Fossil Fuel Industry Phase-Out and Just Transition: Designing Policies to Protect Workers’ Living Standards

Published in The Journal of Human Development and Capabilities

The overall set of just transition policies is fully aligned with the Energy Justice and Capabilities Approach as well as the UN’s Sustainable Development Goals. Within this framework, the paper first reviews experiences with transitional policies in Germany, the UK, the EU and, more briefly, Japan and Canada. The policies either implemented or discussed in these cases do not provide the needed guarantees. The paper then presents an illustrative robust just transition program for the heavily fossil fuel-dependent U.S. state of West Virginia. This program will cost, as an annual average, about $42,000 per impacted worker, or about 0.2 percent of West Virginia’s current GDP. I briefly summarize results for seven other U.S. states and for the overall U.S. economy. For the U.S. economy overall, the just transition program’s costs would total to about 0.015 percent of GDP. These findings demonstrate the financial viability of robust just transition programs for high-income economies.

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