Compensating affected parties necessary for rapid coal phase-out but expensive if extended to major emitters

L. Nacke, V. Vinichenko, A. Cherp, A. Jakhmola & J. Jewell. (2024). Compensating affected parties necessary for rapid coal phase-out but expensive if extended to major emitters. Nature Communications 15, 3742. Open Access. DOI: https://doi.org/10.1038/s41467-024-47667-w

Coal power phase-out is critical for climate mitigation, yet it harms workers, companies, and coal-dependent regions. We find that more than half of countries that pledge coal phase-out have “just transition” policies which compensate these actors. Compensation is larger in countries with more ambitious coal phase-out pledges and most commonly directed to national and regional governments or companies, with a small share going directly to workers. Globally, compensation amounts to over $200 billion (uncertainty 163-258), about half of which is funded through international schemes, mostly through Just Energy Transition Partnerships and the European Union Just Transition Fund. If similar transfers are extended to China and India to phase out coal in line with the Paris temperature targets, compensation flows could become larger than current international climate financing. Our findings highlight that the socio-political acceptance of coal phase-out has a tangible economic component which should be factored into assessing the feasibility of achieving climate targets.

Accelerating technology growth through policy interventions: the case of onshore wind in Germany

L.Nacke, A.Cherp, J.Jewell (pre-print). Accelerating technology growth through policy interventions: the case of onshore wind in Germany. POLET Working Paper Series 24-3

ABSTRACT

Climate change mitigation requires sustained and rapid growth of renewables such as wind and solar PV to decarbonise electricity systems. This is mirrored in recent policy commitments, such as the goal to triple global renewabels deployment, or national targets such as Germany’s ambition to triple the speed of renewables deployment. A natural question following from such targets is: How difficult (or easy) is it to achieve and sustain such rapid renewables growth – what type and strength of policy interventions are required? Through a combined analysis of technology growth models and policy interventions we show that the number and diversity of policy interventions increases with increased deployment of wind power in Germany. We also show that the financial compensation for new wind power has not been declining as fast as costs of wind power technology. This indicates that prolonged growth of mature low-carbon technologies may require increasing rather than decreasing policy effort in spite of technological innovation and cost decline.

Link to pre-print