[Editorial note: A reminder that we are publishing on a monthly basis during the U.S. summer months, returning to our regular schedule in September]

Leading Off: California Dreaming

California is seen as a model for addressing climate change, not just in the U.S. but throughout the planet; after all, California would be the world’s fifth largest economy if it was a country unto itself.  Indeed, a number of states in the U.S. are following California’s example and passing laws phasing out the sale of gas-powered cars by, in most cases, 2035.

Which leads to the obvious question: what happens to the entire gamut of workers in this transition—refinery, extraction workers, supply chain workers (especially those who have some link to auto assembly work), skilled trades workers who handle large-scale maintenance jobs, and gas station workers?

The answer: if California is the model, the picture for Just Transition is, at best, still murky.

We took some time to read the state’s Zero-Emission Vehicle (ZEV) Market Development Strategy, which is an anchor document for the plans for other state agencies. The high-minded rhetoric is all there:

“…the Strategy is centered around the four market pillars: vehicles, infrastructure, end users, and workforce. The pillars must all be fully supported and are built upon a foundation of five core principles: equity in every decision, embracing all zero-emission pathways, collective problem-solving, public actions drive greater private investment, and designing for system resilience and adaptability. [the emphasis in bold is added]

And:

We will have met the challenge with a diverse team of stakeholders from multiple sectors and priority communities1 who came together to solve problems, create opportunities, and increase equity. And we will meet the challenge through prioritizing the following decision-making principles: equity in every decision, embracing all zero-emission pathways, collective problem solving, public actions drive greater private investment, and designing for system resilience and adaptation.

As such, the purpose behind this ZEV Strategy is to empower stakeholders to work toward generating maximum positive impact on the market. The idea is to set a strong course with the understanding and expectation that conditions are likely to change, often for the better. We firmly know where we need to go, yet we are flexible in how we get there. In a word, the California ZEV Strategy hinges on one of California’s most important assets: people.

The document also singles out workforce as one of the four pillars of the strategy:

Workforce: The human workforce, including supply chains, needed to design, manufacture, sell, construct and install, service and maintain ZEVs, ZEV infrastructure, ZEV distribution systems, dealerships, energy systems, networks of charging and fueling stations, and other ZEV-related build. Workforce also includes those at third-party support companies and agencies whose work with ZEV focused institutions is critical to operating and expanding the ZEV market, such as marketing and advertising firms, roadside assistance companies, financial institutions,
insurance agencies, and recyclers.

The document also addresses “Complimentary” initiatives:

Economics and Workforce— Just transition. Per EO N-79-20, the Labor and Workforce Development Agency and Office of Planning and Research are working with a group of state agencies to design a Just Transition Roadmap, which is an economy-wide strategy to ensure that all Californians benefit from the transition to carbon neutrality, including communities and workers most impacted by climate change and the realignment of fossil fuel industries. The ZEV Strategy will leverage this work, and other related efforts, to ensure California is prepared to meet the needs of the ZEV market.

To quote Greta Thunberg: blah, blah, blah.

Because the document itself is very heavily weighted to the care-and-feeding of the electric vehicle industry, not the people who work, or will, work turning out the cars. It’s as much the tone as it is the substance—the substance carries very little when it comes to the outcomes for current workers who will be out of a job when the full transition occurs.

Indeed, last year, we noted a Displaced Oil and Gas Worker Pilot Program” emerging in California. Passed in 2022, it is a $40 million pilot program (reduced from $50 million in the original proposal), which is less than a drop in the bucket given the scale of the problem.

The program’s status? Almost two years later, the state’s Employment Development Department is only issuing the solicitation for the program…this month.

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Spotlight: Trade Rules & The Danger To Just Transition

Over the past year, there has been a lot of attention on the proposed Americas Partnership for Economic Prosperity (APEP), a trade agreement between the U.S. and Barbados, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Panama, Peru, and Uruguay. We thought it would be important to remind people of a view we took last year about trade rules and the potential danger so-called “free trade” agreements pose to Just Transition.

Here’s a reasonable argument to consider: the global trading regime, built over the past century through various so-called “free trade” agreements, has played a significant role in exacerbating the climate crisis by encouraging hyper-growth, lowering wage standards and reducing national environmental conditions.

Even if the above is debatable to some, it’s undeniable that there is a grave threat that the trading regime—overseen most prominently by the World Trade Organization—will undermine national governments abilities to press forward towards meeting net-zero targets and, to the subject we address here as our mission, scuttle even modest attempts at ensuring a worker- and community-centric Just Transition.

Consider: let’s say the global economic giant Freedonia doesn’t want to wait for its counterparts to get its act together to move ahead with concrete plans on Just Transition. So, Freedonia passes legislation that favors domestic manufacturing of electric vehicles, and related components. Country B, C and D stomp their feet, whine and complain, and rush to the WTO to file an unfair trade case against Freedonia, demanding that Freedonia remove any favoring terms for its domestic-based manufacturing and/or be sanctioned.

This isn’t just a hypothetical. Let’s turn to real life.

In the U.S., the Inflation Reduction Act is providing billions of dollars for, essentially, massive government engineering of domestic climate change industries—that’s a good thing. If the consensus is that this is a “war” to keep the planet livable, then, government intervention, across the globe, is vital.

You can find in the Inflation Reduction Act:

• Tax credits for electric vehicles to the tune of $4,000 tax for consumers to use to purchase used electric vehicles, and up to $7,500 for new electric vehicles made in the U.S. [Note: the stillborn first generation of the bill (then, called “Build Back Better”) provided additional tax breaks for vehicles assembled in unionized U.S. factories—a provision that did not make it into the Inflation Reduction Act.]
• A sizable $60 billion pot of money to ramp up clean energy manufacturing of solar panels, wind turbines, and other technologies in the U.S.
• Another pot of $27 billion for a new Greenhouse Gas Reduction Fund to advance the deployment of low-carbon technologies by handing out low-cost financing for clean energy infrastructure projects.

All of this is a significant step for the U.S. but still quite inadequate to the task at hand.

So, what has happened since the passage of the Inflation Reduction Act? A variety of countries and the European Union leadership have their knickers in a twist, and are throwing a fit. The common theme: the Inflation Reduction Act subsidies and, thus, the favoring of domestic manufacturing are direct violations of “free trade” laws.

The main points to keep in point throughout these disputes:

We take a neutral stance when it comes to national interest—our lens is simple: how does any proposal support workers in the process of Just Transition?

And this is the fundamental question: what is a country to do when there is no uniform international agreement on how to confront the economic upheavals due to de-carbonization and, certainly, no agreed-upon standard on a “high bar” Just Transition for workers?

As we point out in our Guiding Philosophy, Just Transition “should be transformative, not just reform the current economic system” and offer a chance to “reconsider the fundamental concepts of the planet’s economy.”

The so-called “free trade” regime is precisely the kind of concept that must be revisited. Current trade agreements should be rubbished, or severely renegotiated, in any instance where such a deal obstructs or attempts to nullify decarbonization steps taken by a country, or a coalition of governments.

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Ideas: Coalitions Are Key For Just Transition

In the past year, we’ve encouraged our partners and other allies to invest much more time in building powerful coalitions. It is inconceivable that workers, and their unions, will win a “high bar” Just Transition in the absence of a broad alliance. Such alliances are much talked about—and will be examined here regularly—but are still quite shaky, at best, in most places.

The key points in the path to building a coalition can be found here:

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Opinion: How Can A Just Transition Be Shaped Under The Current Conditions?

By Frederik Moch

[In October 2022, we published this opinion piece. As we reviewed recent events, we thought this was quite topical again]

Russia’s invasion of Ukraine is a setback for a Just Transition in Germany and Europe. High energy prices, shortages of essential goods, rising inflation and the soaring cost of living increase social inequality. Furthermore, job losses are at stake. Many companies are incapable of paying the increased production costs, especially those with a high energy consumption. At the same this means companies have less money to invest for greening their operations and production processes. Moreover, the German coal-fired power plants must run more intensively and are partially ramped up again due to the gas shortage.

Nonetheless, it is urgently needed to set the foundations for a Just Transition. This implies a different political approach towards greening the economy. The effects on jobs, distribution and regional economic structures must be considered just as much as the reduction of carbon emissions. Climate policy entails much more than environmental policies. Especially in the present time it becomes evident how much social and ecological aspects have to be seen together. The guiding principle of an ambitious climate policy should therefore be a Just Transition in which no one is left behind. For the trade unions there are five key aspects how to shape a Just Transition progressively under the current circumstances:

1. Government support for private households, companies, and jobs

The state must provide significant fiscal support to prevent a social disaster. Both private households and companies must be protected to avoid job losses and a rise in social inequality. An energy price cap is urgently needed.

2. Energy security and a boost for the renewables

A secure energy supply for private, commercial, and industrial consumer groups must be ensured as a central aspect of public services of general interest. A massive expansion of the renewable energies is the most important measure for minimizing Germany’s dependence on fossil fuels and achieving the climate targets.

3. Just Transition, just finance

For a successful transition massive investments are required. They are especially needed for climate-friendly infrastructures, innovative technologies, buildings, and mobility. Climate neutrality will not be achieved with today’s attitude toward debt breaks. In addition, the costs of the current crisis are enormous. The financing has to be socially just. High incomes, assets and inheritance need to be taxed more heavily. Capital must be more visible with respect to financing to ensure the burden is shared fairly during the transition. In addition, an excess profits tax makes sense to absorb the huge crisis-related profits of some companies.

4. A Just Transition framework is needed

Furthermore, a Just Transition has to be actively shaped by governments in cooperation with trade unions and employers. Leaving the transition to the market would increase the risk of social and environmental dumping. Instead, there has to be a political and sustainable framework to bring climate protection, decent work and sustainable prosperity together. Such a strategy has to anticipate and proactively balance social, economic and ecological effects.

5. Workers are key to the transition

Workers are at the very core of the transition. Due to their activities on the ground, they have intricate knowledge of the sectors in question as well as being a trusted partner in industrial relations and bargaining processes. Studies have shown that companies with co-determination are more sustainable and are doing more to avoid greenhouse gas emissions. Workers know their company best and have the power and knowledge for innovation. In addition, ongoing professional development as well as increased training and further education all empower workers. Works councils are key players in implementing climate protection on the ground. Co-determination and collective bargaining agreements ensure greater fairness in the company while also guaranteeing economic and social participation as well as security, especially in times of change. Therefore, decent work, binding collective agreements and co-determination must be strengthened to create an environment of trust and acceptance. This must apply to existing and new jobs and sectors.

What are the trade unions doing to contribute to a Just Transition? A lot! One outstanding example is the “Revierwende” project. It is a central contribution to ensuring worker participation and representation of their interests in the process of phasing out coal mining and coal-based energy production. The project will support workers, works councils, local unions, and employees through its regional offices in all remaining coal regions. With a staff of more than 20 colleagues, the Revierwende-Team is active where it counts: the home regions and workplaces of those affected by the coal phase out.

Moch is the Director of Structural Policy, Industry and Services for the German Confederation of Trade Unions (DGB) 

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Links

PETROL-İŞ (Petroleum, Chemical and Rubber Workers’ Union of Turkey): represents workers in the oil, chemical and rubber industries in Turkey