Norwegian-funded research focuses on the dark side of energy transitions
“The difficulty lies not so much in developing new ideas as in escaping from old ones.”
Energy transitions needed to address climate change require not only introducing new low-carbon technologies but also phasing out carbon-intensive technologies. But closing industries, including energy industries, is a painful process that can lead to job losses, economic difficulties, and political opposition from industry and the public. In Germany, a country with one of the strongest climate commitments, attempts to close lignite coal mines have met strong resistance from coal miners and concerns over unemployment in lignite-rich regions.
To make matters worse, historically energy transitions tend not to replace old energy sources with new ones but build new energy technologies on top of old ones. In other words, even though new technologies grow, ‘old’ ones don’t automatically disappear. But there are cases of energy industries being phased out. Coal mining and use in the U.K. have been on the decline since roughly the 1960s.
How prevalent are these episodes of contractions and under what conditions do energy industries contract? What are the social and political consequences of energy industry contractions, and are there policies that have been successful in making energy industry contractions less painful? In light of this historic experience, will we be able to phase out carbon-intensive energy industries fast enough to meet the ambitious climate targets agreed in Paris?
A new project, called Contractions sets out to answer these questions. Contractions bring together researchers from the Centre for Climate and Energy Transformations at the University of Bergen, Norway the Rokkan Centre and the Energy Program at the International Institute for Applied Systems Analysis, Austria and it is funded by the Research Council of Norway under the Climate change research program. Last week, we kicked off the Contractions project with a stakeholder workshop at the University of Bergen.
We invited stakeholders from energy industry, government, and the investment community to discuss our research plan and ensure that our results are not only scientifically interesting but also relevant to the business and policy communities. These two days produced remarkable insights and exciting ideas for future research.
For one, we discussed the idea of using the consequences of the recent drop in oil prices as a proxy to study potential social and political effects of future contractions This downturn led to job losses in Norway and Canada as well as political instability in Venezuela and possibly more aggressive foreign policies and increase of autocratic trends of Russia.
There was also a question about transferability of jobs from coal, oil and gas industries to other activities and other sectors. When nuclear power plants are decommissioned, they usually keep the same workers and engineers employed, but does the same apply to oil rigs? Do the jobs in growing solar and wind industries emerge in the same locations and require the same qualifications as, say, in coal mining.
This project will contribute to answering these questions and many more. The first step will be to get a solid understanding of historical energy contractions including sharp downturns in energy prices. How fast did they happen? What were the consequences? How did workers, communities and states cope? Wrestling with these issues is necessary not only for making sure we can meet our climate goals but also in anticipating and guiding energy transitions driven by technological change and market forces.