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An ambitious plan for a Canadian just transition

Shift Storm newsletter—August 2023 edition

September 25, 2023

8-minute read

The following is a re-print of the July 2023 edition of Shift Storm, the CCPA's monthly newsletter which focuses on the intersection of work and climate change. Click here to subscribe to Shift Storm and get the latest updates straight to your inbox


Every year, the CCPA, in collaboration with dozens of experts and organizations from across the country, publishes the Alternative Federal Budget (AFB), which lays out a comprehensive, fully-costed policy agenda for the federal government to take on in the coming year.

The latest edition of the AFB, Building Momentum, includes among its 26 chapters a section on “Fair and equitable transition.” It starts by making the case for a fossil fuel phase-out before turning to the need for bold public leadership and a green industrial strategy that puts people first.

Here are some of the AFB’s key proposals in this area:

  • Develop a National Green Industrial Strategy to align today’s public and private investments with Canada’s long-term goal of a net-zero economy by 2050. It sounds obvious, but we are currently spending too much money on short-term solutions, such as coal-to-gas power plant conversions or carbon capture for oil extraction, that make long-term decarbonization more expensive and challenging.

  • Allocate $15 billion through a new Public Climate Bank toward economic diversification in regions currently dependent on fossil fuels. It is vital that these communities have options to turn to as their coal, oil and gas industries wind down. That’s not something the market will do on its own.

  • Create a Just Transition Benefit to support workers displaced by environmental policies, including the winding down of fossil fuel production. This $100 million per year program will provide income support, retraining credits, relocation assistance and whatever other compensation workers need in their transitions to cleaner industries.

  • Fund an Inclusive Workforce Development Program to create opportunities for underrepresented groups in the clean economy. Indigenous, racialized, immigrant and women workers have been historically excluded from many professions that are key to building a greener future, especially in the skilled trades. Not only is closing that gap the right thing to do from an equity perspective, but we also desperately need to grow the pool of skilled workers to meet the labour demands of the clean economy. The AFB’s proposed $4 billion program is a win-win opportunity.

The full chapter is well worth a read as a summary of the latest thinking on the issue of a just transition in Canada. Indeed, there is no better crash course in progressive policy than a full review of each year’s Alternative Federal Budget!

As we turn to this month’s research, you’ll see echoes of our recommendations in the work being done by workers, academics and governments around the world. A global consensus on a people-focused green industrial transition is emerging, though most governments continue to drag their feet when it comes to implementation.

Storm surge: this month’s key reads

The path to a Global Green New Deal runs through public ownership

Sean Sweeney of Trade Unions for Energy Democracy (TUED) has long been one of my favourite thinkers when it comes to just transition issues. His TUED Working Papers are all worth a read for their novel ideas and unapologetic prose. The latest entry, Beyond Recovery, is no exception.

In this wide-ranging paper, Sweeney takes issue with the watering down of the Green New Deal agenda and in particular with the left’s diffident embrace of (neo)liberal climate solutions. Carbon pricing, for example, is an inherently conservative economic idea that has somehow found its greatest champions among progressives. Similarly, Sweeney is concerned that the left’s increasingly mainstream push for public investment in a cleaner economy has become disconnected from more radical calls for public ownership of the clean economy.

So-called “green recoveries” from the COVID-19 pandemic, including the U.S. Inflation Reduction Act, the European Green Deal and Canada’s own recent forays into green industrial policy, highlight the problem. The tens of billions of public dollars pouring into the economy are overwhelmingly being funneled into the private sector based on the long-standing (neo)liberal assumption that the benefits will trickle down to workers and, in this case, the environment.

“Recovery is better than austerity,” argues Sweeney, “but it will do nothing to address climate change or meaningfully advance the transformative goals of the [Global Green New Deal].” Ultimately, a cleaner form of capitalism is still capitalism, and that’s not something the left should be satisfied with. Achieving global climate goals while advancing social equity and international cooperation is only possible with a renewed role for public ownership in the economy.

Alberta renewables moratorium a disastrous own goal

Premier Danielle Smith’s decision to halt the development of large-scale renewable projects in the province surely counts among the most nakedly political and self-defeating policy moves in recent memory.

In short, the province has put a six-month pause on approvals of new projects ostensibly due to concerns around land use, cleanup and grid capacity. Those are all valid issues, but a complete moratorium is a farcical overreaction. Not only can all of those concerns be addressed without shutting the industry down, but it is also a huge and unnecessary economic blow given the rapid growth of the clean energy industry in the province.

The Pembina Institute was quick to respond to the announcement with an analysis of affected projects. Co-authors Jason Wang and Will Noel find that the moratorium will hold up 118 projects representing “at least $33 billion of investment and more than 24,000 job-years.” And while the long-term consequences are more speculative, there is a risk that renewables investors will permanently flee Alberta for less antagonistic jurisdictions even after the moratorium is lifted.

There is also, of course, the egregious contrast between the treatment of the renewables industry as compared to the fossil fuel industry. The price tag for cleaning up Alberta’s oil and gas fields and abandoned wells is well over $100 billion, as I noted in last month's newsletter. Yet it’s hard to imagine the province blindsiding that industry with a blanket ban—as welcome as that might be from a climate perspective—the way they did the renewables industry.

Investors, communities, environmentalists and others have condemned the decision. Through it all, Smith has maintained her combative tone toward climate action.

Research radar: the latest developments in work and climate

Fossil fuel workers lead the charge for a just transition. Over on the CCPA blog, my colleague Jon Milton interviews Alexandra Tavasoli from Iron & Earth, an Alberta-based non-profit that helps fossil fuel workers transition into new industries. Tavasoli makes a strong case for why state support is essential for a successful transition, but only if it does not come at the expense of worker and community autonomy.

Learning lessons from Germany’s coal phase-out. The Canada-Germany Energy Partnership has published an extensive case study, Supporting just transitions in Canada and Germany, that draws lessons from Germany’s 60-year transition out of coal. The report concludes that, to be effective, transition policies must be proactive, focused on economic diversification, cross-jurisdictional, cushioned by social policies, and tailored to local circumstances.

Hitting global climate targets means shutting down 60 per cent of fossil fuel extraction. In their updated Sky’s Limit report, Oil Change International provides your periodic reminder that we cannot burn all the oil, gas and coal we’ve committed to digging up. This latest briefing calls out Canada, alongside the United States, Norway, Australia and the United Kingdom, for failing to walk the talk on winding down fossil fuels.

How we define “energy communities” has big implications for transition policies. I’m a big advocate for targeting public investment in the communities most vulnerable to transition risks, which is something the U.S. Inflation Reduction Act does.. A new analysis from the World Resources Institute, however, finds that the U.S. government’s definition of energy communities—which determines where certain transition funds can be spent—leaves out a lot of vulnerable places while failing to sufficiently prioritize the communities in greatest need. Coming up with a better definition of affected communities would be a worthwhile exercise for Canada, too.

Is Biden’s just transition failing? Workers and the Green-Energy Transition, a new paper from the National Bureau of Economic Research, a U.S. think tank, has been making the rounds as an indictment of Biden’s green transition agenda. Indeed, the study finds that fewer than one per cent of workers who leave a “dirty” job find a new “green” job. But is that such a problem? When a fossil fuel worker loses their job, the important thing is that they find new work. It doesn’t really matter whether it’s in clean energy or manufacturing or agriculture or something else. Still, the paper raises some important concerns about the challenges of finding new work at all, especially for older workers displaced by environmental policies.

Australia grapples with costs of action—and inaction—on industrial policy. Like Canada, Australia is mired in debate about just how much governments should spend on decarbonization. A new report by the consultancy Deloitte, All Systems Go: Powering Ahead, finds that the country stands to experience AUD$435 billion in new economic benefits by 2050 if it successfully transitions to a clean energy system. Failing to transition, on the other hand, will come at a cost of AUD$270 billion as demand for Australia’s fossil fuels dries up. Kickstarting the transition will require an up-front capital investment of at least AUD$120 billion, which isn’t so bad in context. But while the long-term economics look good, the short-term politics do not.

Study maps in-demand skills for the coming green economy. A UK-based consultancy, Cogent Skills, has published A greenprint for skills for the low-carbon industries. It’s a business-focused piece that sees industry playing the lead role in economic development, but the report’s call for sector-specific skills strategies—i.e., workforce development plans that are in line with the long-term needs of a cleaner economy—is nevertheless a welcome one.

Scottish NGOs call for more urgency in just transition policy. The Climate Emergency Report Group, a coalition of Scottish groups, released Committing to delivery, which calls on the government to follow through on its just transition promises. Specifically, the coalition wants to see a “planned, investment-led pathway… [with] a fair and equitable distribution of costs and benefits.” Scotland has long been a leader when it comes to just transition planning, but there are growing concerns that the government is not delivering on that earlier momentum.

Acceptance of just transition follows coal phase-out decisions, not the other way around. A study published in Energy Research & Social Science of perceptions of “just transition” in European coal communities, “Of hopeful narratives and historical injustices,” includes the critical finding that some places were only receptive to the idea of a just transition after their governments committed to a firm phase-out of coal. In other words, there is little point in trying to sell a just transition to workers and communities before the government has committed to a transition in the first place. Take note, Canadian governments.

Unionization leads to lower emissions. In a new paper in the journal Environmental Science and Pollution Research, “Does unionization reduce CO2 emissions in Canada?,” Anupam Das finds that for every one per cent increase in unionization rates, greenhouse gas emissions fall by about 0.25 per cent. It’s a bit of an oddball study, and I’m not totally convinced the relationship is causal, but it’s still some interesting food for thought.

Do we need a just transition for AI? A new report from the consultancy McKinsey, Generative AI and the future of work in America, projects that, by 2030, 30 per cent of hours worked in the U.S. today could be automated. Whether that means job losses, productivity growth and/or a shorter work week remains to be seen, but there’s no doubt that large-scale change is on our horizon. I’m a bit obsessed with the consequences of the latest generation of artificial intelligence, which overlaps in interesting ways with the climate-focused just transition conversation, so expect some more updates on this file in future newsletters.

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