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deindustrialization

For a Fair and Effective Industrial Climate Transition: Support measures for heavy industry in Belgium, the Netherlands and Germany

By Yelter Bollen, Tycho Van Hauwaert, and Olivier Beys - European Trade Union Institute, August 2021

Europe’s industrial base needs to undergo a swift and persistent transformation towards carbon neutrality and circularity, but this transition must happen in a fair and socially just manner. In this working paper, we evaluate the support mechanisms for heavy industry which have been put in place over the past 20 years, comparing the state of play in the Netherlands, Germany and Belgium.

We also compare recent developments in the industrial policy frameworks of these countries, considering European as well as domestic policy levers. We conclude that policy frameworks have largely been ‘defensive’, have lacked foresight, and have had negative distributional effects. Recent shifts in policy have opened up avenues for progress, but the level of ambition remains insufficient and uneven. Major economic incentives and support measures should cohere with a just transition, at the (sub-)national as well as the EU level.

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The Shadow of the Mine: Coal and the End of Industrial Britain

By Laura Pidcock - Red Pepper, July 6, 2021

Imagine the mixture of pride and elation at getting a letter from the Durham Miners’ Association, asking you to speak at the annual Durham Miners’ Gala – the ‘Big Meeting’ I have been coming to year after year. Imagine getting up onto the huge stage and looking out over a sea of people, outlining the vision for working people under a socialist prime minister.

The Durham Miners’ Gala is where socialists go to politically replenish the soul for the fight ahead. It is simply the most electrifying experience in the British labour movement, steeped in working-class culture, tradition and, of course, struggle. The speech I delivered in July 2019 was partly about our confident preparations for government, and the changes a brand-new Ministry of Labour (that I would be heading) would bring. But it was also a message to activists to persevere under sustained attack. Just five months later, I found myself shaking the hand of the Tory MP, who had just taken my North West Durham seat by 1,144 votes.

In some ways, The Shadow of the Mine: Coal and the End of Industrial Britain, by Huw Beynon and Ray Hudson, is a story about that defeat, and many others Labour suffered in the 2019 election. But it is also about the long history, a serious piece of writing that assesses the political, cultural and social ramifications of deindustrialisation in South Wales and County Durham.

Both the 2016 European referendum and the 2019 Tory landslide are commonly analysed over too short a period of time to understand the real shifts in politics and community. Some constituencies elected their firstever Conservative MPs. These events seem like ‘shocks’. Beynon and Hudson’s book takes a longer view, which is both refreshing and necessary if we are to escape the stranglehold the right has on discourse and opinion.

It explains in loving, careful detail why working people’s relationship with Labour in former industrial communities – where ordinarily they would have had strong class identification with the party – had become complex and ultimately soured. South Wales and Durham are used as case studies to examine that dislocation, and what emerges is a rich, social history.

How laid-off coal miners are reclaiming their own economy

By Trevor Decker Cohen - Sharable, June 28, 2021

For generations, hundreds of thousands of West Virginia coal miners earned a good living. The money they made supported local economies in towns across Appalachia. And their labor down in deep mines brought light to the rest of the world.

But this prosperity came at a high price. Mountains were blown to pieces, rivers ran orange with mine tailings, and generations of miners suffered from black-lung disease. For over a century, the coal industry dominated the region’s economy and psyche, preventing much else from taking root. Now, it’s crumbling. Three of the four largest coal companies that mine half the coal in the US have gone bankrupt. There’s a gaping hole in parts of Appalachia where an economy used to be.

The transition away from extractive energy, dependent on a few commodities, is not as simple as retraining miners. “You can have training programs until you’re purple, but if you don’t have a place to work, it’s just kind of mean,” said Marilyn Wrenn, the development director at Coalfield Development. “It’s not like you can move out of coal mining and go work for the big data firm that opened up down the street.” Recovery from the legacy of coal’s decline requires a thorough regeneration of local economies from the ground up.

On one abandoned surface mine, a new story has emerged. A tractor dragged a piece of machinery, scraping its way along the scattered remains of a former mountain. A crew member pushed the accelerator, and a stone crusher chewed through the rubble. “It’s eating these rocks and turning it into garden soil—and it’s awesome,” said Eva Jones, who drove the tractor.

The machine was capable of crushing stones up to 16 inches in diameter, and in one day, could make up to three acres of soil. In the new dirt, another crew planted an orchard. It was a mix of blackberries, hazelnuts, lavender, and pawpaws. Sustainably managed chickens, hogs, goats, and honeybees grazed and pollinated the half-farm, half-forest. Over time, these practices will capture carbon in the soil and generate income for the local West Virginians who farm the former minelands.

These efforts were the work of two enterprises founded by nonprofit Coalfield Development—an organization that seeks to restore economic diversity in a region long beholden to the wealth of just one commodity. “Whether you think coal is a good thing or a bad thing, it’s not wise to have all your eggs in one basket,” said Coalfield’s founder, Brandon Dennison.

Fighting for Coal Country

By Staff - United Mine Workers of America, June 1, 2021

Clearly, the UMWA's positions on carbon capture and storage (CCS) and so-called "clean coal" stand in contrast (and, for the most part, opposition) with the entirety of the climate justice movement, ecosocialists, green syndicalists, and a good deal of rank-and-file union members not involved in resource extraction (including the more than 60-70% who support something like the Green New Deal). That said, at least the UMWA finally accepts that coal is a dying industry and a just transition is needed. Therefore, this is presented to show where the UMWA stands, not as an endorsement of their positions.

At the end of 2011, there were nearly 92,000 people working in the American coal industry, the most since 1997. Coal production in the United State topped a billion tons for the 21st consecutive year. Both thermal and metallurgical coal were selling at premium prices and companies were making large profits.

Then the bottom fell out. Over the next 4 years, coal prices cratered, especially in metallurgical coal but also in thermal coal. The global economy slowed, putting pressure on steelmaking and metallurgical coal production. Foreign competition from China, Australia, India and elsewhere cut into met coal production.

Domestically, hydraulic fracturing (fracking) of shale formations opened up previously untapped natural gas fields, caused the price of gas to drop below that of coal for the first time in years. Utilities began switching the fuel they used to generate electricity from coal to gas. Environmental regulations coming from the Obama administration also impacted coal employment. By 2016, just 51,800 people were working in the coal industry. 41,000 jobs had been lost.

Companies went bankrupt. Retirees’ hard-won retiree health care and pensions were threatened. Active miners saw their contracts, including provisions that had been negotiated over decades, thrown out by federal bankruptcy courts. From 2012 to today, more than 60 coal companies have filed for either Chapter 11 reorganization bankruptcy or Chapter 7 liquidation. Almost no company has been immune.

“Just since 2015 we have had companies like Peabody, Arch, Alpha Natural Resources, Walter Energy, Westmoreland and Murray Energy all go bankrupt,” President Roberts said. “Patriot Coal went bankrupt twice. Retirees’ health care was on the brink, but we were successful in preserving that in 2017. The 1974 Pension Fund was on the path to insolvency, but we were able to save that in 2019.

“Even though our contracts were thrown out by bankruptcy judges at company after company, we were successful in preserving union recognition, our members’ jobs and reasonable levels of pay and benefits at every company as they emerged from bankruptcy,” Roberts said. “But in no case has the contract that came out of bankruptcy been the same as the one our members enjoyed when a company went into bankruptcy. This has been extremely painful all the way around.”

Jobs and equitable transition: Bridging the chasm between rhetoric and action

By Sean O'Leary - Ohio River Valley Institute, May 26, 2021

There was a time when the sight of rows of office workers hammering away at their Friden adding machines would have sent me into paroxysms of delight because I, the Victor Comptometer salesman, had a new and better “programmable calculator” that could kick the Friden’s ass.

I was a young 1970s college graduate entering the workforce at the tail end of the era of mechanical business automation. Typewriters, adding machines, and mechanical cash registers were still the workhorses of stores and offices.

Behind all that machinery were companies – Burroughs, Monroe, Friden, Victor – whose names were as familiar then as Cisco, Oracle, and SAP are today. And those companies supported factories, sales offices, and repair facilities that provided living wage jobs to hundreds of thousands of workers and their families.

Then, within a little more than a decade, it was all gone. A year after I fizzled as a Victor salesman, I was playing at home with my new Radio Shack TRS-80 home computer and five years later, instead of an adding machine and typewriter on my desk at work, there sat an Apple II desktop computer, precursor to the Mac.

Gone too were those hundreds of thousands of jobs plunging not only workers and families, but entire communities, into financial crisis. One could argue that Dayton, Ohio, once home to National Cash Register and the business forms giant, Standard Register, never recovered.

The knock-out blow suffered by the office automation industry was as ferocious and sudden as the one that hit the American steel industry a few years earlier, the textile industry a few decades before that, and also as the one that possibly faces workers in the fossil fuel economy today.

So how did we as a society help displaced workers and communities manage the economic consequences of the transition from the mechanical workplace to a digital one? We didn’t. Thanks to the New Deal, we had unemployment insurance and Medicare and Medicaid were brand spanking new. But that was about it – a little help for individuals and families and none whatsoever for communities.

“Just” Transitions Are Possible, But They Require State Investment

By Leanna First-Arai - Truthout, March 17, 2021

In spite of overt efforts by some energy executives to convince consumers otherwise, the global economy is already in the throes of a transition away from the drilling, refining and burning of fossil fuels. For certain communities — such as the estimated one-quarter of counties in the U.S. with the greatest potential for wind and solar that are existing fossil fuel employment hubs — a reasonably smooth economic transition to a fossil-free economy may be well within reach.

But for many workers, the idea that an “energy transition” is upon us still sounds the alarm. The “zero emissions” of climate policy proposals bring with it the electrification of everything: ditching combustion engines for electric ones in cars, trucks and busses; and equipping houses with heat pumps to replace natural gas furnaces, for instance. And while an aggressive commitment to electrifying all aspects of the economy could create an estimated 25 million jobs in the U.S. by some estimates, it’s a process often understood as “automation,” the repercussions of which those working in industry are no stranger. In the past, automation in workplaces from oil rigs to rubber plants has meant layoffs, school and municipal budget deficits, and in many cases, the devastation of entire towns.

A new report released today by the Labor Network for Sustainability (LNS) details how working people in the United States have been abandoned by their employers and their elected officials during countless prior economic transitions, and suggests that failing to learn from past catastrophes in the shift away from fossil fuels could lead to significant further social unrest.

“We have rarely done a good job of supporting workers and their communities through these transitions,” Michael Leon Guerrero, executive director of LNS, said in a statement. “If we are to move forward on the climate policies we need — we have to assure to the greatest extent possible that workers and their communities will not get left hanging.”

The report, called the Just Transition Listening Project, draws on qualitative data from 100 “listening sessions” with union and non-union manufacturing and industrial workers, including those in the fossil fuel industry, but also public sector workers, educators and other community members living in areas that have already experienced or anticipate some form of economic transition, like a factory sent overseas or the decommissioning of a power plant.

The research is the most comprehensive to date to gauge U.S. labor and community sentiment around the current energy transition, and offers labor, activist and broader community perspectives on how hyper-local challenges and community-envisioned solutions might be balanced with and supported by federal funds and a big picture policy blueprint.

In addition to labor groups, participants include members of environmental justice and other community organizations and span the U.S. geographically, though the West Coast is slightly overrepresented and the South underrepresented. Across each of these groups, 63 percent of participants identified as white, 19 percent as Latinx, 10 percent as Black and 5 percent as Indigenous. The co-authors identify the underrepresentation of Black participants as a “major weakness” in their data and encourage more research centering the experiences of Black workers and communities.

At its core, the report recognizes that current conversations about our energy transition are still rife with misconceptions. “The idea of the working class that we conjure up is the big burly white guy with a hard hat on who’s whistling at you when you’re 25,” one participant told the researchers. But the identities and commitments of those impacted by the transition from fossil fuels to renewables are much more complex. “To have a just transition in this country, to have it after we come out of the pandemic, to have it when we get off of fossil fuels, people who do all that work, caring for children, teaching children, caring for sick people, delivering food” — many who are women of color, the same participant noted — “those people need to be paid a living wage.”

To bring about a truly “just transition,” the report suggests, policy makers must consider innovating in ways that reach far beyond offering a 60-year-old refinery worker a spot in a coding bootcamp when his most pressing concern might be doing whatever it takes to stay on the job so he can keep his health insurance, for instance.

On the contrary, our responses must consider immediate and long-term needs, be holistic, ambitious and participatory.

Fracking boom brings job and income loss to Appalachian communities

By Elizabeth Perry - Work and Climate Change Report, February 23, 2021

A February study examined the economic changes in 22 counties the authors call “Frackalachia” – home to the Utica and Marcellus shale gas industry. The report, Appalachia’s Natural Gas Counties: Contributing more to the U.S. economy and Getting less in return examines the period from 2008 to 2019, a time when the area went from producing a negligible portion of U.S. natural gas to producing 40%. The report summarizes the job forecasts provided by oil and gas industry economic impact studies, (over 450,000 new jobs for Ohio, Pennsylvania, and West Virginia), and shows the actual economic data from the U.S. Bureau of Economic Analysis – a 1.6% increase in jobs – at a time when the number of jobs across the U.S. grew by 9.9%. Detailed statistics demonstrate the differences amongst counties and states – with Ohio faring the worst and Pennsylvania faring the best. The report’s analysis shows that in the entire area represented by the 22 counties, the share of the national personal income fell by 6.3 percent, the share of jobs fell by 7.5 percent, and the share of the national population fell by 9.7 percent , while 90% of the wealth generated from fracking left the local communities.

The report was produced and published on February 10 by the Ohio River Valley Institute, a non-profit think tank based in Pennsylvania, founded in 2020 with the vision of “moving beyond an extractive economy toward shared prosperity, lasting job growth, clean energy, and civic engagement.” This report has been widely reported, including in “Appalachia’s fracking boom has done little for local economies: Study”(Environmental Health News , Feb. 12), which summarizes the report and adds context concerning the health effects of fracking, and the failed attempts to expand production to petrochemicals and plastics using ethane, a by-product of the fracked natural gas.

Appalachia's Natural Gas Counties: Contributing more to the U.S. economy and getting less in return

By Sean O'Leary - Ohio River Valley Institute, February 12, 2021

Economists debate whether there is such a thing as a “resource curse”.

Between 2008 and 2019, twenty-two old industrial and rural counties in Ohio, Pennsylvania, and West Virginia, which make up the Appalachian natural gas region, increased their contribution to US gross domestic product (GDP) by more than one-third. In 2008, the 22 counties were responsible for $2.46 of every $1,000 of national output. By 2019, the figure had climbed to $3.33. Their rate of GDP growth more than tripled that of the nation. However, during the same period, measures of local economic prosperity—the economic impacts of that growth—not only failed to keep pace with the increased share of output, they actually declined.

  • The 22 counties’ share of the nation’s personal income fell by 6.3%, from $2.62 for every $1,000 to just $2.46.
  • Their share of jobs fell by 7.6%, from 2.62 in every 1,000 to 2.46.
  • Their share of the nation’s population fell by 10.9%, from 3.26 for every 1,000 Americans to 2.9 for every thousand.

It is a case of economic growth without prosperity, the defining characteristic of the resource curse.

Most of the GDP increase in this group of counties was due to the Appalachian natural gas production boom, which was facilitated by the advent of a drilling technique called hydraulic fracturing, or “fracking” for short.

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Appalachian Fracking Boom Was a Jobs Bust, Finds New Report

By Nick Cunningham - DeSmog, February 11, 2021

The decade-long fracking boom in Appalachia has not led to significant job growth, and despite the region’s extraordinary levels of natural gas production, the industry’s promise of prosperity has “turned into almost nothing,” according to a new report. 

The fracking boom has received broad support from politicians across the aisle in Appalachia due to dreams of enormous job creation, but a report released on February 10 from Pennsylvania-based economic and sustainability think tank, the Ohio River Valley Institute (ORVI), sheds new light on the reality of this hype.

The report looked at how 22 counties across West Virginia, Pennsylvania, and Ohio — accounting for 90 percent of the region’s natural gas production — fared during the fracking boom. It found that counties that saw the most drilling ended up with weaker job growth and declining populations compared to other parts of Appalachia and the nation as a whole.

Shale gas production from Appalachia exploded from minimal levels a little over a decade ago, to more than 32 billion cubic feet per day (Bcf/d) in 2019, or roughly 40 percent of the nation’s total output. During this time, between 2008 and 2019, GDP across these 22 counties grew three times faster than that of the nation as a whole. However, based on a variety of metrics for actual economic prosperity — such as job growth, population growth, and the region’s share of national income — the region fell further behind than the rest of the country. 

Between 2008 and 2019, the number of jobs across the U.S. expanded by 10 percent, according to the ORVI report, but in Ohio, Pennsylvania, and West Virginia, job growth only grew by 4 percent. More glaringly, the 22 gas-producing counties in those three states — ground-zero for the drilling boom — only experienced 1.7 percent job growth.

“What’s really disturbing is that these disappointing results came about at a time when the region’s natural gas industry was operating at full capacity. So it’s hard to imagine a scenario in which the results would be better,” said Sean O’Leary, the report’s author.

The report cited Belmont County, Ohio, as a particularly shocking case. Belmont County has received more than a third of all natural gas investment in the state, and accounts for more than a third of the state’s gas production. The industry also accounts for about 60 percent of the county’s economy. Because of the boom, the county’s GDP grew five times faster than the national rate. And yet, the county saw a 7 percent decline in jobs and a 2 percent decline in population over the past decade.

“This report documents that many Marcellus and Utica region fracking gas counties typically have lost both population and jobs from 2008 to 2019,” said John Hanger, former Pennsylvania secretary of Environmental Protection, commenting on the report. “This report explodes in a fireball of numbers the claims that the gas industry would bring prosperity to Pennsylvania, Ohio, or West Virginia. These are stubborn facts that indicate gas drilling has done the opposite in most of the top drilling counties.”

A Boom Without Job Growth

This lack of job growth was not what the industry promised. A 2010 study from the American Petroleum Institute predicted that Pennsylvania would see more than 211,000 jobs created by 2020 due to the fracking boom, while West Virginia would see an additional 43,000 jobs. Studies like these were widely cited by politicians as proof that the fracking boom was an economic imperative and must be supported.

But the Ohio River Valley Institute report reveals the disconnect between a drilling boom and rising GDP on the one hand, and worse local employment outcomes on the other. There are likely many reasons for this disconnect related to the long list of negative externalities associated with fracking: The boom-and-bust nature of extractive industries creates risks for other business sectors, such as extreme economic volatility, deterring new businesses or expansions of existing ones; meanwhile air, water, and noise pollution negatively impact the health and environment of residents living nearby.

“There can be no mistake that the closer people live to shale gas development, the higher their risk for poor health outcomes,” Alison Steele, Executive Director of the Southwest Pennsylvania Environmental Health Project, told DeSmog. “More than two dozen peer-reviewed epidemiological studies show a correlation between living near shale gas development and a host of health issues, such as worsening asthmas, heart failure hospitalizations, premature births, and babies born with low birth weights and birth defects.”

Moreover, oil and gas drilling is capital-intensive, not job-intensive. As the example of Belmont County shows, only about 12 percent of income generated by the gas industry can be attributable to wages and employment, while in other sectors, on average, more than half of income goes to workers.

In other words, it costs a lot of money to drill, but it doesn’t employ a lot of people, and much of the income is siphoned off to shareholders. To top it off, equipment and people are imported from outside the region — many of the jobs created went to workers brought in from places such as Texas and Oklahoma.

Despite the huge increase in shale gas production over the past decade, the vast majority of the 22 counties experiencing the drilling boom also experienced “economic stagnation or outright decline and depopulation,” the report said.

The American Petroleum Institute did not respond to a request for comment.

“[W]e could see long ago that the job numbers published and pushed out by the industry years ago were based in bluster, not our economic realities,” Veronica Coptis, Executive Director of Coalfield Justice, a non-profit based in southwest Pennsylvania, told DeSmog, commenting on the report. “At industry’s behest and encouragement, Pennsylvania promoted shale gas development aggressively in rural areas for more than a decade. And yet, the southwestern counties at the epicenter of fracking do not show any obvious improvement in well-being.”

Just Transitions, Power and Politics

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