Why Australia needs a Just Transition

I’ll start today with a frank admission.

I’m a recent convert to the Just Transition cause. It’s not a term that I’ve enjoyed using in the past.

I haven’t been a fan of the term “green jobs” either.

Let me explain, and start first with the language of green jobs

Workers in Australia have spent decades being restructured. It may be inevitable, but they haven’t been happy about it. Especially about the way it’s been done – generally without justice or fair burden sharing.

When a lot of our members hear the term green jobs, they feel two things:

-    Firstly, that the jobs they currently have must be seen as “brown” and “dirty”
-    Secondly, that they are going to have to shift jobs – yet again, and again with no guarantee and possibly no likelihood of secure well-paid employment

Green jobs is a mantra that may work well with people in an office environment, or with those yet to enter the workforce. It does not resonate well with people working in tough industries seeking some stability in their life and to put food on the table and their kids through school without constant worry about their next pay packet.

Working people usually don’t want a new green job. They want their existing job made greener. They want jobs that are sustainable, that they can be proud of, that they think are contributing to a better world for themselves and their community.

So, all jobs should be green jobs, from garbage collecting and steel-making through to retail, restaurants and banking.

I even think there WAS a prospect for making coal power jobs green jobs, and I’ll come back to that.

Now to Just Transition.

It was actually a term coined by the former Oil, Chemical and Atomic Workers union in North America, which is now part of the United Steel Workers. Who are great brothers and sisters of the CFMEU with whom we work closely.

It has now entered the language of the UN Climate negotiations, and not without an awful lot of effort by trade unions and civil society.

My beef with Just Transition has been twofold.

Firstly, the way it is used is to assume that industries must be closed. That certain industries and certain jobs are incompatible with sustainable development and with preventing global warming.

Now I could probably agree that a lot of jobs in investment banking and financial services are incompatible with sustainable development! But I see a lot of the banking sector dressing itself up in green cloth, or perhaps I should say greenwash, with their embrace of the UN Global Compact, the UN Principles for Responsible Investment and various voluntary initiatives.

I think Just Transition should mean the cleaning up of existing industries every bit as much as it may mean that some industries are phasing out and the workers and communities affected need to be looked after.

The other problem with Just Transition is that it risks becoming the convenient catch-all term that gets tacked onto anyone’s aggressive restructuring plan for any industry.

You can call for major firms to be shut down, for regions to have their main industry and employment shut down, for market instruments that destroy lives to be deployed, or for regulation that decrees the crushing of a way of life and people’s future alongside abolishing an undesirable industry.

And then you tack Just Transition on the end and it all becomes OK.

Just Transition risks becoming the universal panacea that any do-gooder tacks on the end of their program. That shows their heart is in the right place and absolves them of being responsible for the consequences of their actions.

That’s not good enough. Nowhere near good enough.

The CFMEU is not going to be sweet-talked into giving up the jobs of our members and the future of the communities in which they live in exchange for some well-meaning statements of principle.

You may be aware that the CFMEU has a bit of a reputation for being a tough organising and campaigning union  

We’re proud of that. Whether it is fighting sham contracting in construction, OHS deregulation and the return of black lung in coal mining, or for protection against foreign dumping in forest products, the CFMEU will be there protecting Australians from those who are out to make a quick buck at the expense of ordinary working people.

So when it comes to Just Transition, I say that we have to give content to what is otherwise only a slogan.

This conference is part of that effort. I thank the ACTU for organising this event. And I thank other unions for their contribution and for being here.

I thank the civil society organisations that are here and speaking today. And the businesses, peak groups and public policy-makers that are here to learn about what can be done.

Carbon Capture and Storage

I need to say something about Carbon Capture and Storage. Not least because it is, or was, a way for the coal power sector to clean up its act on emissions. And because there are quite a few power station workers, including some here today, who think it should be part of the way forward for the industry.

They are not Robinson Crusoe on this. The International Energy Agency still sees a substantial role for CCS, as does the Intergovernmental Panel on Climate Change. The IPCC’s latest major assessment says that a number of its models can’t achieve the goal of keeping global warming to 2 degrees or less without using CCS.

I was a big believer in CCS for the power industry. For a decade or so between about 2002 and 2012 I was a believer that industry and governments were willing to clean up the coal power industry, and the coal industry more broadly, by investing in the technologies that could cut carbon emission from the use of coal by 90%.

Not an efficiency improvement but a massive step change.

These technologies exist right now. There is a CCS power station in Canada right now. There are thousands of kilometres of carbon dioxide pipelines in the USA. From the North Sea to Africa and the USA there is already experience in injecting carbon dioxide into deep storage reservoirs. The Gorgon LNG project here in Australia will be storing millions of tones of CO2 underground.

But what I have not seen is the sort of investment we have seen in renewable energy technologies to make CCS in power generation large scale and commercially competitive.

CCS needs the power stations, and the pipelines, and the storage sites. In some ways it was like the entire coal power or oil supply system in reverse.

It seems to me that both industry and governments have been unwilling to engage in the major infrastructure planning and investment program that was required. Across the world.

Here in Australia Kevin Rudd as PM announced a $2.4 billion CCS flagships program. But each year after that the money was whittled back and put beyond the forward estimates. And the Coalition has basically wrapped up the rump of it altogether.

At the same time, the coal industry with its billion dollar Coal21 and then ACALET program failed to both raise the money from its members and failed to spend it. Last I heard the fund had been turned into a coal promotion program!

This means the prospects for CCS have faded. The economics of renewables have improved enormously, even though they are yet to provide reliable base load without hugely expensive battery technology. But the economics of CCS have not improved anywhere near enough, and there is not enough investment occurring that will change that.

Which is a massive shame in so many ways.

Firstly it condemns coal-fired power and the communities that host it to a bleak future.

Secondly, it shifts the burden of developing CCS to the heavy industry sector, which is still gong to need CCS if we are to have a steel industry, a concrete industry or many other processing industries.

Finally, it limits the prospects for CCS to contribute to negative emissions – using CCS to pull carbon back out of the atmosphere and put it underground.

Groups like The Climate Institute who are here today see some of the task of dealing with the likely overshoot of global emissions being dealt with by using things like bio-energy with CCS.

All these prospects are being reduced by the lack of progress in CCS for power generation.

CCS in power generation would have meant a transition that kept the industry.

Particularly for the Latrobe Valley, a relatively short pipeline out to the offshore Gippsland basin and the depleted oil and gas reservoir there would have been a lifeline not only for coal power but for other industries that could process brown coal into other products.

I struggle to see that happening now. We have Hazelwood closing, Yallourn next on the list, Loy Yang B up for sale and Loy Yang A with a closure date already slapped on it.

What does Just Transition mean for the Latrobe Valley?

So let’s look at what Just Transition should mean for the Latrobe Valley.

In the last week we have seen a flurry of announcements from the Federal Government and from the Victorian Government.

In total something like $85 million in programs were announced, plus Victoria has some kind of special economic zone promised for the Valley that could be worth quarter of a billion.

Now don’t get me wrong here. It’s good that something is being done. And it’s good that Engie is honouring all the workers’ entitlements (and good, I might say, that the CFMEU bargained for those entitlements!).

With out these announcements the future would be very bleak indeed.

But none of this amounts to Just Transition. At best it seems to be a repeat of what we have seen in the past when major structural adjustment happens.

It becomes apparent over many years that major change will happen. Perhaps a public servant or two is allocated to draw up a face-saving package for government but there is no public announcement.

When the announcement by a major firm comes, the government is ready to face the media with something to mitigate the consequences.

If there is a union involved, and it has already done a lot of jumping up and down, or has a reputation for doing so, then the something package may be bigger.

So what is happening now in the Latrobe Valley is what we have seen before. It’s what has happened in the textile, clothing and footwear sector, it’s what has happened in forestry too many times to count. It’s what is happening in the car industry and what is happening in the aluminium industry.

What happens to working people and their communities is seen through the prism of managing negative publicity. If it’s a little better than that, it’s seen as a band aid exercise to patch up the wounded and send them on their way.

What we don’t see is a long term, comprehensive and integrated program that puts the interests of those that are going to be hurt alongside and with equal priority to managing the central policy issue.

Here in Australia, and across the world, we must transform our electricity industry to become zero or near zero emission. It won’t solve the global warming problem by itself, but it is a major component.

We know this needs to be done over decades. We have 2030 targets and are likely to have 2050 targets and more in-between.

We know that most or all coal-fired power stations are going to close and will not be rebuilt.

We know where they are, who the workers are, and we have a pretty damn good idea of the likely adverse consequences for particular regions and communities.

So we should be able to plan for this. Why aren’t we?

There are a lot of components to a genuine Just Transition, and the CFMEU doesn’t know them all. But one thing I will push here today, which seems so obvious but which seems so unachievable.

Hazelwood is about to neck about 500 workers. About 250 may keep some ongoing role in the site rehabilitation.

Some of those workers are near retirement, can take the redundancy package and will retire into the local community. But many others are younger. The skilled jobs for them don’t exist elsewhere in the Latrobe valley. They will be forced to relocate or to join the high levels of unemployed already in the region.

But at other power stations nearby there are older workers who are also near retirement. They might be willing to go if they are offered voluntary redundancy and would make way for younger workers to be redeployed from Hazelwood.

This pooled redundancy and redeployment scheme is a central part of the ACTU document released this week.

It’s not utopian. It something of which there is already real-world experience.

It’s what we have seen in Germany in the phase-down of their black coal industry. Germany has done a lot of restructuring of its power industry and heavy industry over recent decades. But guess what? They have always prioritised social impacts.

They have something called social dialogue over there – joint work between government and other major stakeholders – that doesn’t seem to make it into the lexicon here.

In Germany they rotated younger workers among remaining coal mines while older people took early retirement. Once the pool of remaining mines got small, they looked for jobs in other industries. Which other firms provided as part of their commitment to a fair go in Germany.

But over here we get told it is impossible. That pooled redundancy and redeployment is impossible, that finding skilled workers jobs in other industries is impossible.

It’s like we have this commitment to ritualised blood-letting – that workers have to be made to suffer to ensure the proper functioning of the market.

The hard heads say it is going to cost too much.

We don’t have a costing for a genuine Just Transition in power but I reckon we are talking about some billions over two or more decades. That’s something, but not a lot when you look at the various modeling exercises for rebuilding the power sector with low emission technologies. These models routinely spit out costings of hundreds of billions. Again over a few decades, and within the context of a national economy that continues to grow and can afford it.

I think a pooled redundancy and redeployment program just for Hazelwood might add up to tens of millions as the cost of funding many extra voluntary redundancies across the nearby power stations.

But put that in the context of the hundred of millions for cleaning up the Hazelwood site, and the economic cost of job losses multiplying across the Latrobe valley.

In my view it’s a no-brainer. It’s not a cost issue but a mind-set about private sector operators not being able to look beyond their short term competitive market interests.

I think we need to start changing that here and now. Transforming our power industry is not just about individual businesses and power users making individual decisions. In saying we have to have climate policy and we have to fight global warming we are taking a position that there are over-arching reasons to take bold actions across industries and communities.

Just Transition is about making people matter in that process. Not an afterthought, and not massaged into acceptance with vague statements about green jobs.

Plenty of people in this room, and elsewhere in government and industry, are drawing up big plans for how the power industry should look and how we get there.

Just Transition is about making sure there is a future for the people that are hit by those plans. That they share in the costs and benefits of making the change, but are not saddled with costs and sacrifices far beyond what others are making.

That’s the challenge here today, and every day of every year until we have a global warming under control.

Who knows - maybe if we learn how to do climate policy as if people mattered, we might be able to use the wisdom gained for other industry restructuring!