Australia’s coal-fired power plants are leaving the electricity grid. This transition is already in full swing, like cheaper renewable energy sources displacing coal and closing older generators. Australia’s oldest coal-fired power station, Liddell, is about to close. Eleven coal-fired power plants closed between 2013 and 2020, and at least seven others will close between now and 2030.
Shutting down a power plant sounds bloodless. But if not done properly, it can be devastating for affected workers and their families, and economically and socially disruptive to the communities in which they are located. Many cities have sprung up around coal mines and power plants. We cannot just leave it to the market to make the transition smooth.
To better manage the vital human part of our transition to a low-carbon electricity system, the Australian Council of Trade Unions (ACTU) recently proposed a solution. It called on the federal government to establish an independent National Energy Transition Authority.
This is an excellent idea and long overdue given the pace at which our coal plants are closing. Countries that have embraced this approach, such as Spain, have seen the benefits, economically, socially and even politically.
What would this authority do?
An energy transition authority, as envisioned by ACTU, would have three main functions:
develop programs to support affected workers, including through re-employment in similar facilities, or retraining and hiring for sustainable industries
support, coordinate and part-fund plans to develop new industries in coal-dependent regions such as Gippsland in Victoria and the Hunter Valley in New South Wales, including attracting federal and state investment and incentives to boost investment in local sustainable industries
ensure that education and training programs and infrastructure are in place to support industrial diversification in these regions.
Do we actually need a new authority?
This is not the first time we see such proposals for authorities. The trade union movement has proposed several variants in the past, and Labor supported one similar initiative before the 2022 federal election.
After winning government, Labor set up a net zero economy task force aimed at advising on how best to support regional communities during the transition to a low-carbon economy.
The Greens have also proposed an expanded version of this authority, which would take on additional advisory and law-reforming duties. A enquiry in the Greens’ bill last month by a Labor majority committee described the measure as “premature” as the government’s task force explores options to help regions.
Labor, of course, would prefer to raise its own version. That is quite possible – the proposed authority has broad support outside the labor movement.
But some were critical, with experts from the Australian Energy Council ask if such an authority would be necessary as regional development programs already exist.
Regional industrial transitions are complex and demanding sustainable governance over long periods. Australia’s existing programs are not sufficient and are often fragmented across a patchwork of federal, state and local government departments.
A new federal authority would help coordinate existing programs at all levels of government, bring in the additional capabilities of the federal government and provide a sustained, long-term focus on the challenging task of regional transition.
In a few weeks we will find out whether the Albanian government decides to include such a body in its May budget.
Read more: NSW’s largest coal mine to close in 2030. What about the workers?
The moral plea for a transitional authority
An authority that is committed to smoothing the path of the energy transition is, in my view, justified on moral grounds. It would raise the voices of workers and regional communities most affected by the transition to a low-carbon economy, ensuring a fair distribution of the benefits and burdens of the transition.
Those whose jobs are at risk have a moral claim to government support to help them adapt to these changes. But so are the residents of these regions who never enjoyed the benefits of well-paid union jobs in the fossil fuel industry in the first place. They too should share in the benefits.
That is why the ACTU rightly proposes a broader mandate for the authority at the community level, to promote regional development that is not only more environmentally sustainable, but also more socially diverse.
The political case
Residents of coal and gas regions are often skeptical of the transition to a low-carbon economy and may see it as a threat. An authority like this could build local support by showing what comes next.
In Spain, for example, the incumbent Spanish Socialist Party is reaping the political benefits of the “just transition agreement” it negotiated with unions, employers and community representatives in coal regions in 2018.
This agreement made it clear that coal mining would cease by the end of 2019. In return, the government agreed to provide €250 million (A$407 million) over the next eight years in worker support and community-level investment.
In the April 2019 national elections, the incumbents won. interesting, our research found that their vote share in mining regions covered by the agreement has increased compared to comparable rural areas not covered by the agreement.
Spain and Australia clearly have different political contexts. But our research does suggest that there are potential political benefits – not just costs – offered to governments that provide climate leadership based on a just transition strategy.
An Australian Transitional Authority will only be politically successful if it works with – or helps establish – local bodies with similar mandates, such as the Latrobe Valley Authority and the Collie Delivery Unit.
Working with locally supported groups is common sense. It is also supported by research showing that fossil fuel burning communities do not like having their future dictated by Canberra. But if they feel heard and see their concerns addressed during the transition, they will be more inclined to support them.
For years, organizations such as The next economy and the Real Deal project have been working on the energy transition in communities such as Smoothstone, one of the cities in Queensland most dependent on gas and coal. This community-building expertise would be vital for the authority to draw upon.
From the power stations to the mines?
If Australia establishes an energy transition authority, the immediate task is to help catalyze just and politically smooth transitions in coal-fired power plants.
But a greater task awaits. Australia’s domestic emissions are reduced by emissions from coal and gas exports. If the authority proves itself, it could start supporting workers and communities to phase out Australia’s export-oriented coal mining and fossil gas production industries.
Read more: Regional cities are at risk of being wiped out by the transition to net-zero. This is their best chance of survival