Place, Productivity, and Prosperity by Arti Grover

Author:Arti Grover
Language: eng
Format: epub
Publisher: World Bank Publications

BOX 5.2 Managing the Closure of Coal Mines: Achieving a Just Transition for All

The coal industry is contracting, causing permanent job loss across the world. The pace is likely to pick up as efforts intensify to reduce carbon dioxide (CO2) emissions. In a recent report, the World Bank studied the experiences of Poland, Romania, the Russian Federation, and Ukraine, complemented by data on impacts of coal industry adjustment in the Netherlands, the United Kingdom, and the United States, to provide lessons on a humane and just transition for the towns that grew up around mines that are now closing (Stanley et al. 2018).

These communities face severe challenges to reinventing themselves. The potential to create jobs is small, given the narrow economic base. The geographic isolation of most mines reduces local reemployment potential. The disparities of wages between coal mining and alternative professions—as well as the reluctance to shed a deep-seated vocational identity centered on strength, determination, hard work, and risk—are stumbling blocks for reemploying coal miners. The extreme dependence of other local industries on the multiplier effect from coal further complicates finding new jobs locally. The report concludes that

There are few if any instances of fully satisfactory economic rejuvenation outcomes in mono-industry coal mining towns … even if good intentions and sufficient funds are deployed. For instance, the United Kingdom long targeted various forms of regional aid with the intention to foster job creation at several of its main mining areas, including through a program of coalfield site reclamation and redevelopment that disbursed more than British pound sterling (GBP) 600 million between 1996 and 2007. In addition, British coal mining regions have been supported by the European Union, both through disbursement of its “standard” structural funds and specific programs like the RECHAR program [for coalfield regeneration] that deployed more than GBP 250 million over 10 years. Still, decades after the major waves of mine closures in the United Kingdom, labor market impacts can still be felt—especially where difficulties are entrenched, such as South Wales. Therefore, mobility support for workers to relocate out of mono-industry coal mining towns may sometimes represent the better option (Stanley et al. 2018, 17).

Saying that migration may be the better option does not imply callousness to the potential disruption to families and communities. The report offers suggestions on how to achieve these transitions in an orderly way and cushion the blow, including income support instruments and labor market programs to address the needs of redundant workers and community support initiatives and new job creation programs (reflecting different levels of resilience to downsizing the sector), as well as policies to restore the environment.

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