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Can Coal Make a Comeback?

By Trevor Houser, Jason Bordoff, and Peter Marsters - Columbia Center on Global Energy Policy, School of International and Public Affairs, and the Rhodium Group, April 2017

From the introduction: Six years ago, the US coal industry was thriving, with demand recovering from the Great Recession, and global coal prices at record highs along with the stock prices of US coal companies. By the end of 2015, however, the industry had collapsed, with three of the four largest US miners filing for bankruptcy along with many other smaller companies. While coal mining employment has been on the decline for decades – from a peak of more than 800,000 in the 1920s to 130,000 in 2011 – the pace of job loss over the past six years has been particularly dramatic. After campaigning on a promise to end what he called his predecessor’s “War on Coal,” President Donald Trump signed an Executive Order in March 2017 ordering agencies to review or rescind a raft of Obama-era environmental regulations, telling coal miners they would be “going back to work.”

This paper offers an empirical diagnosis of what caused the coal collapse, and then examines the prospects for a recovery of US coal production and employment by modeling the impact of President Trump’s executive order and assessing the global coal market outlook. In short, the paper finds:

  • US electricity demand contracted in the wake of the Great Recession, and has yet to recover due to energy efficiency improvements in buildings, lighting and appliances. A surge in US natural gas production due to the shale revolution has driven down prices and made coal increasingly uncompetitive in US electricity markets. Coal has also faced growing competition from renewable energy, with solar costs falling 85 percent between 2008 and 2016 and wind costs falling 36 percent.
  • Increased competition from cheap natural gas is responsible for 49 percent of the decline in domestic US coal consumption. Lower-than-expected demand is responsible for 26 percent, and the growth in renewable energy is responsible for 18 percent. Environmental regulations have played a role in the switch from coal to natural gas and renewables in US electricity supply by accelerating coal plant retirements, but were a significantly smaller factor than recent natural gas and renewable energy cost reductions.
  • Changes in the global coal market have played a far greater role in the collapse of the US coal industry than is generally understood. A slow-down in Chinese coal demand, especially for metallurgical coal, depressed coal prices around the world and reduced the market for US exports. More than half of the decline in US coal company revenue between 2011 and 2015 was due to international factors.
  • Implementing all the actions in President Trump’s executive order to roll back Obama-era environmental regulations could stem the recent decline in US coal consumption, but only if natural gas prices increase going forward. If natural gas prices remain at or near current levels or renewable costs fall more quickly than expected, US coal consumption will continue its decline despite Trump’s aggressive rollback of Obama-era regulations.
  • While global coal markets have recovered slightly over the past few months due to supply restrictions in China and flooding in Australia, we expect this rally to be short-lived. Slower economic growth and structural adjustment in China will continue to put downward pressure on global coal prices and limit the market opportunities for US exports. Indian coal demand will likely grow in the years ahead, but not enough to make up for the slow-down in China. The same is true for other emerging economies, many of whom are negatively impacted by decelerating Chinese commodities demand themselves.
  • Under the best case scenario for US coal producers, our modeling projects a modest recovery to 2013 levels of just under 1 billion tons a year. Under the worst case scenario, output falls to 600 million tons a year. A plausible range of US coal mining employment in these scenarios ranges from 70,000 to 90,000 in 2020, and 64,000 to 94,000 in 2025 and 2030 -- lower than anything the US experienced before 2015.

These findings indicate that President Trump’s efforts to roll back environmental regulations will not materially improve economic conditions in America’s coal communities. As such, the paper concludes with recommendations for steps that the federal government can take to safeguard the pension and health security of current and retired miners and dependents and support economic diversification. Attracting new sources of economic activity and job creation will not be easy, and even at its most successful will not return coal country to peak levels of past prosperity.

But responsible policymakers should be honest about what’s going on in the US coal sector—including the causes of coal’s decline and unlikeliness of its resurgence—rather than offer false hope that the glory days can be revived. And then support those in America’s coal communities working hard to build a new economic future.

Read the text (PDF).

Hope Below Our Feet: Soil as a Climate Solution

By Anne-Marie Codur, Seth Itzkan, William Moomaw, Karl Thidemann, and Jonathan Harris - Global Development and Environment Institute (Tufts University) - April 2017

Web editor's note: we include this report to provide general knowledge about natural carbon sequestration methods, but we do not vouch for their effectiveness. Further, we note that this report speaks positively about Reducing Emissions from Deforestation and forest Degradation (REDD), which many front line communities, indigenous people, and nations in the Global South convincingly argue is a capitalist greenwashing scheme which simply shifts the burden from the Global North and capitalist class to the Global South and working class. Neither the IWW nor the IWW EUC support REDD or REDD+.

Can the world meet the ambitious goals necessary to avoid catastrophic climate change? A major reduction in greenhouse gas emissions is clearly needed, but there is increasing scientific consensus that even if achieved, this will not be enough. In addition to a drastic reduction in carbon emissions, carbon must be removed from the atmosphere. An important solution is beneath our feet – the massive capacity of the earth’s soils to remove and store carbon from the atmosphere.

Soils hold about three times more carbon than the atmosphere, and an increase in soil carbon content worldwide could close the “emissions gap” between carbon dioxide reductions pledged at the Paris Agreement of 2015 and those deemed necessary to limit warming to 2o C or less by 2100. To meet this challenge, several international efforts to build soil carbon have been launched, with similar measures underway in the United States.

Proposed policies include reforestation and innovative farming, ranching, and land management approaches that will enhance degraded soil and restore its carbon stock.

Read the report (PDF).

Expect the Unexpected: The Disruptive Power of Low-carbon Technology

By Luke Sussams, et. al. - Carbon Tracker, February 2017

The time for energy transformations is now.

Achieving climate stability will require deep and widespread changes in the global energy sector. Fossil fuel industry projections, however, continue to show a future energy system with few changes to that of today. This is in spite of examples of disruption in the energy sector at the hands of the low-carbon transition. This scenario analysis was produced in partnership between Carbon Tracker and the Grantham Institute at Imperial College London and explores the extent to which ongoing cost reductions could see solar photovoltaics (PV) and electric vehicles (EVs) impact future demand for coal, oil and gas. The findings of this study should motivate energy companies and their investors to retire the use of business as usual (BAU) scenarios and further integrate the consideration of downside demand scenarios.

Read the report (PDF).

(Working Paper #9) Are We Moving Away From Fossil Fuels? Separating Facts from Fantasies

By Sean Sweeney - Trade Unions for Energy Democracy, January 31, 2017

Is the World Really Moving Away from Fossil Fuels? Examining the Evidence.

PDF available for download now.

During 2015 and 2016, a number of significant public and political figures have made statements suggesting that the world is “moving away from fossil fuels,” and that the battle against greenhouse gas emissions (GHGs) and climate change is therefore being won. Such statements are frequently accompanied by assurances that the transition to renewable energy and a low-carbon economy is both “inevitable” and already well underway, and that economic growth will soon be “decoupled” from dangerously high annual emissions levels. This optimism has also been accepted by a section of the environmental movement, and even by some unions.

Renewables and Reality 

If the “green growth” optimists are correct, the political implications for trade unions and social movements are profound. For unions, it would mean focusing aggressively on the need to protect the livelihoods of the tens of millions of workers around the world who currently work in fossil fuels and rallying around the principle of “just transition” encoded in the preface to the Paris Agreement. But it would also mean that the need to wage a determined and protracted political struggle against fossil fuel expansion and “extractivism” would immediately become less urgent. In this scenario, trade union efforts would rightly focus on working to shape the next energy system as it rises from the ashes of the old.

But what if proclamations of fossil fuels’ demise are wrong? What if the “momentum” has not shifted, and the transition to renewables-based power is neither inevitable nor well underway? In that case, the struggle against the current model of ownership that drives the growth of fossil fuels and extractivism—that is, the struggle for democratic control and social ownership of energy—remains vital. This would demand redoubled effort and commitment across all sections of our movement. It would mean the level of urgency in the struggle for energy democracy must be increased, activism stepped up, and fresh approaches embraced, encouraged, and endorsed.

Their Optimism, and Ours

In this ninth TUED working paper, authors Sean Sweeney and John Treat document the recent claims of the optimistic, “green growth” narrative; examine the evidence frequently used to legitimize and sustain it; and then consider this evidence in context of the broader trends in the global energy system, drawing on a range of major recent data sources.

What the paper’s analysis shows is that, unfortunately, the world is not “moving away from fossil fuels”; far from it. The recent “we are winning” optimism is misplaced, misleading, and disarming. It must therefore be rejected, and replaced with a more sober perspective that draws hope and confidence not from a selective and self-deceiving interpretation of the data, but from the rising global movement for climate justice and energy democracy, armed with clear programmatic goals and a firm commitment to achieve them.

Unions are urged to circulate the paper and use its contents to stimulate debates on energy policy and political action. Please send comments, additional data, and requests for more information to Irene Shen (ireneTUED@gmail.com).

Download the full paper here.

From Banks and Tanks: A Strategic Framework for a Just Transition

By MG Collective - Movement Generation Justice and Ecology Project, January 2017

Just Transition is a framework for a fair shift to an economy that is eco-logically sustainable, equitable and just for all its members. After centuries of global plunder, the profit-driven, growth-dependent, industrial economy is severely under-mining the life support systems of the planet. An economy based on extracting from a finite system faster than the capacity of the system to regenerate will eventually come to an end—either through collapse or through our intentional re-organization. Transition is inevitable. Justice is not.

Just Transition strategies were first forged by labor unions and environmental justice groups who saw the need to phase out the industries that were harming workers, community health and the planet, while also providing just pathways for workers into new livelihoods. This original concept of Just Transition was rooted in building alliances between workers in polluting industries and fence-line and frontline communities. Building on that history, Just Transition to us represents a set of aligned strategies to transition whole communities toward thriving economies that provide dignified, productive and ecologically sustainable livelihoods that are governed directly by workers and communities.

A Just Transition requires us to build a visionary economy for life in a way that is very different than the economy we are in now. Constructing a visionary economy for life calls for strategies that

democratize, decentralize and diversify economic activity while we damper down consumption, and (re)distribute resources and power. Just Transition initiatives shift the economy from dirty energy to energy democracy, from funding highways to expanding public transit, from incinerators and landfills to zero waste, from industrial food systems to food sovereignty, from gentrification to community land rights, and from rampant destructive development to ecosystem restoration. Core to a Just Transition is deep democracy in which workers and communities have control over the decisions that affect their daily lives.

Read the report (English PDF) | (Spanish PDF).

One Million Climate Jobs: Moving South Africa Forward on a Low-Carbon, Wage-Led, and Sustainable Path

By Brian Ashley, et. al. - One Million Climate Jobs - December 2016

The One Million Climate Jobs Campaign is an alliance of labour, social movements and popular organisations in South Africa that is campaigning for the creation of a million climate jobs as part of a collective approach to the crisis of unemployment and climate change. The Campaign was launched in 2011 and since then has been mobilising thousands of South Africans around real solutions to slowing down climate change, protecting the natural environment, improving the quality of life for all and moving towards a sustainable development path. Climate change will exacerbate inequality and poverty because it reduces access to food, water, energy and housing. Thus it is vital that social justice struggles around these issues incorporate struggles around climate change.

This booklet is a follow-up, six years later, to the first booklet that was produced in 2011. It is based on well- researched solutions for how South Africa can immediately begin a just transition, away from the Minerals-Energy Complex that continues to dominate the South African capitalist economy, to a low carbon economy in which the basic needs of communities are met in an equitable, sustainable and affordable way.

It recognizes that in these six years there have been many developments – for instance, renewable energy is now firmly established as part of the energy mix (although still a minor part); retrofitting buildings, and the development of environmentally friendly construction methods, is being developed, and the Rapid Bus Transit system is being slowly implemented in some municipalities.

But most of these solutions are being pursued within the logic of the market. It is not possible, we would argue, within these market parameters, to respond adequately to the enormous challenges facing us – what is needed is a publicly-driven solution for the shift to a sustainable, low-carbon future. The research that this booklet is based on begins to set out what such a transition could look like. We hope that it will be an important contribution to the ongoing work of building a political movement to struggle around these issues.

Download (PDF).

Reclaiming Alberta’s Future Today

By Regan Boychuk and Brent O’Neil - Reclaiming Alberta’s Future Today, November 3, 2016

As the first step towards reducing Alberta’s dependence on fossil fuels as our primary source of income we must embrace our current environmental deficit. We must admit that climate change is real and that man-made contributions to global warming can be reduced.

After 100 years of exploration we must acknowledge that our provinces conventional oil and gas resources have been depleted. Technically speaking our low hanging fruit has been plucked and what is left is 444,000 oil and gas wells, 430,000 km of pipe lines (the distance to the moon is 384,000 km), 30,000 oil and gas facilities, 900 km of oil sands development, 220 km of tailing ponds, and a 11.2 million ton sulfur pile that dwarfs the great pyramids of Egypt.

Tackling this shameful legacy will be the biggest environmental cleanup project undertaken to date. It will take 1000 rigs 50 years and every willing Canadian to clean up our mess. This change in industry requires a paradigm shift in thinking. Our province no longer see the economic benefit from drilling new conventional oil wells as it once did. The real opportunity for Albertans will come from cleaning up our mess.

No longer can we tackle climate change with taxes and levy’s. We need to start making a real reduction in man-made emissions so our future generations have the same opportunities we once did.

Read the report (PDF).

The Role of Labour in the Fight Against Climate Change

By Asbjørn Wahl - International Transport Workers Federation (ITF), (hosted by Trade Unions for Energy Democracy) November 2016

The climate crisis is steadily coming closer. At the same time, we face a deepening economic crisis, as well as social and political crises. This creates an increasingly serious situation for the future of humanity.

However, given that the various crises have many of the same root causes, going to the core of our economic system, this can contribute to strengthening the mobilisation of social forces needed to break the current trend-–in favour of a democratic and planned development of society.

Action to combat dramatic climate change will require major societal transformation. In other words, we have an all-out battle on our hands over how to organise society. Solutions to the climate crisis do exist. We have most of what is required in terms of technology, knowledge, and competence to avert a climate disaster. It is the power to translate words into action that will pose the greatest challenge.

Since economic growth and ruthless exploitation of natural resources are embedded parts of a capitalist economy–indeed, any capitalism without growth is a capitalism in crisis-–a narrow focus on individual issues of environmental policy will not suffice. Nor will we be able to combat the climate crisis by making individual choices. A system critical approach is needed. We need democratic control of the economy. This means that we are not only faced with a threat, but also an opportunity-–an opportunity, not just to prevent a climate catastrophe, but also to fight the economic and social crises which are currently eroding and threatening the living conditions of millions upon millions of people. In particular, this also provides us with a foundation upon which to build extensive social alliances in search of a different kind of society.

Read the report (PDF).

Sharing the challenges and opportunities of a clean energy economy: Policy discussion paper A Just Transition for coal-fired electricity sector workers and communities

By staff - Australian Council of Trade Unions - November 2016

The ACTU is primarily concerned with workers, their rights, their welfare and their future. A just and civil society is one where everyone shares in the wealth of the nation but it is also one where economic costs are equally shared.

Transitioning an industry is a massive economic and social disruption. History shows that this has often been done poorly in Australia, with workers and communities bearing the brunt of such transitions - suffering hardship, unemployment and generations of economic and social depression.

Research in the textiles, clothing and footwear (TCF) and car manufacturing industries shows, for example, that only one third of workers find equivalent full time work following their retrenchment, while one third move into lower quality jobs (lower wage, lower job status or into part-time and casual work) and one third are locked out of the labour force altogether.

International experience however shows that a transition can be done equitably, achieve positive outcomes for workers, save communities and forge new areas of industrial growth and prosperity.

Australia is currently facing one such transition in the coal-fired electricity sector. If Australia manages this transition well, the nation would have a structured and equitable approach that could apply to any industry undergoing similar change in the future.

At last year’s Paris climate conference, Australia alongside 194 countries, committed to limit global warming to less than 2°C above pre-industrial levels. As part of this historic agreement, unions successfully achieved recognition of the need for a ‘Just Transition’ that supports the most affected workers obtain new decent and secure jobs in a clean energy economy.

While Australia’s international obligations will require a range of complementary policies that focus on emission reduction across a number of sectors of the economy, as the largest contributor to Australia’s emissions, effective reform of the electricity sector has been identified as a key step in tackling climate change.

Download (PDF).

An Energy Revolution is possible: Tax havens and financing climate action

By Patrick Hearps and Sam Cossar-Gilbert - Friends of the Earth, September 2016

This report is the technical report that supports Friend of the Earth International’s summary report with recommendations and general analysis, also entitled ‘An energy revolution is possible’.

The aim of this analysis is purely to calculate an investment cost of providing several regions of the developing world with 100% renewable electricity, and to compare those amounts with government revenue lost through tax havens globally, in order to highlight the need for economic and climate justice.

Read the report (PDF).

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