Alberta and Just Transition | What's Left

by Editors (What's Left) last modified 2016-05-03T10:50:39-04:00
We need reality-based solutions for facilitating and funding a Just Transition for workers. It will require the government to invest in publicly owned productive capacity that will generate the revenue needed to fund the hiring and drive the economic transition in the correct direction. This is not a new idea, but it is one that is proven to work.

Employment situations are being impacted by major shifts in the economy. Heavy losses in industrial production, the movement away from coal energy generation, and the fast-paced introduction of technology in the workplace has driven both under-employment and unemployment. Traditional sectors of work that significantly increased the number of workers making a decent living are being gutted through off-shoring and/or automation.

In response to these massive shifts in employment, "Just Transition" has been a term used by labour-side policy people to describe an alternative to a laissez-faire, fend-for-yourself style free market approach advocated by capital. Ever since this transition started, labour and progressives have been calling for "Just Transition" funds and policies to help retrain and resettle affected workers.

Unfortunately, centrist and right-wing governments have rejected such state-level interventions in the economy, preferring to blame workers who did not foresee the loss of their own jobs and plan accordingly. As such, it has tended to be a phrase that is brought out only when there is a temporary spike in unemployment during a prolonged downturn in the local economy, usually accompanied with statements blaming previous governments for not investing in a fund to support affected workers.

Alberta is a classic case with "if only" used to refer to the wasted opportunity to save and/or invest their oil wealth instead of spending the money when they had it. The same goes for Just Transition funding, where the money needed to facilitate the shift in employment from a fossil-based fuel economy was not put aside during better times.

There has been a lot of discussion about the transition to a green energy economy following the collapse of oil prices, the need to fight climate change, and massive sifts in the demographics of employment. It is time to think about how we fund a transition to new jobs within the current economy. And the limitations of capitalism and free markets to facilitate this transition fairly should be exposed.

The desired shift to renewable energy is an example that allows for the consideration of the interaction between employment, fast-moving economic-wide technological shifts, and demographic changes in the workforce. Unfortunately, missing from the current conversation is a holistic left-wing economic perspective.

Instead, we are presented with a patchwork of "Progressivist" and liberal policy options that involve wishful thinking, are based on sound bites, and address only a tiny part of the issue. Often, they are too idealist to be implemented or funded in the current economic context. These non-solutions include the Basic Income Guarantee, public subsidies to private green energy through feed-in tariffs, marketization of the environment including cap and trade systems, commercialization of research initiatives at universities, and the old canard of hoping for an unworkable technology to save us (i.e., the always hoped for carbon capture and storage). Unfortunately, these have never and will never save the economy from the impacts of capitalism because they all support the worst aspects of the unregulated markets that have driven the current downturn.

The alternative is rather less complex, and sounds less sexy than a promise of a cool disruptive technologies promoted by the new tech billionaires. The reality-based solutions simply require the government to invest in publicly owned productive capacity that will generate the revenue needed to fund the hiring and drive the economic transition in the correct direction. This is not a new idea, but it is one that is proven to work.

The current Alberta economy offers a perfect example to look at Just Transition and public investment in revenue generation.

Just Transition

The Alberta government's recent Climate Leadership report identifies the government as the primary source of funding for a transition of workers. This is a bit absurd given that the government gave industry over two decades notice that coal generation would be mothballed. The costs of a Just Transition for workers should be spread equitably amongst those who profit from the current economy.

Private owners of fossil-fuel electricity have made massive profits from the work and government regulatory frameworks and should bear the majority of the costs. Also, current revenue generation based on fossil fuels means there are ways to extract some of this profit for Just Transition funds.

There are many ways to build a Just Transition fund including:

  • Wires Charges added to transmission and distribution. This has been proposed in the United States by the Utility Workers Union of America.
  • Insurance-type charge placed on generators. This has been used in Europe.
  • Dedicated allocation of carbon pricing revenue. Alberta reports have suggested this.
  • Dedicated consumer electricity rate tax/charge on electricity bills. This has been done for other purposes in Ontario.
  • Pension funding targeted for Just Transition investment bonds. Direct public investment in renewable jobs can be tied to Just Transition funding.

Unfortunately, building a fund does not solve the problem of funding the program for current unemployed workers. In addition to the development of a fund, the public sector has the ability to invest in programs that will generate the necessary revenue for the government.

Public-Public Partnerships

The private energy market left-over from old Progressive Conservative governments in Alberta means renewables are priced out of the market and there is nothing that forces producers to take up renewal investment. The current transition to natural gas is not a solution to the carbon issue. However, public municipal utilities offer an option for investment that can affect the electricity market and offer options for the expansion of public ownership.

Part of the solution lies in increased electrical energy use (electric car charging, transit expansion, etc.) being tied to expansion of renewable energy generation. Pages 73-74 of the Alberta Climate Leadership report suggests exactly this, but the report does not identify the revenue generation potential of publicly owned investments. Public-Public Partnerships (as opposed to Public-Private Partnerships) can be used to expand renewable generation and support revenue generation specifically identified for Just Transition funding.

Enmax and Epcor are both public municipal utilities with the capacity to support the expansion of renewable generation and storage. Lack of storage capacity for electricity from wind and solar is limiting the expansion of wind generation in Alberta. Net generation is far below maximum capacity for wind and only two projects for storage capacity are currently planned to be developed, both private.

The expansion of storage is perfectly suited for public investment and ownership alongside the expansion of public renewables that can actually generate revenue. The jobs created are easily identified. Forthcoming updates to micro-generated regulation should be made with public investment (and ownership) with increased renewable generation capacity in mind.

Public investments in publicly owned productive capacity with revenue generation options include:

  • Supported public-public partnerships between provinces and municipalities in renewable generation with cost and revenue sharing agreements.
  • Electric and hybrid plug-in station expansions.
  • Public electric car share.
  • Industrial-scale battery storage capacity distributed near wind generation to feed the grid in peak-usage times.
  • Ultra high heat hot water heaters and other in-home solutions for night generation usage to offset use during the day time.
  • Provincial and municipal electric/hybrid plug-in fleet vehicles.

 

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