ÐÓ°ÉÂÛ̳

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Results Briefs November 10, 2020

Coal Mine Closure and a Just Transition for All

As the world transitions away from coal, the challenges associated with closing mines and their associated thermal power plants, along with regenerating coal-dependent communities, continues to slow the rate at which this transition can take place. To overcome these barriers and assist governments in preparing and planning for a managed transition out of coal, we analyzed in 2017 11 ÐÓ°ÉÂÛ̳ lending operations on coal sector adjustment from the early 1990s to early 2000s, alongside 5 other country-level coal transitions, to arrive at 9 major lessons for contemporary energy transition in coal regions. These lessons and the analysis underpinning them can be found in the report entitled ¡°Managing Coal Mine Closure: A Just Transition for All.¡± The lessons formed the basis of a subsequent Coal Sector Transition Assessment Framework, developed by the team in 2018, which guides our current dialogue and operations on coal transition with government clients around the world. The framework, first applied in Western Macedonia¡¯s major lignite operations with support from the European Commission (EC), outlines a practical, step-by-step series of actions undertaken by government with the support from relevant third parties. The framework has three pillars: Pillar 1¡ªgovernance structure; 2) Pillar 2¡ªpeople and communities; 3) Pillar 3¡ªenvironmental reclamation, and repurposing of former mining land and other assets. It considers interventions required along these three pillars over three distinct phases of coal sector transition: (i) pre-closure; (ii) closure; and (iii) regional transformation. By working upstream to turn many assets often considered risks ¨C mining lands, thermal power plant investments, and job¡ªinto opportunities, the approach moves beyond a simple risk mitigation approach to one that is transformational, dynamic, forward-looking and optimistic about the future of present-day coal dependent regions.

Challenge
Coal remains a mainstay of the power sector globally, heavily concentrated in many countries that either produce and/or consume coal.  But coal is increasingly being displaced by gas and renewables, and the transition to a lower carbon future, away from coal, is inevitable.  However, in many countries there are whole regions¡ªsuch as the Western Macedonia region of Greece, Shanxi Province in China¡ª dependent on coal mining, usually directly integrated with the power sector. Closing these mines and transitioning away from coal can induce significant socioeconomic and environmental impacts, if not managed well. Some important questions to be asked early on in the planning phase include: ¡°how can coal mine closure be managed to ensure no one is left behind?¡± and ¡°what might be the lessons from past coal mine sector adjustment or from contemporary transitions to inform government decision-making on energy transition pathways? Given the ÐÓ°ÉÂÛ̳¡¯s past support to coal mine transition in the 1990s/early 2000s and valuable lessons learned are being harnessed to assist our clients meet this growing challenge. This ground-breaking, cross-cutting work forms the analytic basis of a new global work program in the ÐÓ°ÉÂÛ̳ ¡°Support to Energy Transition in Coal Regions¡±. Following the analytical work in FY19 (July 2018 ¨C June 2019) and the release of the ¡°¡± report at the United Nations Conference of the Parties (COP) 24 in Katowice, Poland; the ÐÓ°ÉÂÛ̳ launched in August 2019 a global program entitled Support to Energy Transition in Coal Regions housed within the Energy and Extractives Global Practice, with activities already underway in a first phase in Western Balkans and Ukraine. In addition, the team has on-going work in China, Poland, Romania, Bulgaria and South Africa. 


Approach
In the Managing Coal Mine Closure, Achieving a Just Transition report, two Global Practices (Energy and Extractives; and Jobs and Social Protection) and one Global Theme (Climate Change) worked together to review 11 past coal mine closure investment loans delivered in the 1990s and early 2000s, complemented by case studies on coal mine closure in the USA, United Kingdom, Netherlands, and China. 9 lessons were drawn, organized around three pillars: (i) governance systems; (ii) people and communities; and (iii) land and environmental reclamation. The lessons pointed to the need for sustained stakeholder engagement, advance planning, and adequate budgets to mitigate immediate economic shocks in coal-dependent regions. Crowd sourcing finance, strategy development and repurposing of assets are further required to ensure that over time these mono-industry regions recover and flourish.


Results
The Managing Coal Mine Closure, Achieving a Just Transition (ÐÓ°ÉÂÛ̳, 2018) report (and the new business it has generated) positions the ÐÓ°ÉÂÛ̳ at the cutting edge of global discussions on energy transition, and key actions to meet global climate targets. It is the first research piece of its kind to succinctly distill lessons learned on past coal sector adjustment exercises and offer governments practical ways to begin the difficult process of planning and prioritization. Already the report's findings have generated in-country