PERI’s Robert Pollin tells Paul Jay that a just transition for those who work in the fossil fuel sector is not only necessary, it’s possible

Story Transcript

PAUL JAY, TRNN: Welcome to the Real News Network. I’m Paul Jay in Baltimore. We must protect jobs. That’s the usual call to arms against those who say we must transition away from the use of fossil fuels in order to curtail runaway climate change. According to a report from the Solar Foundation, since 2014 solar installation has created more jobs in the U.S. than oil and gas pipeline construction and crude petroleum and national gas extraction combined. According to the International Renewable Energy Agency’s annual jobs review, renewable energy jobs increased by around 6 percent while employment in oil and natural gas extraction and support activities contracted by 18 percent. But what of those that work in the fossil fuel sector in communities such as those in West Virginia, where 47 percent of all jobs in recent years were in the region’s coal industry? Our next guest says we need a just transition for those who work in the sector, and it’s not only necessary, it’s possible. Joining us is Robert Pollin. He’s a Distinguished Professor of Economics and co-director of the Political Economy Research Institute, PERI, at the University of Massachusetts Amherst. He’s also authored several books, including Greening the Global Economy. Thanks for joining us, Bob. ROBERT POLLIN: Thanks for having me on, Paul. JAY: So, in your recent article published in the American Prospect, titled A Just Transition [for] the U.S. Fossil Fuel Industry Workers, you wrote: “A combination of better jobs and pensions will remove one political obstacle to a green transition.” Well, that seems to be sort of a no-brainer, in a sense. Now, President Obama has talked about a plan. But so far, those areas are clearly voting for people who deny there even is such a thing as climate change. There seems to be not much faith amongst workers in those areas that such a program is possible. What do you say to people working in West Virginia coal mines? POLLIN: Well, I think that they are entirely justified in looking at past experience and looking at where things are at present, and saying, you know what? We’re not going to be getting any kind of support, and we have to defend our livelihoods, and therefore we are not interested in hearing anything about climate change or regulating the coal industry. That said, what we try to do–and I’ve written this with a co-author, Brian Callaci, a former union researcher. What we find is that it’s really quite feasible to think about a realistic program that will cover all the workers who are going to face job losses. And it’s a simple logic to it. The simple logic is that if we talk about a 20-year transition with the coal industry cut by 60 percent over 20 years, coal production, a massive cut over 20 years, oil and gas cut 40 percent, what we show is that virtually all of the job cutbacks that will be required through this 20-year transition can be covered by attrition through retirement. That is, when people retire at age 65. There is about a small share of jobs that would not be covered naturally in retirement. But those can be covered by giving people just one additional year of full pay once they reach age 64-65. So that’s basically the structure, and what we find is that what we’re really looking at on an annual basis is something less than, you know, around 600 workers in coal, around 900 workers in oil and gas, per year that will be retiring and will need this coverage at the age of 64. Throw in all the support activities, and you can mainly, roughly, double the number of workers that would need to get full benefits and pay at age 64 to get them through to retirement. That’s the key idea in our article, and what it shows is that, you know, you’re talking about something on the order of $300 million per year with this level of coverage, which is eminently feasible. I mean, we’re talking about a just transition, an overall investment in green energy–. JAY: $300 million a year for how long? Over the 20-year period? POLLIN: $300 million a year for 20 years. JAY: And President Obama has opposed the plan for transition. It’s blocked in Congress. But how much did he propose, and how does that compare to what you’re suggesting? POLLIN: Well, he’s proposed about $1 billion. And it’s not, you know, it’s not covered over 20 years. It’s not clear what exactly it’s going to do with respect to covering retirement. People facing retrenchment prior to retirement. So you know, he’s talking about things like job training, which is useful, but in fact, job training programs and [like the trade] adjustment systems, which is the measure in place that applies to jobs lost through trade policy, but it’s a similar kind of policy measure, people know it doesn’t work. People in the union movement, you know, they call it burial insurance. It amounts to about $10,000 per year per worker for two years. And that’s a pittance when people are making $80,000 and they’re going to lose their jobs. But what we’re saying is that actually, if you make the other part of this, is therefore you have to make sure that their pensions are completely covered. That once people do hit 65 that they have their full pension that was promised to them. So that’s a second part of the just transition. And the third part is communities. Look, a lot of communities are, they’re not going to come back fully after they lose coal or after they lose oil. But you can develop programs–and there have been reasonably successful programs in this area of community reinvestment. And the green, investing in the green economy is the obvious place to start building up in the areas that are going to lose out due to the retrenchments in coal and oil and gas. JAY: Is that part of the $300 million? Or is that, that would be an additional public investment? POLLIN: Well, we estimate, if you’re talking about in the range of $300 million a year to cover workers who are going to lose their jobs at age 64 as opposed to 65, that’s $300 million. Then we say another $300 million basically to, per year, for covering pensions. to make sure that the pensions are fully funded, and for community reinvestment. So overall, the package is in the rage of $600 million a year. Now, that’s a relatively low amount of money. But we have to make sure that that money is actually utilized, and utilized well. JAY: Why do you say that’s a low amount of money? $600 million sounds like a lot of money. POLLIN: Well, it’s a–yeah. I mean, when we’re talking about a, you know, a green investment 20-year program on the order, I would say, of $200 billion a year–so that’s about 1.5 percent of GDP–so we’re talking about, you know, less than 1 percent of the money that would be going overall for green investment can cover and fully guarantee incomes. That’s critical. Fully guarantee incomes and pensions for all fossil fuel workers now, and over the next 20 years. This is what it will take. It is not going to help the, you know, the communities will still, as I said, face difficulties. But through community reinvestment and other kinds of support those things, those shocks can be cushioned, as well. JAY: And how are the unions that represent workers in the fossil fuel industry responding to the kind of proposal you’re making? POLLIN: I don’t know. Our article was just published last week. A big part of why I was motivated to write the article was in discussions overall about the green agenda hearing from the union leaders saying, you know, it’s great that you, Bob, in my other research–as we’ve talked about many times, Paul–what we show is there’s more jobs created by investing in a green economy than sustaining the fossil fuel economy. Like, three times more jobs. So overall, investing in the green economy is good for jobs. And I’ve told that story, including at meetings of the union people. But what they tell me in response is that’s all well and good, that’s all on paper, but coal miners have their jobs now. You know, if you invest in the keystone pipeline, that creates thousands of jobs now. And what your thing is is, you know, kind of some nice big thing that nobody can really count on. So that motivated me to really focus on what we can do and what we need to think about to make sure fossil fuel sector workers are covered to the maximum [inaud.]. JAY: A lot of environmentalists and environmental scientists I think would answer, yes, there has to be a just transition, but we don’t have 20 years to phase out fossil fuel. A lot, you know, a lot of people are saying without a much more radical phasing out and closing down, especially of coal, that there’s no way of meeting the necessary targets. How do you answer it now? POLLIN: Well, you know, again, you and I have talked about it before. According to my calculations, if we talk about cutting fossil fuels globally, by 40 percent within the next 20 years, 80 percent within the next 80 years–and I’m not a climate scientist, but going from what I know from climate science, that means that we are able, we should be able, to stabilize the climate at 2 degrees Celsius above the pre-industrial level. Now, at the Paris Climate Summit in November, last November and December, what they reached a conclusion was that getting to only stabilization at 2 degrees Celsius above pre-industrial levels is inadequate. We need to get 1.5 degrees. But look, roughly speaking, we’re not going to shut down the fossil fuel industry in a year or two. That’s just the reality, whatever what any environmentalist says or anybody says. So a 20-year, to get the fossil fuel industry cut by 40 percent within 20 years, is extremely ambitious. To get it 80 percent cut within 30 years, 35 years, extremely ambitious. And you know, those are feasible targets. That’s what my research has shown, and I’ve discussed this with people all over the world, on this. This is realistic. JAY: And what did Democratic Party platforms say on these issues, and what do you think of them? POLLIN: I don’t know, it hasn’t been written yet. The main thing that I–the discussion to date has been about, you know, these more traditional things like retraining, helping people find new jobs, relocation. And those are good things. I’m not against them. But what we’re–the main argument that we’re making is that if we’re thinking about this 20-year program, you can cover workers through one year, one year of early retirement, at full pay. Then we have to make sure the pensions are fully funded. So those should be the areas of focus, as opposed to retraining, relocation–because the people are not, for the most part they’re not going to get jobs that are as well-paying as their current job. JAY: All right. Thanks very much for joining us, Bob. POLLIN: Okay. Thanks for having me on, Paul. JAY: And thank you for joining us on the Real News Network.


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Robert Pollin

Robert Pollin is Professor of Economics at the University of Massachusetts in Amherst. He is the founding co-Director of the Political Economy Research Institute (PERI). His research centers on macroeconomics, conditions for low-wage workers in the US and globally, the analysis of financial markets, and the economics of building a clean-energy economy in the US. His latest book is Back to Full Employment. Other books include: A Measure of Fairness: the Economics of Living Wages and Minimum Wages in the United States, and Contours of Descent: US Economic Fractures and the Landscape of Global Austerity.