Accelerating Just Transitions for the Coal Sector

Policies for people-centred and just transitions: Ensuring a fair energy future for everyone

Summary

  • Coal transitions in the power sector must be people-centred and just, involving comprehensive stakeholder engagement with the goal of reaching broad consensus around the transitions and on a set of policies to deal with their consequences.
  • An estimated 7.8 million people worldwide, including informal workers, worked in coal-related activities in 2022, of which 3.1 million worked in coal mining. Coal accounts for just 0.25% of global employment, but the share can be much higher in areas around coal mines. Coal jobs are concentrated in Asia – 3.9 million in China, 2.1 million in India and 0.4 million in Indonesia. In recent years, employment has declined as labour productivity has improved, due mainly to mechanisation in China, where 2.6 million mining jobs have been made redundant since 2000 despite rising production. While formally employed coal miners around the world tend to be relatively well paid, a large share of informal workers suffer from low pay and dangerous work conditions.
  • National pledges to cut emissions and decarbonise power, if fully implemented, would have a huge impact on coal-related employment, especially coal mining. In the APS, total coal employment declines to 5.6 million in 2030, with over half of the job losses resulting from a fall in coal production and consumption (mainly in the power sector), though productivity improvements mean that jobs would decline substantially even if there were no decrease in coal use. Of the jobs lost globally, around 1.9 million are in emerging and developing economies and 325 000 in advanced economies.
  • The public acceptability and justness of coal transitions depend on effective policy measures to address the loss of jobs. Options include short‐term income support such as severance compensation packages, welfare payments and provisions for early retirement. Some governments offer education and training, career counselling and job assistance for coal workers who are made redundant. At the end of 2023, just 14% of coal workers in the most coal-dependent countries were covered by just transition policies, though this represents an improvement of 10% over 2022. Measures such as industrialisation or environmental rehabilitation initiatives are also needed to support economic development in coal‐dependent regions, which may be underdeveloped.
  • The transition away from unabated coal‐fired power can be achieved without decreasing the affordability of electricity, thanks to the competitiveness of alternative clean power sources. In the APS, the costs of replacing coal‐fired generation and the system services provided by coal as well as upgrading and expanding the grid are more than offset by the massive fuel cost savings from reduced demand for coal, resulting in the average cost per unit of electricity worldwide decreasing by over one-fifth between 2022 and 2050, though savings vary by region.