Just and Not so Just Transition

Today Just Transition is a hot topic of discussion and action. Just Transition (JT)  featured strongly at the COP26 and COP27 with leadership taken by the International Labor Organization (ILO).

ILO defines  JT as greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind. The context is to the millions of coal mine workers who may lose their livelihoods as coal mines may progressively shut down as we will move towards a fossil-free world or NetZero. Same will be the case when Electric Vehicles (EVs) will propagate and millions of people engaged with the conventional internal combustion (IC) based automobile “ecosystem” will lose their jobs and so the associated small businesses. Similarly with transition to climate smart agriculture, traditional agricultural workers and businesses will have adverse impacts in coping up with the new value chains.

The international community has therefore asked for finance and massive skill building effort so that the affected communities (especially the vulnerable groups) will have a decent and responsible social protection. Today, several NGOs have taken JT as a mission.

It was a Sunday. I found that my alarm clock (that was presented to me by my father years ago) had stopped working. I decided to go to my usual clock repairing shop to get it fixed. I am always sentimental about keeping with me such treasures. When I spoke about this to my Wife, she said “Dr Modak, please be more contemporary and stylish. Say that you believe in product life extension rather than saying that you want to keep with you the old stuff”. I thought she was right. Now I must learn the new lingo of circular economy.

The alarm clock repairs shop was closed. There was a big board outside. The Board said that the Global Associations on Alarm Clock makers and repairers demand a JT and want to raise an alarm to the UN General Assembly. The Associations were upset with the innovations of multifunctional mobile phones that made alarm clocks redundant. This ask for financing JT was wholeheartedly supported by Global Association of Watch Makers and Repairers, Camera Makers and Repairers, Music System Makers and Repairers and many more. The demand was that all giant mobile phone makers such as Apple, Samsung, Nokia etc. must set up a Global Fund to support JT to the millions of people who have become and are becoming jobless. This protest and demand for JT finance sounded remarkably familiar. Clearly the discussions on JT in the climate space were now zeroing on the ground to millions of those who were facing an Unjust Transition (UT)

When I spoke about the UT to my Professor Friend, he was not surprised. He said that for centuries. waves of innovation have been around causing disruptions to quite some in the society. Nobody makes floppy and pen drives now. The tailor community has significantly suffered due to readymade garments that are now available in customizable formats. On line travel booking has wiped of the businesses of travel agents and the e-commerce has led to elimination of millions of small grocery stores.  According to Professor, the number of people facing UT could be much more than those asking for JT due to energy transition.

He lighted his cigar and said. “Dr Modak, there is a difference between JT and the UT”. I pulled the ashtray close to him.

“Dr Modak, the adverse social impact due to NetZero transition will take next 30 years and this long time frame will give us an opportunity to set the transition to do something Just. The UT however happens over much shorter time (few years) with not much time, it is rather unpredictable and happens in spurts. So, there is no time enough for any preparedness or providing support. By the way, UT is never discussed by the International Bodies, Governments, Businesses and Investors and the unjust transition is left to the “market”.

I thought he made a very important point.

I argued that we should not forget that transition to NetZero is also leading to creation of new jobs and new businesses. Employment in the renewable energy sector is growing in multifold. Companies manufacturing EVs are growing to provide new jobs. I gave many more just encouraging examples.

I ended up saying “So all in all – some will lose jobs while some were bound to gain,  perhaps leading to a NetZero in sum.”

Professor smiled and said “Dr Modak, remember that those who will lose the jobs are not the same as those who will gain! Don’t look at UT (or JT) as some algebra”.

Once again, he was absolutely right.

I continued to ponder on the less discussed UT that we all have been silent about.

Today, disruptive technologies include areas such as Autonomous vehicles, Advanced robotics with senses, Artificial intelligence and machine learning, Advanced materials, Gene editing, Spatial computing — augmented reality, virtual reality, Synthetic Biology etc. Though the term ‘disruptive technologies’ is relatively new, the competitive effect of such innovations is much older.

Take an example. Until the 1970s most of the world’s steel was made by large, integrated steel companies, that served all types of customers from users of high-end sheet steel to low-end ‘rebar’ steel for reinforcing cement. However, other manufacturers began to use minimill technology to enter the steel market, melting scrap metal in electric furnaces to produce steel more cheaply than the integrated companies. At first, minimills could only sell to the rebar market, and the integrated steel mills let rebar customers go in order to concentrate on the more profitable high-quality steel. But as their technology advanced, minimills were able to progress producing higher quality steel, encroaching further on the market served by integrated steel mills. Several integrated steel mills went bankrupt as their customer base was reduced to the high-end, low volume segments. So, while the industry got restructured, there was a significant economic and social impact. (Taken from LEK Consulting report). But did the Government and investors care? The transition was more of a transformation due to technology and market economics.

Today, we know about technology assessment and impact assessment. What is missing is a form of midstream governance, which Hasselbalch labels as “innovation assessment”. A silent Unjust Transition will continue to happen and will never be addressed. Should the support to UT be innovators responsibility? May be this ask is rather too much. Wouldn’t you agree?

After Professor left, I briefed the Wife about our conversation. After listening to me, she said that we all must follow wasteful lifestyles and increase our waste generation and littering rates. When she saw me shocked, she said “Oh Dr Modak, wont you like to protect livelihoods of millions of waste pickers across the world?  You don’t want UT but a JT. Right?”

This time I didn’t know whether she was right.

Image sourced from https://mindyourmind.ca/wellness/coping-change-and-transition

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