BY MARILEN MARTIN
Marilen Martin is a second-year MAIR student and Senior-Editor with Perspectives. She is from Berlin, Germany, and is concentrating her studies on the Political Economy of Climate Change. Having earned her Bachelor’s degree in International Relations in Dresden, Germany, she has worked and lived in Ukraine, Russia, and China. With a passion for writing and editing, Marilen worked as a freelance journalist for the German public television broadcaster ZDF.
Introduction
Poland, a nation that produces 97 percent of Europe’s hard coal, stands at a crucial crossroads after its recent elections. While much of the discourse surrounding a just transition away from coal revolves around the impact on coal miners and their employment prospects, a critical aspect often overlooked is the mounting costs associated with delaying an inevitable phase-out. These costs extend far beyond the mining communities, affecting low-income households and the nation as a whole due to rising electricity prices. As Poland grapples with the necessity of a comprehensive and equitable phase-out strategy for coal workers, it also has to mitigate the high economic and social costs of delay. The recent elections in Poland present a unique window of opportunity for a more near-term pivot towards renewable energy sources. If Poland’s opposition parties move the energy transition forward with more urgency, they could foster a more just and sustainable future that takes into account the long-term welfare of the entire population.
Vote for Change
In Poland’s recent elections, over sixty percent voted against the ruling PiS party (Prawo i Sprawiedliwość, or “Law and Justice”). While PiS gained the most votes, the leading opposition parties refused to form a coalition with the PiS to oust it from power, paving the way for a coalition of the three largest opposition party lists. This sets the stage for a monumental shift in power after eight years of PiS rule in which the party entrenched itself in the judiciary, media, and various other sectors of government and society. A new government will decisively shape Poland’s energy and climate trajectory. Although energy and climate issues took a backseat in an election framed as “PiS versus the rest,” power changes raise hopes for more ambitious action geared toward decarbonization. Despite each group’s differences, the three biggest opposition parties share a commitment to expanding renewables.
A Shift Towards Renewables, But What About Coal?
The big question mark is whether a new government will be willing to speed up the coal phase-out, which is currently scheduled for completion in 2049. Despite a significant reduction from 70 percent in 1990, coal still constitutes nearly half of Poland’s energy supply. The PiS government has long delayed an ambitious coal phase-out, as coal enables energy sovereignty for the country. PiS leader Jarosław Kaczyński even likened the EU’s “Fit for 55” plan, aimed at reducing emissions by 55 percent by 2030, to “green communism,” a term loaded with historical significance in the former Soviet Bloc country.
While the PiS opposition exhibits an increased ambition to decarbonize, a swift end to the coal industry is not guaranteed. The coalition’s various party lists represent divergent visions of the future energy mix, making the coal phase-out a contentious issue. Some regions still rely heavily on coal mining for employment, setting the stage for a fraught transition. The impact of a coal phase-out varies by region, with those close to coal mines, like Katowice in Poland’s South, facing a formidable structural transformation. Addressing this challenge involves not only navigating workforce transitions, but also creating new economic opportunities in affected regions.
Nonetheless, Poland can surmount this challenge. The coal mining sector has seen its workforce dwindle from 400,000 in 1990 to 75,000 in 2022. Now, the transition will affect significantly fewer workers. To support the remaining coal workers, Poland can create safety nets such as early retirements and one-time payments, as well as skills training for employment in renewables. This would open up higher-paid and more plentiful job opportunities, such as those offered by solar PV installations, which have a higher labor-intensity than coal. Predictions suggest that the green transition will create approximately 300,000 new jobs by 2050, many of which will be higher-quality jobs than those in non-renewable energy sectors. Poland is already leading Europe’s battery production and hosts the continent’s largest energy storage factory.
Furthermore, noteworthy is the considerable portion of Poland’s population that has adopted solar PV for personal electricity consumption, totaling 1.28 million people. Despite limited government support, two-thirds of respondents in a recent poll expressed a desire for a swifter energy transition, indicating popular support for a speedier phase-out.
Beyond Coal
Within Poland’s narrative of a just transition, focus is often directed at the coal labor force. Yet, the entire economy suffers from a postponed transition.
A continued reliance on fossil fuels implies surging energy production costs, as CO2 prices within the EU Emission Trading System will continue to rise. Since Poland must purchase allowances for its emissions from other member states, continuing coal production will squeeze the economy. Coal subsidies from 1990 to 2020 amounted to nearly €31 billion, and the country had to spend approximately €7.1 billion just last year to purchase emission allowances. A report from Instrat predicts that maintaining the current policy trajectory developed by the PiS government would result in a 61 percent increase in energy generation costs by 2030 compared to 2021. Increasing CO2 prices make phasing out coal not just an environmental imperative, but also an economic necessity.
Crucially, spiraling electricity costs have regressive effects which disproportionately impact poorer households. Although higher-income households consume more energy, low-income households spend a relatively higher share of their income on electricity. Even if energy firms do not hand down 100 percent of future cost increases to consumers, a 61 percent increase in production costs will not go unfelt. The government could counteract the negative effects on low-income households by substituting energy or introducing price caps, but this would further constrict the budget. To avoid increasing the economic burden on low-income residents, it is necessary to switch to alternative energy sources that are less polluting and thus cheaper in the long term. A speedier coal phase-out, coupled with effective support systems for workers directly impacted, offers the best chance at achieving a more just transition.
The good news is that Poland’s government will not have to drive the transition to renewables alone. As rising CO2 prices make coal less economically viable and Aurora Energy Research projects a loss of 23 GW in coal capacity by 2030, investments in renewables have become even more attractive. A new, more democratically-oriented government, has further increased investor confidence. Immediately after Poland’s election results came out, Bloomberg reported an upward trend for the Polish Złoty and the Warsaw stock market. Meanwhile, the opposition coalition led by former European Council president Donald Tusk could set the country on better terms with the EU. This raises hopes for the release of Poland’s €35 billion share of the EU’s National Reconstruction Plan Fund, to be used to accelerate the build-up of renewables. The EU has withheld this share of the fund to put pressure on the PiS to reverse decisions that impede the independence of the judiciary. A new government could restore the trust in the democratic institutions of the country.
Conclusion
As Poland stands at a crossroads, it is essential that the supporters of a just transition expand their focus beyond the coal workers directly affected by the phase-out to consider the long-term reality of rising electricity prices for all citizens. Poland’s journey toward a greener future is not merely about closing coal mines, but ensuring a clean environment and stable energy prices for everyone. Recent elections, coupled with economic realities, create conditions ripe for such an approach to prevail.
Photo Credit: djedzura, Getty Images, Licensed with Canva Pro