Low-carbon transition in a coal-producing country: A labour market perspective

Jan Baran, Aleksander Szpor () and Jan Witajewski-Baltvilks

Energy Policy, 2020, vol. 147, issue C

Abstract: The decarbonisation of energy in a coal-producing country involves phasing out the coal sector and reducing employment in coal mining. Our case study of Poland reveals that in the past, half of the workers that left the mining sector failed to move to other sectors and left the labour market. This could be explained by the lower education levels of miners and lower wages in other sectors relative to mining. We use a mathematical model to demonstrate that if ex-miners fail to move to green or neutral sectors, decarbonisation involves a net loss of the labour force, regardless of the number of jobs created in the green sector. The loss of labour constitutes a macroeconomic cost that must be added to changes in energy system costs. The size of the cost does not depend on whether reduction of emissions is achieved by the substitution of coal with renewable energy sources or by an increase in energy efficiency. The size of the cost is largest when the reduction of emissions is achieved by replacing coal with imported gas. Finally, we demonstrate how costs related to the imperfect transition of labour could be taken into account in numerical general equilibrium models.

Keywords: Just transition; Coal phase-out; Macroeconomic costs of transition; Labour immobility (search for similar items in EconPapers)
JEL-codes: E24 J24 Q43 Q52 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:147:y:2020:i:c:s0301421520305930

DOI: 10.1016/j.enpol.2020.111878

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