The challenge of just transition in China’s coal power sector: a city-level employment vulnerability assessment

Abstract

ABSTRACT China’s target to achieve carbon neutrality by 2060 entails the phase-out of high-emissions coal power. However, a just transition policy must be implemented, given that coal power and its upstream coal mining industry provide many employment opportunities. Leveraging a bottom-up tabular analysis, we assessed the impact on employment of coal-fired power plant closures in China’s 330 prefecture-level cities. We identify vulnerable areas for employment in the transition and propose a customized employment incentive policy through a vulnerability assessment framework. Results show that in 2020, the direct employment in the coal power industry was 1.68 million, among which 16.76% will be affected by the 2045 net-zero deadline for the power sector. This number will increase to 36.90% if coal power capacity increases to 1300GW by 2030. However, 92% of Chinese cities will not suffer from unemployment risks since cities with high employment vulnerability are mostly concentrated in coal resource-based cities like Shuozhou (Shanxi Province), Huainan (Anhui Province), and Yulin (Shaanxi Province). In addition, the contraction of China's coal power-related employment will emerge only after 2035; a transition management framework focusing on highly vulnerable areas should be established as soon as possible to protect the well-being of affected workers and facilitate a just transition. Key policy insights New coal power projects should be cut back as much as possible, and instead the service life of incumbent coal power units should be extended where necessary. If no new coal power plants are built after 2020, only 16.76% of existing employment will be affected by 2045, but the share would double if new units were added. In order to effectively manage a just transition, it is necessary to plan early and establish a comprehensive policy system that takes regional differences fully into account.