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2 months ago
The need for a just transition for regions that depend upon coal fired energy was a key part of Labor’s climate and energy election policies.
There are three phases of transition likely to occur.
The first and immediate is coal-fired energy where ageing power stations are closing down and in fact renewable energy is not only cheaper than new coal fired power, but also existing coal fired power stations.
The second phase goes to thermal coal mining.
Exports of Australian thermal coal have increased significantly as overseas power stations replace coal from other countries with Australian coal, which is generally better quality.
In fact, between 2012 and 2018 Australian thermal coal exports have risen by almost 27 per cent.
That’s great news in terms of jobs and our local economy.
However, we have to recognise that global demand for thermal coal peaked in 2013 and fell by 6 per cent over the next five years.
Global demand is in structural decline and the debate goes to which decade in which Australian coal exports will begin to decline significantly.
The third phase is around metallurgical coal.
There is currently no available method to produce steel without coking coal at an industrial level.
In the meantime, coking coal will be needed for the clean energy transition – for example it takes over 200 tonnes of metallurgical coal to produce one wind turbine.
I’m convinced the last tonne of coking coal mined in the world will be Bowen Basin coal due to its quality and relatively cheap cost of extraction.
A couple of fundamental principles have driven Labor’s approach to phase one of the transition.
The first principle is that as we move to greater use of clean and renewable energy sources, workers and regions whose livelihoods currently rely on coal-fired power must be treated fairly.
It is not fair to expect those workers and those regional communities to shoulder a disproportionate part of the economic cost of making this transition.
Failing to take steps to manage the transition would not only be unfair – it would also be bad economic and social policy.
It would leave those regions exposed to negative economic and social impacts that communities like the Latrobe Valley have experienced in the past – social and economic costs that can scar people and communities for years.
It would also erode political and community support for policies to tackle climate change and reduce greenhouse gas emissions.
The second fundamental principle is that there is an important role for government in planning for and managing the transition.
In a country like Australia, with its history of strong reliance on coal-fired electricity generation, a proactive role for government in achieving a just transition must be a central element in climate and energy policy.
Government has both the ability and the responsibility to plan and manage the inevitable transition.
And it must do so in close consultation with industry, unions, workers and communities – to ensure that policies reflect the needs of local communities and to give those communities genuine input and involvement.
So those are the principles that Labor has brought to bear on these issues.
They led us to develop a number of specific policies.
Firstly, we announced a policy designed to ensure that workers in the electricity generation sector who want to stay on in the industry are able to do so even as individual power stations close.
This would be achieved through a pooled redundancy model.
When a power station closes we would work with the industry and neighbouring power stations that are staying open so that they offer voluntary redundancies to their workforce.
That would create opportunities for workers at the power station which is closing to transfer to other power stations in the region.
We must not repeat what has occurred in earlier power station closures where the workers were left behind – made redundant with no opportunity to redeploy elsewhere in the electricity sector.
This model is based on the German coal mining example.
Secondly, we announced a policy to require the owners of power stations to provide three years’ notice of any planned closure.
A mandatory three-year notice period would allow government to work with employers, the workforce, and community and regional organisations to begin the planning for power station closures.
This would avoid what happened with the closure of the Hazelwood plant where the local community and the workers had only five months’ notice of that decision.
Our third policy proposal was around economic diversification – creating new opportunities for these regions by establishing a Just Transitions Authority to drive diversification.
Regions like the Hunter and Latrobe Valleys which rely heavily on coal-fired electricity generation have great strengths – skilled and experienced workers, thriving local communities, clusters of dynamic small businesses and contractors that have grown up to service the electricity sector.
Our approach through the Just Transition Authority was to work with these regions to take advantage of their strengths by developing new economic opportunities – in the wider energy sector and beyond.
So we announced a $1.1 billon hydrogen plan.
And we identified some 71,000 new jobs that would come from the growth of the renewable energy sector.
There are also going to be opportunities in these regions in industries like agriculture and food processing, which have significant growth potential driven by rising demand from the Asian region.
A lot of good work has been done by regional organisations and local government to develop new opportunities – but they need stronger support from the Federal Government in planning and driving economic diversification.
Obviously Labor was not successful at the recent Federal election, so we are not in a position to put these policies into place.
We will naturally carefully review these policies in light of the election outcome, but while our specific policies may change, the principles and values that underlie them won’t.
Unfortunately we have a Government which is abdicating the field:
  • Turning a blind eye to the risks of climate change
  • Failing to put in place effective climate and energy policies
  • And leaving local communities to fend for themselves.
Our concern is that the Government’s inaction on climate and energy policy means local communities now face the risks of unplanned, unfair, disorderly and disruptive impacts in the coming period.
For our part, we will hold the Government to account for its policy failures and we will continue to work on alternative policies for a just transition.
Thank you for the opportunity to take part in today’s discussion.
I look forward to continuing to work with stakeholders on these issues in the coming period.