Scotland has a significant oil and gas sector in the North Sea. It is a major employer, contributing around five per cent of total Scottish GDP (2019), and accounts for around 90 per cent of the country’s total primary energy (2015) (Scottish Government 2022c). It also has some of the most ambitious greenhouse gas reduction commitments among advanced economies. The Scottish government’s planning for a just transition started in 2019, and it is now ramping up a national strategy for economic transformation, with specific plans for high-emitting industries. The energy sector is the first to be tackled. Swift progress on these plans will be critical for Scotland to meet its ambitious climate commitments and build a just transition.

Context

In 2019, the United Kingdom (U.K.) became the first major economy to establish and pass a legally binding target of net zero emissions by 2050. Scotland—a devolved regional government under the U.K.’s Westminster government—has made even more ambitious commitments: a 75 per cent reduction in greenhouse gas emissions by 2030 (relative to base year 1990), and net zero greenhouse gas      emissions by 2045. Just transition principles are baked into these targets. Scotland’s climate change plan calls for a rapid transformation across all sectors of the economy and society while “ensuring the journey is fair and creates a better future for everyone—regardless of where they live, what they do, and who they are” (Scottish Government 2022b). However, there is no planned phase out of oil and gas, but rather a commitment to continued exploration and production with the hope that investments in sustainable energy and carbon capture, utilization and storage (CCUS) technologies reduce sectoral emissions. 

Major industrial transitions are not a new phenomenon in Scotland. Poorly managed transitions in the coal sector in the 1980s led to entrenched inequalities in those regions decades on. The North Sea oil sector has experienced intermittent declines since the 1990s and jobs connected to the oil and gas industry have fallen nearly 40 per cent over the last five years alone (Oil and Gas U.K. 2021), further entrenching those inequalities. In 2017, the Just Transitions Partnership (JTP)—a coalition of unions and environmental NGOs—formed to advocate for a long-term, independent, focused commission with statutory authority to track and monitor the government’s Climate Bill and ensure its alignment with just transition principles. In response, the Scottish Government established a Just Transition Commission in 2019 for a two-year term to provide “practical, affordable, actionable” recommendations to Scottish ministers on how to achieve those principles. It also mandated that climate action targets align with just transition principles. 

Over their two-year term, the Just Transition Commission engaged the public and key stakeholders in meetings, town hall events, and site visits across Scotland. These were overarching conversations related to the whole of the economy and society. The Commission’s final report to the Scottish government was submitted in 2021 with four main recommendations:

1. Pursue an orderly, managed transition to net zero that creates benefits and opportunities for people across Scotland.
2. Equip people with the skills and education they need to benefit from Scotland’s transition to net      zero.
3. Empower and invigorate communities and strengthen local economies.
4. Share the benefits of climate action widely and ensure costs are distributed on the basis of ability to pay (Just Transition Commission 2021).

The Scottish government accepted the recommendations of the Commission in full and will create a national Just Transition Planning Framework to set out how it will transition to a net zero economy. The framework will include detailed plans for specific industries. A junior ministerial post—Minister for Just Transition, Employment, and Fair Work—has been created to coordinate these actions. A new, permanent, statutory Just Transition Commission will advise, monitor, and evaluate progress on key targets¹.

Policy response and transitions management

Developing a transition plan for the energy sector was the first priority. Like many jurisdictions, Canada included, Scotland’s target of reaching a net zero economy by 2045 exists alongside a commitment to “maximise oil and gas recovery” for the foreseeable future. Government financial support for oil and gas exploration and production is conditional on sustainable energy transition investments. It supports sequestration (CCUS technologies), alternative energy (hydrogen and hydrogen fuel cells), decommissioning oil and gas capacity, and helping workers transition to new jobs. 

A U.K.-wide Oil and Gas Industry Leadership Group (ILG) convenes private and public sector leaders to coordinate on these matters. The U.K.’s oil and gas industry group has created their own greenhouse gas reductions roadmap to 2035 with key actions in areas such as skills development, technology, and innovation and emissions reductions (Oil and Gas U.K. 2022). Scotland’s Just Transition Commission has noted that while these efforts are valuable, it is important that they are consistent with statutory emissions reductions targets (Just Transition Commission 2020). Devolved and reserved responsibilities make accountability challenging. For example, licensing for offshore oil and gas is a reserved matter for the UK government while onshore licensing and extraction was devolved to Scotland in 2016². There are also concerns that the industry-led plan does not adequately address workers. 

While these initiatives continue to ramp up, the sector is already transitioning. Declines in the price of crude oil from 2015-2020 have spurred employment losses; these have in turn been compounded by economic contraction due to the COVID-19 pandemic. Even when gas prices recovered in 2022 employment has not recovered to previous levels. There are some ongoing initiatives to address these shifts. The U.K. Government’s Oil and Gas Workforce Plan (2016) supports displaced workers through online jobs platforms that help them find work in other sectors that require similar skillsets³. Scotland’s recent (2020) climate change commitments include a C$165 million (£100 million) Green Jobs Fund, to support investment in low-carbon businesses, and a Green Workforce Academy—a hub for job seekers in green industries.

There are also high hopes that sustainable energy investments will support the labour transition. A recent report from Robert Gordon University estimates around 200,000 people will be needed in 2030 to develop the offshore wind, hydrogen, and CCUS industries, alongside existing oil and gas activities. However, investments in skills development and retraining have been limited to date and the focus on online services may have limited reach as not all employees are comfortable using them. 

Regional development is also critical to Scotland’s just transition response. Employment declines have disproportionately hit certain regions, such as Aberdeenshire in the northeast, where employment is highly concentrated in the offshore oil and gas sector. Post-Brexit, the U.K. and Scotland have needed to reinvent their regional development approaches. To date, Scotland has established a C$827 million (£500 million) regional development fund to support the energy transition in the northeast and Moray regions. This includes investment guarantees and loans to small- to-mid-sized firms. 

All Scottish regions now have city region and regional growth deals—agreements between the Scottish and U.K. Governments and local governments to support long-term economic growth. Some of these agreements also support just transition objectives. For example, under the Aberdeen City Region Deal (now in its fifth year), the Oil and Gas Technology Centre has been rebranded as a Net Zero Technology Centre and is shifting its focus to develop tools that can speed up the North Sea oil industry’s transition to net zero (Invest Aberdeen 2022). However, as city and regional deals have been developed separately from the Just Transition Planning Framework process, they do not all necessarily correspond to just transition objectives.      

Other initiatives that could be used to meet just transition objectives include expanding the U.K.’s “levelling up” agenda to Scotland—an approach that aims to boost investment in lagging regions and reduce territorial inequalities. Finally, the Scottish government plans to create “green freeports.” These are large, zoned areas with rail, sea, or airport links where operators and businesses benefit from tax and other incentives. To qualify, they need to support the “just transition to net zero emissions by 2045 and the creation of high-quality employment opportunities with good salaries and conditions” (Scottish Government 2022a). It represents an attempt to bake just transition concepts into business investment zones and to develop competitive clusters of manufacturing excellence in green technologies.

Progress to date

Scotland is only now implementing a Just Transition Framework and it is too soon to assess its impact. The new national framework approach, with ministerial accountability and an independent commission to advise and evaluate progress, appears to be a robust structure for such a complex and encompassing challenge. Already, there has been nation-wide engagements to facilitate dialogue, and stakeholders and rights holders were identified by the first Just Transition Commission. The Scottish government has also committed to this engagement and defines the just transition as both an outcome—a fairer, greener future for all—and a process that must be undertaken in partnership (Scottish Government 2021). It will be important that the new framework expands and strengthens the engagement of the first Just Transition Commission as it develops new sectoral just transition plans.

The U.K. has made considerable progress in reducing its greenhouse gas emissions. The Climate Action Tracker rates the U.K.’s overall progress as “almost sufficient”—with commitments that are consistent with keeping the average global temperature rise to below 2 degrees Celsius (Climate Action Tracker 2021). Scotland has decarbonised faster than the U.K. average, and the speed and scale of electricity sector decarbonisation has been the main reason for its progress (U.K. Climate Change Committee 2021). The Climate Change (Scotland) Act 2009 and the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 set annual emissions targets to ensure Scotland is on track to reach its net zero greenhouse gas emissions goal; there are independent annual reports from the U.K.’s Climate Change Committee tracking its progress. And, while Scotland is making progress, the committee’s latest (2021) assessment finds that Scotland is not doing enough on adaptation, which plays an important role in just transition processes (U.K. Climate Change Committee 2022).  

There are also contradictions in Scotland’s approach to transitioning the oil and gas sector, even though this is critical in meeting net zero targets. As previously mentioned, there is no timeline to end oil and gas exploration and production, creating significant uncertainty on the timing of the sector’s phase-out, which does not support a just transition approach. External factors, like the Russian invasion of Ukraine and the cancellation of the Nordstream 2 pipeline, could continue to put upward pressure on global oil and gas prices making new investments in the sector more attractive. 

It is also unclear how local community plans will be developed and whether they will align with broader sectoral reforms. Community-driven just transition plans that identify local assets and opportunities, and establish coalitions for action have yet to be developed. However, there is a framework that Scotland could use for this process. Regional Economic Partnerships are collaborations between local government, the private sector, education and skills providers, enterprise and skills agencies, NGOs, and civil society. The government has supported several to date and this format could be used to support regional just transition planning. The new permanent Just Transition Commission will likely play a role in monitoring distributional elements of justice—looking at how different groups benefit or experience impacts from the transition—to hold government to account.      

While initiatives are ongoing, the Just Transition Partnership that spurred the creation of Scotland’s first Just Transition Commission has expressed skepticism that the government’s approach is sufficient. In fact, they have described the lack of regional investment or local jobs in the renewables industry as “unjust” (Mercier 2020, 125). Their 2021 Manifesto called on the government to provide immediate support, through a Green Public Works program, to workers facing redundancy. This program would ensure that any government support to the private sector would include requirements for emissions reductions and job creation and establish clear targets for decarbonisation, investment, and job creation. It remains to be seen how these demands will be met (Just Transition Partnership 2020).

National trade unions and the Just Transition Partnership have both called for greater state intervention. The Partnership would like to see “state-led economic planning, and public ownership of energy and state investment in industrial policy such as manufacturing” (Mercier 2020, 125). The North Sea oil fields are geographically and equally divided between the U.K. and Norway, offering a study in contrasts of how to manage oil assets for a just transition⁴. On the U.K. side, Scotland’s North Sea state revenues stood at C$33.74 million (£22 million) in 2021, while Norway’s revenues were C$14.74 billion (£9 billion) for roughly the same production (McKay 2021). Norway’s oil industry is state-owned while the U.K.’s is privatised. Norway’s world-renowned sovereign wealth fund today stands at around C$1.69 trillion. The U.K. has no such Sovereign Wealth Fund, which could have been used to support a just transition⁵. The union and Partnership members view this as a missed opportunity and a setback to transition management. They advocate for much stronger public sector involvement, and even ownership in sustainable energy, to accelerate a just transition and ensure new high-quality jobs (Just Transition Partnership 2020, Prospect 2022). For example, the Scottish Trades Union Congress has argued that the recent private sector offshore wind development (17 ScotWind projects) would have delivered thousands more jobs had it been set up as a national Scottish energy company (Williams 2022).

Lessons for Canada

Scotland’s calls for a rapid transformation across all sectors of the economy and society are ambitious.  While outcomes largely remain to be seen, Scotland’s just transitions planning framework offers three      lessons for Canadian governments:       

• Define the scope and parameters of “just transition.” Just transition is a contested concept. The word means different things to different communities, stakeholders, and rights holders. The first Just Transition Commission’s national engagement efforts unpacked what “just transition” meant to different groups in order to reflect a wide range of views back to the Scottish government on the main priorities for action. This brings clarity to what is often an amorphous concept and can help establish common priorities.
• Concrete commitments relating to job retention, quality, and pay can help reduce the risks to transitioning workers. Key stakeholders are often looking for clear commitments from the public sector and industry to mediate the risk and potential harm associated with transition. For example, the Scottish government has indicated that public funding for climate action will be conditional on fair work terms, and is looking to apply real living wage criteria to non-departmental public bodies alongside fair work standards as a condition of public sector heat and energy efficiency contracts (Scottish Government 2021). A major concern of many energy workers is that the jobs that they may transition to will be of a lower quality and pay. Fair work and living pay standards are one way of addressing this. 
• Frameworks and accountability are necessary. Scotland set up a process to deliver on its just transition commitments. The national Just Transition Planning Framework will set out the objectives; sectoral plans will provide the details; the Minister for Just Transition will provide accountability; and the Just Transition Commission will advise, monitor, and evaluate. How “justice” is interpreted and applied in these contexts will be important, as will co-ordination between sectoral plans and regional development. How these groups ultimately work together is still developing, and their coordination will be critical for its success.

Conclusion

As a devolved government within the U.K., just transition initiatives in Scotland must be coordinated between levels of government. Scotland’s sectoral plans set a strong signal to the U.K. government on their priorities for investment. As sectoral plans roll out, the robustness and inclusivity of the government’s framework will be put to the test. This will continue to be an important country to watch. 

All opinions, errors, and omissions are the sole responsibility of the author.

¹ Among devolved U.K. governments, the Welsh Government has also created a new cabinet position, Minister for Climate Change, with responsibilities for decarbonising transport, the housing sector, and energy generation in 2021.

² Licensing of offshore oil and gas extraction is a reserved matter for the U.K. government as is the legislative competence for health and safety. The 2016 Scotland Act devolves the regime for licensing onshore exploration and extraction of oil and gas to Scotland (exploration).

³ The “Talent Retention Solution” U.K. web-based platform, puts skilled individuals looking for work and companies searching for new employees in direct contact with each other. A “Skills Connect” web-based tool supports the oil and gas sector experiencing skills shortages.

⁴ Norway has committed to reduce net emissions by 55 per cent by 2030, but the current government aims to continue oil and gas developments.

⁵ Arguably Norway is not doing this as their current government uses revenue from the fund for general purpose revenue; the country also aims to continue oil and gas developments.

In April 2018, the Government of New Zealand announced that no further offshore oil and gas exploration permits would be granted. This decision has the greatest impact on the Taranaki region in the west of New Zealand’s North Island. From the outset, the government has communicated a desire for a just transition–that is, a way to manage the process to support workers, maintain employment, and diversify and strengthen the economy to create a sustainable future for the whole region. This is a proactive approach in the sense that there is ample lead time to anticipate and plan for the transition. Key stakeholders at the regional and local levels have identified a roadmap to a low-emissions future. With support from the national government, they are working to implement transition action plans to determine how Taranaki can make a just transition to a low-carbon economy.

Context

The Government of New Zealand’s decision to stop issuing new permits for offshore oil and gas affects around a third of the country’s total active exploration permits¹. The oil and gas transition in New Zealand is phased: Existing offshore oil and gas exploration permits that have already been approved may operate until 2030 and existing producing fields can operate until 2050 (Government of New Zealand 2018b). There is no wholesale shift in the industry, and therefore time to plan for the transition ahead.

The phase out of new gas developments has the greatest impact in the Taranaki region where the majority of New Zealand’s offshore oil and gas investments are concentrated. Often called the “Texas of New Zealand,” Taranaki is a mountainous coastal region with a population of around 126,000 people. While the oil and gas sector directly employs only 750 people in the region (just over one per cent of total employment), the sector contributes an estimated 30 per cent of regional gross domestic product, which is why the region has the highest GDP per capita in the country (Ministry of Business, Innovation and Employment 2020; Parliamentary Commissioner for the Environment 2020)². As global demand for oil and gas declines in the low-carbon transition, the Taranaki region—its workers, communities, and economy—will be increasingly exposed to market volatility.

The decision to phase out oil and gas permits is part of the government’s broader climate commitments. In line with the 2015 Paris Agreement, New Zealand has committed to reducing net emissions by 50 per cent below gross 2005 levels by 2030³. Three sectoral shifts are important to realising these goals:

• electrifying end-uses (vehicles, buildings, industry) that currently burn fossil fuels across the economy;
• changing the structure and methods of agriculture production; and 
• reforestation (New Zealand Productivity Commission 2018).

The Cabinet has adopted a whole-of-government approach to climate change programs and just transition concepts are being incorporated into domestic legislation and policy (New Zealand Ministry for the Environment 2022a). For example, under the Climate Change Response Act (first published in 2002; updated in 2019), the government must take “into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities” (Government of New Zealand 2019). 

Independent Commissions such as the Productivity Commission and the He Pou a Rangi Climate Change Commission have provided recommendations to government on implementing and monitoring a just transition (Climate Change Commission 2022; New Zealand Productivity Commission 2018). New Zealand is also one of eight countries worldwide to have established a just transition commission or unit (Heffron 2021). In short, there is broad support for a just transition approach—the question is how to achieve it.

Policy response and transitions management

Having announced the oil and gas exploration phase out, the Government of New Zealand established a Just Transitions Unit (JTU) within the Ministry of Business, Innovation, and Employment in 2018 to support the transition process in the Taranaki region. The JTU has evolved over time, and presently has two teams—one focused on just transition partnerships for regional planning and another on understanding and modelling economy-wide transitions (e.g. transitions to a low-emissions economy and the future of work). The JTU forms a centre of expertise in government for managing transitions and forming partnerships.

The government also established a C$2.47 billion Provincial Growth Fund to support economic diversification and transition (Government of New Zealand 2018a) after announcing the phase out of oil and gas exploration. The Just Transitions Partnerships team helps coordinate with other government ministries to identify funding opportunities and fill in gaps where there are no other alternatives. They work on a case-by-case basis as needed to coordinate across the public service. 

Leading practices on just transition emphasize the importance of public engagement and social dialogue (Krawchenko 2020). The JTU approach was broadly consistent with this approach—facilitating a wide-ranging dialogue on how the region could manage the just transition to a low-carbon economy. The resulting Taranaki Roadmap 2050 was produced by Venture Taranaki, the local economic development agency, and was co-created with communities, iwi (Māori nation/peoples), local and central government, businesses, educators, unions, and workers. It was developed with input from 29 workshops on 12 transition topics, surveys and community outreach, a creative challenge, and youth engagement. Public consultation on the draft report included visits to more than 40 locations with over 1,000 people. Twenty volunteers led the process, and the final report was released in 2019. This process was more than engagement—it sought social consensus to galvanise action on implementation. 

The Roadmap identifies 12 Transition Pathways to diversify and strengthen the local/regional economy. Some pathways relate to sectors (e.g. tourism); some are enablers (e.g. the regulatory environment); and some are both (e.g. energy, infrastructure, and transport). The development of the Māori economy is one of the most significant and impactful pathways. There is an Action Plan for each Transition Pathway. The Roadmap and Action Plans were developed by volunteers and funded by the national government and the private sector. 

The Taranaki region’s just transition process is not without its detractors, however. While new offshore oil and gas exploration permits have been shelved, there remains an active on-shore industry. The Climate Action Tracker rates New Zealand’s actions so far as “highly insufficient”–on track for a greater than 4 Celsius world (Climate Action Tracker 2022). New Zealand continues to grant onshore oil and gas permits which make up two-thirds of their oil industry (Ministry of Business, Innovation and Employment 2022).

How will this broad regional dialogue on a just transition translate into implementation? This is yet to be seen as the implementation process is in its early stages. However, each Action Plan identifies a coordination network, the requisite resources, and specific projects for implementation. It includes corresponding budgetary requests to the central government for resources as it is supporting the Taranaki Roadmap through the Provincial Growth Fund. There is also an understanding that private sector funding will be leveraged.  

The Roadmap also identifies employee-oriented supports as being important, one of the most common elements of just transition policies in advanced economies (T. A. Krawchenko and Gordon 2021). While the overall just transition response to the oil and gas phase out in Taranaki has focused on economic diversification and regional development, there are specific supports for workers such as active labour market policies, particularly skills retraining programs. Some supports are funded through demand-led government services such as the tertiary education system, as well as active labour market programs, funded through the Ministry of Social Development. However, there have not yet been any substantial employment losses in the Taranaki region in the sector, so how this aspect of the transition will be managed and supported remains to be seen. The government, Business New Zealand (the national business association), and the New Zealand Council of Trade Unions (CTU) are jointly designing a Social Unemployment Insurance scheme that would support workers to retain about 80 per cent of their income for a period after they lose their jobs (Government of New Zealand 2022a). This is a possible pathway for support in the future. The approach is to strengthen and diversify the economy so that      displaced workers will find good employment and be able to maintain quality of life after the transition. 

Trade unions have been actively involved in just transition planning—both in the region and nationally.  For example, in the “People and Talent” pathway Action Plan, labour unions “have secured a focus on the support and empowerment of workers during transition, including job clustering, analysis of retraining opportunities and skills audits of the workforce” (International Trade Union Confederation 2021). The labour union E Tū is negotiating roles and responsibilities between government, employers, and employees for such supports and they are establishing multi-employer redeployment schemes (International Trade Union Confederation 2021).

Investments in energy development are also a central part of Taranaki’s future transformation and linked to a just transition. New developments in this sector have the potential to provide employment to former oil and gas workers and generate new employment opportunities for the region. Taranaki’s Energy Action Plan envisions a mix of renewable sources (Venture Taranaki 2019). At present, the Patea Hydro development is the largest renewable energy project in the Taranaki region, but there is limited potential for hydro expansion. Wind technology is commercially viable in New Zealand and two onshore wind farms are in development, but there are no offshore wind farms in New Zealand. There is limited use of small scale solar and grid-scale solar with some potential to scale these up alongside potential for wave, bioenergy, and geothermal energy. Unlike Denmark, which has focused solely on developing a wind industry, there is no single or clear direction for clean energy investments for Taranaki, rather, a range of technologies are being considered. Given this energy landscape, it is challenging to understand the employment and skills training needs of the future. 

To help develop and scale renewable energy investments, a centre for future energy development, Ara Ake, was established in 2020. The impetus for its creation stems from Taranaki’s regional development strategy (Tapuae Roa Strategy 2017) and the Taranaki Roadmap 2050. With NZ$27 million (C$23 million) in funding from the national government, the centre is leading research and the development of clean energy technologies such as wind and wave power, and geothermal and hydrogen-based energy, which will then be co-funded with the private sector and central government. It also forms a centre of expertise on diversifying land use to grow more crops, such as quinoa, and support reforestation. These actions align with national climate commitments and help the region to envision the economy of the future.

Progress to date

Taranaki is still in the early stages of phasing out offshore oil and gas. Yet the Action Plans lay out several principles for monitoring progress that align with the broader academic literature on just transition. It defines justice in distributional, recognitional, and procedural terms. Distributional justice is concerned with how different groups benefit or experience impacts from the transition; recognitional justice identifies stakeholders and rights holders who may be implicated; and procedural justice is concerned with elements of governance—who is included and how (Stevis and Felli 2014). The Taranaki Roadmap process has been careful to include recognitional and procedural elements of justice from the onset, and these will continue to be important for implementation. Distributional elements of justice can be challenging to capture and have a longer time frame. The Taranaki Roadmap’s robust monitoring and evaluation approach should help to understand and track distributional justice outcomes.

In addition, metrics and evaluation are baked into the Taranaki Roadmap process. They form the 12th Transition Pathway Action Plan and as such, have been a part of the same engagement and design processes. This is novel in the sense that the indicators of success have been designed upfront and from a variety of perspectives. Māori worldviews of well-being and success are integrated into the Taranaki 2050 metrics framework. Outcomes are assessed in annual public-facing updates and reviewed every two years, with a detailed review every five years. 

What has been achieved to date? Having been adopted in 2019, implementation of the Roadmap is in the early stages. A 2021 progress report showed that 85 actions are complete or underway, 38 are partly underway, and 43 actions remain (Tapuae Roa 2021). For example, on the energy front, a wind-to-hydrogen and green ammonia project has been developed as well as hydrogen production and refuelling stations at existing truck stops. On training and innovation, an iwi Trust (Te Kāhui Maru Trust) is creating an environmental workforce development training program, and the local technology institute is establishing new flexible courses to support workers in transition and programs on Māori enterprise. A wide range of actions related to diversifying and decarbonising the economy and preparing workers are underway. Of those that have been completed to date, the majority relate to tourism and infrastructure and transport. Longer term, there is a framework in place to measure and report on outcomes through specific metrics, well-being indicators, and alternate metrics such as self-reported job satisfaction. 

It is also unclear whether local and regional organizations are resourced well enough to implement the ambitious Action Plans. As the process moves on from consensus building, it increasingly needs to address costs and trade-offs, and will need public and private sector funding to accelerate actions. New Zealand is in the process of developing a National Emissions Reduction Plan and National Adaptation Plan which will include an Equitable Transitions Strategy (Government of New Zealand 2022b; New Zealand Ministry for the Environment 2022b). This process will expand the just transition approach across the national economy. 

Lessons for Canada

New Zealand is a unitary state (i.e. a centralized government) and often referred to as the world’s quickest legislators, with its single legislative body and elections every three years. Although the scale of the energy transition in New Zealand is, to date, relatively small, and it differs in many ways from Canada, there are leading practices relevant for our own oil and gas economies. 

• Proactive planning. Global transitions in the fossil fuel sector have often been reactive—with initiatives being put in place once an industry is already in decline. New Zealand’s phase out of oil and gas activities has been proactive and has a long lead time. There is also a dedicated government unit to support the process and co-ordinate across government, an approach that leads to the development of robust strategies.            
• Regional development. A key question in any region is what it will transition toward as global demand for fossil fuels declines. The place-based approach in Taranaki, grounded in understanding the local/regional economy, identifies assets and opportunities, and supports coalition-building for implementation. 
• Inclusive by design. Justice is about how rights holders and stakeholders are included and impacted by transitions. The Taranaki Roadmap’s seven “Pou” (pillars) framework engages communities, iwi (Māori tribes), local and central government, businesses, educators, unions and workers. Like Canada, New Zealand’s First Peoples—the Māori—are key rights holders for a just transition. Both the national government and labour unions recognise this. Active involvement of iwi and hapū (clan) is the first principle for a just transition in the various labour unions (New Zealand Council of Trade Unions 2017). While engagement with local iwi and the Māori economy were both key priorities in Taranaki’s transition, the process was not perfect—in particular, some of the early engagement needed deeper cultural competency. This is a learning that the New Zealand Government has taken on and is working to address (Ministry of Business, Innovation and Employment 2021). As iwi, hapū, and Māori organisations are regularly asked to contribute and engage, they need to be adequately resourced to take on this work. Many Māori-owned businesses are in transition-vulnerable sectors and more research is needed on Māori land, land use change, and social and cultural impacts (Whetu 2020).

Conclusion

The Taranaki region’s just transition planning process embraces many of the leading practices in the literature. It is consensus-seeking, grounded in the regional economy, inclusive, and future-oriented. The question remains, however, will it be enough? Will the initiatives deliver a diversified economy and good jobs, and will they effectively decarbonise the economy? Is the pace of the transition fast enough if global demand for oil and gas declines faster than expected? Delivering on the Taranaki Framework depends to a large extent on the network of regional organizations—local and regional governments, unions, businesses, educational institutions, non-profit organisations, and civil society more broadly. The national government is providing important supports, but local networks and people are leading actions and implementation and will collectively determine the region’s future. To date, the government’s commitments to phasing out oil and gas only pertain to the offshore oil and gas industry; onshore oil and gas production represents around two thirds of the industry. Concrete plans are needed to address onshore oil and gas phase outs in order to meet climate commitments and support a just transition. 

The author gratefully acknowledges Isabella Crawford and Nick Montague, Just Transitions Partnerships, and the New Zealand Ministry of Business, Innovation, and Employment, for providing content and review. All opinions, errors, and omissions are the sole responsibility of the author.

¹ 71 per cent or 22 out of a total of 31 oil and gas permits.

² In total, around 4,700 people are directly employed by the oil and gas sector in New Zealand and it provides around $170 million in royalties to the government each year (Government of New Zealand 2018a).

³ This equates to a 41 per cent reduction on 2005 levels using what is known as an “emissions budget”      approach.