National and local labor impacts of coal phase-out scenarios in Chile

Abstract

Phasing out coal-fired power plants is one of the most urgent steps needed to achieve the 1.5- or 2-degree target in the Paris Agreement. Many developed and developing countries have announced their plans to phase out coal from their electricity sectors. Managing the social and economic impacts of this energy transition is key to achieving political and social acceptability and pursuing environmental and social development hand in hand. As one of the leading countries committed to decarbonization in Latin America, Chile has launched a plan to phase out coal by 2050. To analyze the impacts of phasing out coal in Chile on jobs and value added, we combined an Input-Output analysis with ad-hoc labor surveys. We analyzed four contrasting electricity production scenarios that the Chilean government used to frame the policy debate: the current Long-Term Energy Plan (a baseline), and three scenarios that phase out coal-based generation by 2030 or 2050. Our findings show that coal phase-out will contribute to net job creation on the national level, adding 23–26 thousand jobs by 2030. In addition, value-added in the power generation sector will also grow by 1.7 billion dollars above today's levels as a result of the coal phase-out. These overall positive numbers mask a gross job destruction of 4.4 thousand jobs in coal power plants, concentrated in a few communities. In the most affected community, 7.1% of the population works in a coal power plant. Negative impacts in coal-reliant communities require special attention to ensure a just transition towards a clean power generation system. The results of this study highlight the need for strategic policy development that supports a smooth transition to a low-carbon economy, taking into account the associated national and local impacts. Our study also contributes to the literature about the evaluation framework of coal phase-out projects around the world, improving the understanding of their associated impacts beyond the case study country.