HomeGreening the economyWhat does the cost of living crisis mean for the just transition?

What does the cost of living crisis mean for the just transition?

I’ve been asked two interesting questions this week. The first was from someone who works in government, that given bumper profits for the oil and gas industry, why can’t we just leave fossil fuel workers to market forces? The second from the climate sector, who asked if the current crisis will have damaged people’s views on the just transition? Two different angles, but fundamentally questioning whether we need to refresh our approach to the just transition.

The gas crisis has clearly hit people’s views of energy firms. As Green Alliance polling found, the public overwhelming supported a windfall tax, even among normally sceptical Conservative voters. A significant number also blame the industry and specifically profiteering for the prices they are going to have to pay.

But this isn’t the same as whether the public has changed their view of workers within the oil and gas industry. Previous evidence suggests the British public overwhelmingly support a just transition for sectors affected by decarbonisation. UK oil and gas workers are the most emblematic of those. The political spectre of the transition away from coal and manufacturing looms large in the British political memory and has meant both Labour and Conservatives talking about a just transition for North Sea oil and gas workers.

Why a just transition for North Sea workers matters
The counter argument is that oil and gas workers are well-paid and highly skilled. This is undoubtedly because these jobs can be dangerous, but during the pandemic so too were many others who didn’t see the same level of reward. The sector is also heavily unionised and pushing for better pay and conditions. This strong union voice is one of the reasons a just transition is so prominent, with unions looking out for the future of their members.

But an ill-intentioned politician amid a cost of living crisis and a summer of strikes could seek to turn opinion against this group. Why should those better off deserve so much political attention?

Firstly, this is an industry directly affected by government policy. Yes, net zero is driven by the need to deal with  climate change, but government as the provider of security to its citizens has a duty to manage the impact of their policies regardless.

Secondly, the UK oil and gas sector plays a symbolic role in the transition. Government analysis puts job losses in the sector at 13,000 between now and 2050. Ending North Sea licencing immediately would add a further 9,400 to that. That’s 800 jobs per year. For context, 33,700 jobs were shed during the pandemic alone. The business department thinks that just 15,000 new jobs in green energy would be a viable alternative for those workers – the net zero strategy promised hundreds of thousands.

Demonstrating that net zero means progress
The faster we move to green energy the more front-loaded those job losses will come, putting an emphasis on retraining over retirement. And yes, we should be pushing and pulling profitable companies to do the bulk of interventions, but even if the state took it all on this is an eminently manageable issue.

But the reason this shouldn’t be left purely to the market is more political. The transition only works with not just public consent, but public confidence. We need to demonstrate visibly that net zero means progress to people. If the public sees that government has fallen at the first hurdle, what trust will they have that they will cope with thornier issues that involve individual behaviour change, such as driving less or reducing meat consumption?

We know that work in green energy will be abundant, and highly skilled, but to instil confidence government will also need to ensure green work is good work. The next wave of the transition won’t be about individual economic sectors , but about occupations within sectors – predominantly those with specific, more vocational skills. People, who as our focus groups show, prioritise security, conditions and pay above all. Continuing high levels of unionisation in new energy forms will be central.

You could spin the politics of the just transition as handouts to a specific group, in a specific place in the hope they and their communities will remember come election day. But a politician’s job is not just to sell a series of narrow retail policies for disparate groups. It is to create empathy between groups that tells a story of what you or your government are trying to achieve.

The cost of living crisis should be an opportunity to create that empathy. The volatility of oil and gas, and the need to move away is not just something that workers in that industry feel, but people across the country too. The rollout of green energy is no longer a regional industrial priority, but a national one. The crisis could hurt the just transition, but only if politicians choose to.

For more on this issue listen to our podcast interview with Paul Nowak, incoming general secretary of the Trade Union Congress.

Written by

Sam leads Green Alliance's Green Renewal programme, part of the Greening the Economy theme, aiming to put actions that meet our climate objectives and restore nature at the heart of our Covid-19 economic recovery. He is also a member of Chatham House’s Panel of Young Advisors, advising on youth strategy and climate. Before joining Green Alliance Sam was a Senior Advisor to Tony Blair, as well as a leading on Brexit and Industrial Strategy for the Wellcome Trust. Prior to this he worked for the Shadow Treasury team in Parliament. Outside of work Sam is a school governor, charity trustee and mentor with the Social Mobility Foundation. He holds a MSc in Climate Change.