The energy transition: from climate action to regional policy priority

2019 marked the start of Europe’s ambition to become the world’s first climate-neutral continent. Renewable energy use is rapidly growing and decarbonisation is now at the core of national energy policy strategies. The phase-out of fossil fuels particularly affects coal-producing regions and has put energy transition firmly on the regional policy agenda.

In line with the 2016 Paris Climate Agreement, the EU aims to reduce climate emissions from the energy sector by at least 54% by 2030 and at least 93% by 2050, compared to 1990. The 2019 Green Deal even adjusted the 2050 emission target to net-zero. Energy production and use account for over 75% of greenhouse gas emissions.[1] These targets imply a shift out of coal-mining and coal-fired power in the coming decades.

In Europe, coal production is geographically concentrated in Poland, Germany, Czechia, Bulgaria and Romania. Germany and Poland together account for 54% of the EU’s coal-related climate emissions. The coal sector is linked into other regional sectors and supply chains and the direction of regional economic development is further impacted by political, social and cultural networks.

What is the policy response to energy transition? EU Cohesion policy 2021-27 is expected to include energy transition, as part of a carbon-free economy, as a main priority. This could include additional support for coal transition regions, such as through the Just Transition Mechanism.[2] EU-wide policies are important in acknowledging that climate change issues do not stop at the border. National regional policies are also targeting coal regions. The German federal government, for example, has agreed an ambitious support programme of its remaining lignite regions, with €40 billion of federal funding to 2038.

Important lessons from past coal transitions underline the need for a long-term, well-funded and multi-faceted strategy involving a wide range of stakeholders. This supports the generation of new ideas, the activation of regional capacities and the reconfiguration of social capital. Local communities should also be involved in the transition process. Regional policy priorities in coal producing regions and countries have shifted. In the past, efforts have focused more on value-for-money and productivity of coal production and power in individual regions. Now, the urgency of global climate change challenges and resulting emission-reduction targets have become the main drivers for transition.

There is rapid movement in the energy transition policy field. Structural reforms are not limited to the coal sector. Other carbon-intensive and fossil fuel-based industries are also facing emission reduction targets[3]. New energy infrastructure, supply chains, trading relationships, technologies, skill sets and institutional frameworks also require structural changes. The challenge for national regional policies is to find and build on regional strengths, and prioritise the diversification of local/regional economies and supply chains away from coal. While regions can draw on coal-industry related skills, capacities and resources, areas with fewer advantages and adaptive capacities will need additional support.

This blog is based on the study “Energy Transition in Europe’s Coal Regions: Issues for Regional Policy”  by Sara Davies, Wilbert den Hoed and Rona Michie. It was undertaken for the European Regional Policy Research Consortium and was presented at the 40th Annual Conference in Scotland on 31 September – 2 October 2019. Read the full report here.

For our research related to the energy transition, click here.

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