Governing the Just Transition

In previous blog posts, we’ve considered what a just transition is and what such a transition might look like in Wales. In the final blog post of this series, we consider the potential role of governance in realising a Just Transition in Wales.

Government is typically seen as the major authority in directing policy action. Armed with its traditional legislative and regulatory authority, government can foster major economic and social changes, including decarbonisation. On a more abstract level, governmental authority can be justified in terms of advancing the collective goals of a society. Therefore, government will be a key actor in promoting a just transition.

In Wales, the Welsh Government possesses some but not all authority concerning decarbonisation. It holds legislative authority over environmental affairs as well as other areas directly or indirectly implicated in decarbonisation (for example energy and natural resources). While its capacity for revenue generation, and thus one avenue for direct economic redistribution, is limited, it holds discretion over key expenditures, including economic development, housing, agriculture, transport, and local government. In achieving a just transition, these areas of responsibility might provide key leverage points. The Welsh Government can consider which specific sectors, workers, and communities will be disproportionately affected by the transition to a low-carbon economy and design specifically tailored programmes to help offset these distributive impacts.

Yet considerations of the role of government should not only focus on the ability of Welsh Government to deliver its policy objectives through direct ways of working, such as regulation, fiscal powers and its power of purchase.  Beyond these traditional means, it is helpful to think about other potential roles that government can play in promoting decarbonisation.

Unlike traditional governing, ‘governance’ recognises the role of state and non-state actors in driving policy action and societal change. Governments can provide direction but do not necessarily lead. Governments can foster change more indirectly by coordinating, enabling, or facilitating action at the individual, community, or sectoral level. Governments, for example, can convene stakeholders, helping bring key actors together. The decision by the Welsh Government to hold an annual climate change conference is a clear example of this coordinating capacity. These indirect modes of governance are particularly useful when governmental authority, capacity or knowledge is more limited. Even in cases where Welsh Government lacks legislative authority, it might be able to drive changes through other policy levers. These efforts might also be particularly effective in spurring action at a higher level than Welsh Government’s legislative role, for example by influencing UK or global climate decisions, or at a lower level through influencing individual choices or the behaviour of certain economic sectors. The ways in which government can influence and change the behaviours of others, and achieve policy aims through indirect as well as direct methods, have recently been set out by the UK government’s Policy Lab in their work on ‘Government as a System’.

The Government’s current decarbonisation plan ‘‘Prosperity for All: A Low Carbon Wales’ illustrates the varied approach it is taking to climate governance. The document sets out 100 different policies and proposals for delivering decarbonisation. In some instances, policies are ‘top-down’ measures that are mandated by government (for example plan to phase out unbated coal). In other instances, however, the effort is more bottom-up, being driven by local actors and communities (for example promoting local ownership of energy generation). Using combinations of top-down, bottom-up, direct and indirect modes of governance will be critical for mobilising the knowledge and capacities of different groups across Wales.

So far, we have considered the varying capacities of government to promote decarbonisation but exactly how can Wales ensure that a ‘just transition’ becomes embedded into such approaches?

The Welsh Government possesses some novel institutional structures that might be particularly instructive moving forward. The Well-Being of Future Generation Act (WFGA) is one key example.  The legislation not only attempts to incorporate notions of socio-economic, spatial and environmental justice in decision-making but also intergenerational justice. The WFGA can provide proponents of a ‘just transition’ with a clear legislative basis for embedding principles of equity and fairness into decarbonisation efforts.

Finally, Wales is not confronting the challenge of a ‘just transition’ alone. The transboundary nature of climate has long been regarded as a barrier to policy coordination. However, the flip side of this is that governments across the globe are experimenting with different governance approaches. The Welsh Government can look to the range of governance approaches being adopted elsewhere. For example, the Spanish government recently announced a €250 million transition deal for coal workers. In Canada, to help facilitate its phase-out of coal, the federal government created the Just Transition Task Force for Canadian Coal Power Workers and Communities. Similarly, Scottish government recently launched the Just Transition Commission. In all these cases, governments have avoided top-down measures, convening key stakeholders to collectively manage these major but politically challenging transitions. These varying governance models could provide important lessons for Wales as it seeks to manage its social, economic and spatial challenges.