A Just Transition for Fossil Fuels Workers is Possible
TRNN Replay: PERI co-director Bob Pollin describes his plan that guarantees pensions and wages, shifts workers out of the industry through retirement rather than job losses, and helps the country meet the UN climate goals
SHARMINI PERIES: It’s the Real News Network. I’m Sharmini Peries coming to you from Baltimore.
You may have noticed that energy policy and climate change, one of the greatest issues facing human survival today, have not been at the forefront of this year’s presidential election. It is only over the issue of jobs where energy policy did get a brief mention during the second presidential debate. This is when Donald Trump and Hillary Clinton were asked about their energy policies and they both chose to focus in on how to save dying coal industry jobs but did not provide much detail on what they would actually do to solve the problem. A major new report from the political economy research institute titled The Economics of Just Transition: A Framework for Supporting Fossil Fuel Dependent Workers and Communities in the United States by Robert Pollin and Brian Callaci. This reports many solutions. It details a plan for how jobs in energy transition is viable while reducing the greenhouse gas emissions outlined by the UN intergovernmental panel on climate change.
Joining us now to discuss this transition plan is one of the coauthors of the paper, Robert Pollin. Bob Pollin is a distinguished professor of economics and co-director of the Political Economy Research Institute or PERI, at the University of Massachusetts Amherst. He’s the author of several books including Greening the Global Economy.
Bob, so good to have you with us.
BOB POLLIN: Always great to be on. Thank you Sharmini.
PERIES: So Bob, let’s start with your proposed framework for supporting fossil fuel dependent workers and the communities at large? Just give us an overview.
POLLIN: We looked at 3 basic considerations. Jobs for the workers who are either in the coal industry, oil and gas, or the insulary industries such as support industries for oil and coal, refining, pipeline, and natural gas distribution, and electric utilities. So we looked at those. We looked at the number of job losses and we looked at how to get people into better jobs or at least as good of jobs starting in the clean energy industry that’s going to expand. Number 2, we looked at protecting the pensions for the workers who are going to be reaching retirement age over the course of the transition to a green economy. In fact, what we show is that you can cover most of the job losses through contraction in oil, coal, and natural gas in insulary industries. You can cover most through the attrition by retirement. In fact, we find that about 80% of all job losses can be covered by attrition through retirement but then you have to make sure that the pensions are fully protected so we do that.
The third thing is, we look at the communities that will face significant impacts and how we can either cushion the impacts or get the communities actually revived through alternative investment strategies.
PERIES: Alright so let’s dig into each of these. Let’s take up the retirement plan and viability of it. How much of this is going to cost us and does this essentially mean early retirement?
POLLIN: No what we’re talking about is retirement at 65. Now it’s not legally required that people retire at 65 but we’re assuming that people are going to want to retire at 65. Most of them will. So what we show is that we look at the age distribution of people currently employed in oil and gas or those insulary industries and we say okay looking at the age distribution, if we think about a 20-year transition, wherein oil coal, and natural gas are cut by between 40-60% over that 20-year period, we find that roughly 80% of the people are going to be able to, the job cuts can be covered by people retiring.
So that’s a pretty solid result. Now then we say well that still does mean that roughly 20% are going to lose their jobs and those are going to be younger workers. So what we say in the paper is we are going to guarantee those people jobs in the growing clean energy sector. If need be than guaranteed jobs in the public investment in the clean energy sector. We’re going to guarantee them jobs. We’re going to guarantee them that their pay will not be cut at all. If there is a differential in pay between the new jobs and the old jobs, they will have insurance to cover that. That they will get the necessary training so that they can move into these new employment opportunities without too much trouble and we’re going to cover relocation for younger people that may have to move.
So if you add all those things together, what we’re finding is that somewhere, 200 million dollars, 300 million dollars a year at most is going to cover all that. Now that’s a lot of money but it’s actually a miniscule fraction of what we spend every year on fossil fuel energy. So it’s easily affordable.
PERIES: And give us a sense, if you are a worker in the fossil fuel industry now, imagine what you would go through in terms of this transition, retraining possibly relocating and so on. It seems abstract for people but you’re saying it’s possible. Who would do the training, how would this transition happen if you’re individual?
POLLIN: Yea well again and we recognize that just putting it down on paper does not capture the human drama, the trauma that people face when they lose their jobs and have to find new jobs. I’ve been in discussions with different groups and so forth that tell me oh you’re giving us a bunch of numbers; you don’t know what it is like for real. Of course I’m not talking about – I can’t possibly know what it’s really like but I’m trying to create an environment in which the transition is just, is easy to undertake as possible.
So what we’re saying is most of the people are going to move out of the oil and coal industry through retirement. So they will never have to lose their jobs. They do have to have guaranteed pension. So we build in wage insurance. So we’re taking account of that. So we are saying you will not experience any pay cut at all. You are guaranteed a job. So it’s not just like another training program. We already have the trade adjustment assistance program in the United States which is for workers that supposedly lose their jobs through changes in trade policy in the United States. That program has been derided for years as so called burial insurance for workers. Because they say okay you get $6,000. We’re going to help you out. There’s a training program now, stop bothering us and good luck finding a job. What we’re saying is you’re guaranteed a job. The guarantee is going to be firm because we’re going to say the investments in green energy, the public investments in green energy are going to stipulate that workers that have been displaced through contraction in the fossil fuel industry will have priority jobs.
PERIES: Right and further Bob, you argue that transition from fossil fuel to renewable clean energy actually means an increase in employment levels, particularly some of these workers are going to be retrained into a new industry. Give us a sense of the investment that that will take in terms of the transition. I mean retraining of course in creating these new renewable jobs.
POLLIN: Well, if we’re going to take climate science seriously, then at a minimum my research which is consistent with other people’s research. My research says we in the United States have to be investing on the order of 200 billion dollars a year to build up clean energy and energy efficiency in the United States. If we’re going to have any chance at all of hitting the emissions reduction targets stipulate by the intergovernmental panel on climate change. Now if we take that 200 billion dollar per year number, and even if we say, we are going to take every single dollar of that 200 billion, we’re going to take it out of the fossil fuel industry and put it into green energy. Now that’s not plausible and that’s not really going to happen that every dollar but let’s say it is. What we find is yes there’s going to be cut backs in fossil fuels but the net increase in employment is going to be under range of 3 million jobs per year.
So 3 million jobs per year by building up the clean energy sectors in the United States. Now what are we talking about in terms of job losses in the fossil fuel industry that workers that need to be transitioned. Well on average over a 20-year period, we’re talking about something like less than 3 thousand jobs. So we’ve got 3 million jobs getting created through new investments and through the contraction of the fossil fuel industry. We’re talking about having to find new jobs for something like 3 thousand workers a year. So it is obviously something that can be handled through even a minimal investment in the well-being of these displaced workers.
PERIES: Alright Bob, both Hillary Clinton and Bernie Sanders presented their own plans for a transition to clean energy. But at significantly higher costs. Now you estimate your whole program to be around 600 million per year. What is a discrepancy here? What’s the difference?
POLLIN: As far as I know, the discrepancy here is they just made the number up. I looked at their websites and I of course I was very interested to see their numbers but they are actually developed, at least as far as I know. I haven’t seen any document which says this is how we derive this number. Now that’s fine. Political campaigns are not research seminars and we understand that. But we actually have done the research.
So what we found out is the 600 million dollars a year rough, you know if we do that over 20 years, we’re talking about 2 billion dollars. Hillary Clinton’s platform talks about giving 30 billion dollars to cover just this issue of just transition for the communities and the workers. Bernie Sanders had a number that was 41 billion. So even though those numbers, I can’t see where they derive them, at least what they are conveying is that the democratic party candidates are talking about numbers that if actually deployed could do the job, could create a cushion for workers and communities that are going to be hit by the transition to green energy.
So you know what we’ve come up with is a number that’s 12 billion. So it’s a third of Hillary and we’re saying that we think that this is a viable program that could work.
PERIES: And you also argue that this is actually goiugn to create more jobs.
POLLIN: Yea well the green investments will create something like 3 million jobs. The contraction of the fossil fuel industry is going to mean something like 15 thousand jobs lost per year. But of those 15 thousand, something like 12 thousand are going to be covered by people retiring or being at retirement age. That’s why we’re only having to find good alternative employment for something like 3 thousand workers.
Now let’s say our numbers are wrong. Let’s say that the decline is not steady and that there are coalmines that just shut down and it’s not going to be 3 thousand at one time, it could be 6 thousand, it could be 12 thousand. We do factor that into our analysis of course it becomes a little more expensive because then we have to spend more money at a given time finding jobs for people and training them. But that then also means that in subsequent years you spend less money.
So we do try to factor in these kinds of potential shocks of big job losses.
PERIES: Bob finally, when we think of this kind of transition it just seems so overwhelming but you have some very serious policy recommendations and a transition plan that is quite viable. Is there anyone listening? Are they calling on you to explain your plan here?
POLLIN: I was very pleased as soon as our paper, we just posted our paper about a week ago so I don’t know if I’m allowed to or if it’s appropriate for me to mention the names but I will say that there’s some people in congress associated with the progressive caucus in congress that are already looking at it very seriously as a way to introduce legislation.
In addition, I am working with environmental groups and labor groups in 2 states. In the state of Washington and the state of New York about implementing these kinds of measures as they apply in those states. So there is a lot of interest and the reason is clear. Because we have to stop burning fossil fuels. We must. It doesn’t matter what Donald Trump says. It doesn’t matter what Hillary Clinton says about fracking. We have to stop burning fossil fuels and at the same time we have to provide a just transition. We have to create decent opportunities for the workers who will be hurt by the contraction in the fossil fuel industry.
PERIES: Alright Bob, I thank you for the great work you’ve done here and I’m looking forward to having you back very soon.
POLLIN: Okay. Thanks very much. Thanks for having me on.
PERIES: And thank you for joining us on the Real News Network.
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