How to ensure a just global coal phase out

Helping countries transition to clean energy systems while meeting growing energy demand is one of the greatest development challenges of our time. Access to electricity is key to creating new jobs and supporting vital services, such as lighting, cooling, modern healthcare, better education, and affordable broadband.

But the energy used to power people's lives and boost economic activity is also the greatest driver of climate change. Today, the energy sector produces about three-quarters of all greenhouse gas emissions, largely because of coal, the world's most dominant and carbon-intensive source of energy.

Transitioning away from coal is one of the most vital steps we can take to fight climate change. The need for a Just Transition for All to a low carbon economy is an urgent and critical one.

But coal phase out will not be easy. Phasing out coal is complex and will take time. Closing mines not only displaces mine workers but disproportionately impacts workers in related sectors and entire communities in surrounding coal regions. This is particularly true of isolated regions where infrastructure and services are tied to mining. In these communities, mine closure will affect all economic activity. Many coal-producing countries lack the resources needed to protect workers and communities, remediate impacted lands, and capitalize on the economic opportunities a transition away from coal makes possible. The prospects for a better future are compelling. Low-carbon economies could create over 200 million new net jobs in the next decade in 24 major emerging economies, but policies are needed so the benefits from the green economy are widely shared.

While the transition will create millions of new jobs in the clean energy sector, many of the coal workers and communities most impacted will struggle to access them. Moreover, cultural, psychological, and other social impacts may have long-lasting effects, particularly in coal regions that already experience extreme inequality and high rates of poverty.

Pursuing a Just Transition for All will require a whole of society approach that considers a broad range of stakeholders, including governments, the private sector, communities, academia, and civil society. An integrated approach will help mitigate the impact on people and communities affected by coal phase out and create economic opportunities in more sustainable sectors, both locally and beyond. Critical measures include social protection policies to minimize the disruption to families and help workers transition into new jobs, and government investment in the green transition – including in education and training, infrastructure, job search and other labor programs, and in community-level interventions. The private sector and civil society can bring crucial insights and invaluable additional funding to support the development of viable economic models in challenging settings. Supporting a Just Transition for All also requires early upstream engagement and establishing meaningful partnerships with workers and communities and engaging them in decision making to design solutions for transitioning to regenerative economies and building more inclusive societies.

The World Bank has decades of experience in supporting countries where coal mines and power plants are closing, wherever they are in the transition process. This includes looking at the interdependencies between the decommissioning of coal assets—such as mining, transport, and power plants—and developing renewable energy programs to take their place. Since 1995, we have provided more than $3 billion to support the coal phase out goals.

As part of our Climate Change Action Plan 2021-25, we have doubled down on our commitment to helping countries accelerate the transition away from coal while protecting workers, investing in communities, and protecting the environment.

The World Bank has built an approach based on lessons from decades of transition experience and leveraged this approach to help national, regional, and local authorities around the world develop clear roadmaps for a Just Transition for All. In every engagement, our assistance helps to build governance structures, support the engagement and welfare of impacted workers and communities, and remediate and repurpose former mining lands and coal-fired power plants. We continue to learn and update our approach to enhance how we address the social and environmental impacts of the transition and how we support community participation in decision making for scaling the coal phase out processes.

We work with coal producing countries of all sizes to support a Just Transition for All. In every region, we help governments learn, plan, and implement Just Transition for All principles and practices that put people and the environment at the center of the transition away from coal. And we’re working closely with international partners to create consistent and collaborative financing, technical support, and policy guidance for countries in transition. IFC is also working with the private sector and communities to balance the socioeconomic and ecological considerations in the transition to a low-carbon economy.

How we deal with the climate change crisis is the defining issue of our time. With proper planning, a Just Transition for All is possible – assisting workers, communities and enterprises towards coal phase out, resulting in lower carbon and a cleaner environment. But the time it requires means we must act now.