficult and dangerous working conditions and good unionised jobs. They are also uniquely vulnerable in their heavy dependence on the coal power industry. This analysis of transitions in resource economies internationally and here in Australia provides valuable insights into the ingredients of success and the wide scope of outcomes.
For the Latrobe Valley to successfully achieve a just transition, two equally important processes must
occur: (1) an orderly and planned transition away from coal; and (2) a collaborative and inclusive
transition towards a sustainable local economy.
The need for a so-called 'just transition' is acknowledged, away from carbon intensive activities, such as coal production and use. But what might a just transition look like in practice? What specific risks need to be managed and what are the best approaches to managing them? There is an urgent need to develop a deeper understanding of these issues.
Over the last half century, large-scale changes to coal industries across Europe, and more recently in the United States and China, have resulted in as many as 4 million coal workers losing their jobs. Drivers of these changes are found in mine
mechanization, government policies and competition from other fuels in down-stream energy demand markets. The impact of coal use on air and water pollution requires that these impacts are mitigated by using less polluting fuels. Shifts away from coal arise, as the cost of alternative fuels decreases and their availability increases. In different countries this shift has been caused by a variety of factors including increased use of nuclear power, increased availability of natural gas and, more recently, increased use of renewable energy. As commercial concerns impact coal use, the coal industry turns to the increased use of mechanization to remain competitive. The overall result has been closure of less efficient mines with consolidation around more efficient, lower-cost, mechanized operations. The varying influences these drivers of change may have on domestic policy responses to energy transition does not, however, deter from the inevitability of coal mine closure . In all mine closure case studies, job losses, and the subsequent socioeconomic impacts borne by families and communities in coal-dependent regions, are significant.
Coal production in Australia is likely to be on a long term declining trajectory. Export demand is a function of economic, technological and policy developments in other countries, all of which point to the likelihood of falling coal use over time, especially for steam coal. There is a clear prospect of lower coal export demand. It is uncertain how international developments will affect Australia steam coal exports, and there is a clear risk of strong reductions in exports demand. But Australia has very large and readily accessible renewable energy resources which promises to be the country’s energy future.
A Summary Report of the Coal Transitions project Based on inputs developed under the Coal Transitions Research Project
Transitioning an industry is a massive economic and social disruption. History shows that this has often been done poorly in Australia, with workers and communities bearing the brunt of such transitions - suffering hardship, unemployment and generations of economic and social depression.
Australia is currently facing one such transition in the coal-fired electricity sector. If Australia manages this transition well, the nation would have a structured and equitable approach that could apply to any industry undergoing similar change in the future.
As the push to decarbonise energy systems escalates globally, the Hunter Region will face particular challenges due to its carbon-intensive economy. Policymakers and planners must balance the need to maintain regional prosperity with the need to reduce carbon footprints and environmental degradation. The transition to a low-carbon economy provides the opportunity to set the course for a resource-efficient and sustainable economy that will promote employment and growth in the Region.
Lisa Lumsden, Repower Port Augusta
Port Augusta had long been South Australia’s coal-fired powerhouse. But a five-year-long community campaign has delivered solar success and an end to the smokestacks.
Hunter Valley Wine & Tourism Association
Nicky Ison, Community Power Agency
Dr Neil Perry, Senior Research Lecturer in Corporate Social Responsibility and Sustainability
School of Business, Western Sydney University
IDDRI and Climate Strategies Coal Transition Case Studies: