Coal Mine

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GUEST OBSERVATION
Australia’s electricity sector has begun to transition away from coal, with coal’s contribution to our electricity mix falling from around four-fifths 13 years ago to around three-fifths today.
Twelve coal-fired power stations closed between 2012 and 2017.
There are clear upsides to the transition, among them an ongoing <a href="https://www.urban.com.au/property-observer" target="_blank">decline</a> in carbon dioxide emissions from the electricity sector.
For local economies, however, the closure of a coal-fired power station can create economic challenges, including higher unemployment.
We’ve quantified the effects of 12 closures
In a <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8489.12289" target="_blank">new paper</a> in the Australian Journal of Agricultural and Resource Economics, we use detailed Statistical Area Level 4 (<a href="https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1270.0.55.001%7EJuly%202016%7EMain%20Features%7EStatistical%20Area%20Level%204%20(SA4)%7E10016" target="_blank">SA4</a>) data to quantify the extent to which local unemployment rates have increased following the closures of twelve coal-fired power stations across Victoria, NSW, Queensland, South Australia and Western Australia.
There are 87 SA4 regions in Australia, each with an average population of around 290,000 people. We found that on average the regional unemployment rate climbs by around 0.7 percentage points after a station closes.
The effect remains observable for year or two, although it varies from region to region.
Clearly, labour mobility and the creation of new jobs do not fully make up for the impact of such closures.
This means there is scope and need for strategies to smooth the labour market transition as we move towards a lower-carbon energy system.
What we found
A simple look at the data indicates that local unemployment rates tend to rise after closures, both in absolute terms and relative to what is happening at the state level.
We find that this effect remains when controlling for the impacts of other key factors, such as macroeconomic shocks and the coal export price.
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<a href="https://images.theconversation.com/files/266292/original/file-20190328-139364-g9g1jv.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/266292/original/file-20190328-139364-g9g1jv.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
<a class="source" href="https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8489.12289" target="_blank">Burke, Best, Jotzo, 2019</a>
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Typically the increase in the first year is around 0.7 percentage points – for example, from 6.0% prior to a closure to 6.7% afterwards. It is a sizeable effect. For males the increase is 0.9 percentage points.
The Latrobe Valley in Victoria faces one of the biggest structural adjustment challenges. It has seen two closures of coal-fired power stations in recent years: Morwell in 2014 and Hazelwood in 2017.
As the graph below indicates, the average unemployment rate in the Latrobe-Gippsland SA4 region climbed well above the Victorian average after the first closure, before turning down.
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<a href="https://images.theconversation.com/files/266330/original/file-20190328-139371-9lm7bd.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/266330/original/file-20190328-139371-9lm7bd.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
<a class="source" href="http://www.abs.gov.au/ausstats/abs@.nsf/PrimaryMainFeatures/6291.0.55.001" target="_blank">ABS Labour Force, detailed</a>
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A multitude of local transition efforts are underway, coordinated by the <a href="https://lva.vic.gov.au/" target="_blank">Latrobe Valley Authority</a>. These have included a <a href="https://lva.vic.gov.au/worker-transfer-scheme/" target="_blank">worker transfer scheme</a> that has found places for displaced employees at other power stations.
At the even finer-grained level SA2 level, the unemployment rate in the town of Morwell remaines stuck at around <a href="https://docs.jobs.gov.au/documents/sa2-data-tables-small-area-labour-markets-september-quarter-2018" target="_blank">17%</a>, one of the highest rates in Victoria, years after the closure. Before the closure it was around 13%.
The region’s remaining power stations – Yallourn W, Loy Yang A and Loy Yang B – are ageing. Yallourn W is the oldest, at 45 years.
We need to prepare
Structural change is an ever-present feature of a healthy economy. But, especially where rapid structural change happens due to closures of large plants in regional areas, it is important to have measures in place to ease the transition.
The Labor party has promised a national <a href="https://theconversation.com/labors-policy-can-smooth-the-energy-transition-but-much-more-will-be-needed-to-tackle-emissions-107565" target="_blank">Just Transition Authority</a> to plan for and manage the transition process as coal-fired power stations close. Whether it can help mitigate rises in local unemployment after plant closures remains to be seen.
Many of Australia’s remaining coal-fired power stations are likely to close over the next decade or two as renewable energy becomes more cost competitive and the pressure increases to meet emissions targets. The next cab off the rank is likely to be the Liddell power station in the NSW Hunter Valley, which is due to cease coal-fired operations <a href="https://www.smh.com.au/business/companies/agl-tells-shareholders-it-will-close-liddell-power-plant-in-2022-20180926-p50633" target="_blank">in 2022</a>.
And then there’s the larger question of the transition away from coal mining. Export demand for coal <a href="https://coaltransitions.files.wordpress.com/2018/09/coaltransitions_finalreport_australia_20181.pdf" target="_blank">is set to fall over time</a>, winding back a large export industry in New South Wales and Queensland.
The <a href="https://theconversation.com/labors-policy-can-smooth-the-energy-transition-but-much-more-will-be-needed-to-tackle-emissions-107565" target="_blank">Just Transition Authority</a> will have its work cut out.
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This research was supported by the Coal Transitions Project and the Australian-German Energy Transition Hub. An open access version of the research paper is available <a href="https://ccep.crawford.anu.edu.au/publication/ccep-working-paper/12998/closures-coal-fired-power-stations-australia-local-unemployment">here</a>.<img src="https://counter.theconversation.com/content/113369/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Paul Burke, Associate Professor, Crawford School of Public Policy, Australian National University
Frank Jotzo, Director, Centre for Climate Economics and Policy, Crawford School of Public Policy, Australian National University
Rohan Best, Lecturer in Economics, Macquarie University
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/bad-news-closing-coal-fired-power-stations-costs-jobs-we-need-to-prepare-113369" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

Closing coal-fired power stations costs jobs - we need to prepare

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<img src="https://counter.theconversation.edu.au/content/69423/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The Carmichael coal mine planned for Queensland’s Galilee Basin has cleared another legal hurdle, with the state’s Supreme Court dismissing a legal challenge to the validity of the Queensland government’s decision to approve the project.
The court found in favour of the Queensland Department of Environment and Heritage Protection, ruling that its approval of Indian firm Adani’s proposal was within the rules.
The decision is another setback for environmentalists’ bid to stop the controversial project. But Adani does not yet have a green light to break ground on the project, and legal questions still remain, both about this project and about climate change litigation more generally.
<h2>The Supreme Court ruling</h2>
It is important to note that this was a judicial review proceeding – a narrow type of review in which the court is not permitted to consider whether or not the decision to approve the mine was “correct”. The court could only rule on whether correct procedures were followed, while accepting that the decision was at the government’s discretion.
Within this already narrow context, the argument on which the legal challenge hinged was even more constrained. It was brought by an environmental campaign group called Land Services of Coast and Country (LSCC), and was focused on a particular point of Queensland environmental law.
Queensland’s Environmental Protection Act 1994 requires that decisions are made in accordance with the Act’s objective, which is to deliver “ecologically sustainable developent”. LSCC argued that the government failed to do this in approving the coalmine.
The Supreme Court disagreed, finding that the government had considered all matters that it were obliged to consider. So in this respect, the Supreme Court’s decision is an endorsement of the process, but not necessarily the ultimate decision.
Is this the final hurdle overcome for Adani?
In short, no. The decision can be referred to Queensland’s Court of Appeal. There is also ongoing litigation against Adani in the Federal Court of Australia under federal environmental and native title laws. There are also some approvals yet to be obtained by Adani, including a groundwater licence.
Is this ruling a rejection of climate change arguments against the coal mine?
No. This case dealt specifically with the question of whether the Queensland government had complied with a particular aspect of the law. The Supreme Court did not (and was not able to) address the potential climate change impacts of the proposed mine.
These climate issues were addressed more fully by Queensland’s Land Court in the case of Adani Mining Pty Ltd v Land Services of Coast and Country Inc &amp; Ors (2015) QLC 48.
Importantly, the Land Court in this case accepted the scientific basis for climate change, and agreed that “scope 3 emissions” (that is, the emissions produced when the coal is burned overseas) are indeed a relevant consideration in whether or not to approve the mine.
However, Adani successfully used a “market substitution” defence, arguing that if the mine is refused, coal would simply be mined elsewhere and burned regardless.
What does this case say about climate change litigation more generally?
The latest judgement was handed down amid a series of fresh attacks on the rights of environmental groups to use Australia’s environmental laws to hold companies and governments to account. Federal Environment and Energy Minister Josh Frydenberg has raised concerns about “activists … seeking to frustrate” projects with “vexatious litigation”, while Prime Minister Malcolm Turnbull has revived plans to amend federal environmental legislation so as to restrict standing to apply for judicial review – the so-called “lawfare” amendments. 
In the wake of the new ruling, the head of the Queensland Resources Council has criticised the delays caused by litigation against mining projects.
This begs the question: is climate change litigation “vexatious”? A close analysis of Queensland court decisions would suggest the opposite. Climate change issues have been considered in a series of three key Queensland Land Court cases: Wandoan Mine in 2012, Alpha Coal Project in 2014, and the Carmichael Mine (Adani) in 2015. 
The Alpha Coal matter has proceeded to the Supreme Court, the Court of Appeal, and leave has been sought to appeal to the High Court of Australia. Importantly, none of these cases has been dismissed as vexatious; each resulted in a lengthy judgement analysing the complex legal issues raised by the objector.
Furthermore, although objectors have not yet succeeded in stopping a mining project on the basis of climate concerns, they have nevertheless made modest strides. Most recently, President McMurdo of Queensland’s Court of Appeal found that the Land Court must consider scope 3 emissions in deciding whether a mine should be granted environmental approval. This represents significant progress, given that climate science was questioned by Queensland Courts less than ten years ago. 
The only significant barrier remaining to a successful climate change case is the market substitution defence, which will be considered by the High Court if special leave is granted in the Alpha Coal matter.
Climate change litigation has also clarified other environmental and economic impacts. In the Carmichael Mine case, it was discovered that the mine site was a critical habitat for the endangered black-throated finch – evidence that was not previously available. The Land Court ordered strict conditions aimed at protecting this species. The litigation also served to clarify the significantly overstated economic benefits of the mine – particularly Adani’s estimate that it would generate more than 10,000 jobs. It was revealed in court that this figure was more likely to be 1,206 jobs in Queensland, as part of a total of 1,464 jobs in Australia.
Where to for climate change litigation?
Although the latest judgement is another setback for environmental groups, it is part of a bigger body of case law that is making real and discernible progress in ensuring that climate change is considered by decision-makers and courts.
Given that several courts have agreed on the validity of climate litigants’ arguments, it seems perverse for the federal government to try and restrict environmental groups’ right to continue raising these concerns.
Justine Bell-James is lecturer in law, The University of Queensland and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/justine-bell-james-39245" target="_blank">here</a>.
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