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What are the multiple impacts of just transitions? Insights from the recently released Impact Matrix Report

13 February 2024

A new study by IEECP experts Marco Peretto, Diana Süsser, and intern Zografia Andreosatou for the JUSTEM project examines the multiple impacts of just transitions.

The move towards a climate neutral society powered by renewables will bring many benefits, but for those living in coal regions, there is uncertainty about how they will be impacted by the shift away from polluting fossil fuels. The rationale behind the Just Transition principle is to ensure that communities who have in the past been employed by carbon-intensive industries do not suffer adverse impacts when we switch to a cleaner energy system. In the EU, countries are obligated to have a Territorial Just Transition Plan (TJTP) in place to enable a socially accepted transition that considers the impact on the local community. The TJTPs are a crucial part of a region's strategy to ensure a smooth energy transition and to bring everyone on board.

The EU-funded JUSTEM project is working alongside local and regional authorities to engage with citizens and build trust and confidence in a coal-free community. The phase-out of coal requires a holistic approach that considers the social, environmental, demographic, and economic consequences. As part of JUSTEM, researchers analysed the key impacts associated with a just transition and developed an impact matrix and a set of indicators to apply to six pilot regions.

All regions are highly dependent on coal.

*All these countries are eligible for the Just Transition Fund

Why an impact matrix?

The matrix was developed because there is a need to better define the impacts of a just transition. Researchers found that all TJTPs have gaps in relation to defining the impacts of transitions and most plans lack any kind of method to quantify these impacts.

The aim was to provide an overview of the main impacts of a just transition that need to be considered and to provide a framework for assessing Territorial Just Transition Plans (TJTPs). The impact categories and indicators were developed from the most relevant literature. The data used to assess the indicators was obtained from Eurostat, this was to ensure cohesion between the six different pilot regions, for data availability and for greater replicability of the matrix tool.

The matrix allowed researchers to analyse how the TJTPs address the impacts (negative and positive) of the transition process. For more information on the methodology, read the report here https://ieecp.org/publications/justem-impact-matrix-report/.

The multiple impacts approach

Applying the indicator matrix to the pilot regions gave greater insights into the six regions’ challenges and opportunities. The different impact categories give an overview of the trends that each region faces.

The following section presents some interesting points of the report.

Social dimension

The transition to a cleaner energy system will have social impacts for the communities in coal regions. Unemployment is a central issue in the just transition process. Current TJTPs focus on unemployment, as job losses are already apparent in coal regions. The social indicators allowed for a deeper investigation into this issue, for instance gender implications, as women will face their own set of consequences. The unemployment rate for women is highest in the regions of Western Macedonia and Asturias. The TJTP of Asturias has addressed this issue by outlining several measures to support women and counter the level of female unemployment in the region. In the case of Stara Zagora, the just transition is expected to have positive impact, as the there is a negative trend in female unemployment.

Economic dimension

The local economies of the coal-dependent regions need restructuring to support the population in more sustainable activities. The closure of mines and extraction sites is expected to have a range of negative or mixed impacts for most regions (the exception is for Stara Zagora, which has an overall positive impact). Economic activity, employment, and energy supply for each region will be affected by the closure of these industries. This was confirmed by the quantitative analysis, which showed all regions are facing higher electricity and gas prices. Unemployment rates in the regions of Western Macedonia and Asturias were some of the highest, highlighting the challenges they face. For energy poverty, some regions were more vulnerable than others, for example, in Silesia, the data showed an increase in households without access to adequate heating. TJTPs will need to focus on strategies to create new employment opportunities and address energy poverty.

Demographic dimension

For the pilot regions, negative demographic changes are already evident. Coal regions have a higher proportion of older people as due to low levels of employment; younger people are emigrating. The emigration of young people (under 30) is expected to affect most regions, as they will leave to seek better opportunities. The quantitative analysis confirmed this, with the exception of Silesia, most regions showed negative migration rates of young people. Strategies such as increasing the attractiveness of an area by providing high-quality education and reskilling opportunities can help to counter this trend. The examination of the TJTPs showed that many have gaps in identifying the impacts of the demographic transition, therefore more focus needs to be placed on how to mitigate the negative impacts on the social and demographic structures in the regions.

Environmental dimension

The just transition is expected to result in environmental benefits, such as reduction in the environmental degradation of the regions exposed to the polluting impacts of the fossil fuel industry. The TJTPs expect an overall positive impact for the pilot regions. The quantitative analysis confirmed this as dependence on fossil fuels decreased for all countries. The share of energy from renewables increased in all countries, as did the use of renewables for heating and cooling.

Final thoughts

The matrix tool was developed to enable a more nuanced understanding of the trends and challenges that the coal regions face in the energy transition. By applying the matrix tool to the pilot regions, it is clear they are all in different situations and will experience different challenges; there is no one size fits all solution. For just energy transitions to be successful, the needs of each region need to be understood and defined.

The indicators developed for this study can support and inform future policy and strategies implemented as part of the Territorial Just Transition Plans.

An important finding of the research was the limited data availability at the regional level. The researchers point out that without specific data, policies will be less robust, as they cannot be scientifically supported.

For a more in-depth discussion on the issues touched upon in this article, please read the full report and find out more about the regions and how the matrix tool can be replicated.