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Podcast September 23, 2022

From Coal to Clean Energy: Protecting People Through the Transition | The Development Podcast

FEATURING: Elizabeth Ruppert Bulmer, Lead Economist, Social Protection & Jobs Global Practice, World Bank; Rachel Perks, Senior Mining Specialist, Energy & Extractives Global Practice, World Bank; Reema Nanavaty, Director of India’s Self Employed Women’s Association (SEWA).

Use the following clickable timestamps to listen to the podcast.

[00:00] Welcome and introduction of the topic

[01:36] Trends with coal production in recent years

[06:54] Visions of India moving away from coal

[11:53] Just transition, coal, and climate change

[14:02] What's behind turning off coal

[15:55] Progress made around the world

[17:12] The impact of closing down coal mines

[21:05] Transitions and new livelihoods and opportunities

[22:54] Historical perspective and lessons learned

[24:40] Stakeholder engagement and consultations

[26:39] Land repurposing

[29:03] Closure and thanks for tuning!

Our warming world needs to wean itself away from fossil fuels, but closing coal mines can impact jobs and communities. How can we ensure people and communities are at the center of the transition away from coal? In this episode of The Development Podcast, we hear about the challenges and opportunities involved in this important transition.

We get the view from some Indian women benefiting from new green jobs, hear from new solar panel owners, and from Reema Nanavaty, director of the Self Employed Women’s Association (SEWA).

We also hear from World Bank experts Elizabeth Ruppert Bulmer, Lead Economist with the Social Protection & Jobs Global Practice, and Rachel Perks, Senior Mining Specialist with the Energy & Extractives Global Practice. They explain why this task can’t be left to future generations to fix, and how phasing out coal can mean new opportunities for communities and jobs. 

 

Featured Voices

  • Elizabeth Ruppert Bulmer, Lead Economist, Social Protection & Jobs Global Practice, World Bank. 
  • Rachel Perks, Senior Mining Specialist, Energy & Extractives Global Practice, World Bank. 
  • Reema Nanavaty, Director of India’s Self Employed Women’s Association (SEWA). 

 


Transcript

[00:00] Raka Banerjee: Hello, and welcome to The Development Podcast from the World Bank Group, coming to you from Washington, D.C. and beyond. I'm Raka Banerjee.

Paul Blake: And I'm Paul Blake, and today's show, it's called the Just Transition, but what is it, and why is it so controversial?

Raka Banerjee: Our warming world needs to wean itself away from coal, but how can this be achieved, taking into account jobs and communities?

Rachel Perks: We also have to be very sensitive that these are communities that have been dependent on their livelihoods and their identities for generations. Now we're asking them to reimagine, in fact, what their entire community is going to look like.

Paul Blake: We hear from India.

Reema Nanavaty: You create a nurturing economy, generate greener livelihoods, and that is what exactly is just transition.

Raka Banerjee: And how just transitions can lead to new, inclusive, and sustainable economies.

Elizabeth Ruppert Bulmer: There are a whole slew of jobs that will be needed in that renewable energy space. A lot of these coal mining jobs are taken up by people who aren't youth, and then youth are struggling to find some alternative.

Paul Blake: That's all coming up over the next few minutes here on The Development Podcast from the World Bank Group.

[01:36] Paul Blake: So Raka, before we turn to our guests, can you share some data to help us understand the context? For example, what are the trends with coal production in recent years? Is it declining due to the increasing focus on renewable energy sources? Has it plateaued? Is it going up? What's the situation?

Raka Banerjee: Yeah, so it might seem surprising, but actually on a global level, coal-based energy production is going up. It has been going up steadily for the last 40 years. In fact, it's the single biggest source of fuel for electricity worldwide.

Paul Blake: So that, yes, that is surprising. I would have thought it would be going down, given the focus on climate change and all of that. Going up for decades. What explains this increase?

Raka Banerjee: Well, it's basically due to demand in the industrializing world. Across industrializing economies, there's been huge increases in electricity consumption, so that's not surprising. That has resulted in greater dependence on coal. Per capita, electricity consumption has actually more than doubled since 1990 in low-income countries.

Paul Blake: I'm assuming it's not the same picture everywhere though, right? It's clear that some countries are reducing their coal production, I would think.

Raka Banerjee: Yeah. Yeah, yeah. For sure. There are fewer large coal producers at play right now. In fact, it's actually just six countries that supply four fifths of the world's coal consumption every year.

Paul Blake: Can we say who those are?

Raka Banerjee: Yeah, so the number one producer is China. It accounts for about half of the both global coal production and coal consumption. Then after that, it's India, the US, Indonesia, Australia, and Russia. On consumption, coal dependence tends to decline as country incomes go up. If you're looking at high income countries or even upper middle income countries, there's been a reduction in coal intensity. That's coming from a combination of things. There's an increasing shift in sustainable energy sources. We're moving more to that in higher income countries.

Raka Banerjee: Also, those countries tend to be more based on services as opposed to manufacturing and industry, which are big users of products derived from coal. That's what's known as, I don't know if you've heard the term, the structural transformation. You're seeing jobs shifting from low productivity primary sectors to industry and then eventually to skilled services, and incomes rise in tandem.

Paul Blake: In other words, as the composition of the economy changes, coal is needed less as you move up that income ladder.

Raka Banerjee: Exactly.

Paul Blake: Where things stand now in terms of coal production and consumption, it seems like it'll continue to change as, we were just talking about, economies grow and develop. How does that affect the people themselves working in the coal sector, and just how many people are we talking about there that will be directly impacted by the transition?

Raka Banerjee: Well, it's two different things, actually. The people directly impacted is broader, but if we're just talking about the number of people directly involved in coal mining itself, it's actually not a huge number. It's about 4.7 million globally. Even within those major coal producing countries that I mentioned earlier, it still accounts for a pretty small share of total employment. And that number is declining even though coal production has been going up. Even though we're producing more coal, there are fewer jobs. In the last decade, overall number of coal mining jobs has declined by two million.

Paul Blake: Wow. I guess that the countries that have the most people employed in coal mining are the same as you mentioned before?

Raka Banerjee: Well, China's still at the top. They have about 3.2 million jobs in coal. That's as of 2018. That's actually more than twice all of the other countries combined. But then.

Paul Blake: So if you count up all of the other countries and then double it, that's the number of jobs in coal energy.

Raka Banerjee: More than double it. That's right. Yeah. Then after that, the list doesn't track the production evenly. India is next after that. They have more than 400,000 direct mining jobs. Just to be clear, those are jobs in the mines themselves. Then Indonesia is around 240,000, Russia at 150,000, and then the US and Australia each only have about 50,000 people employed in the sector.

Paul Blake: You were kind of giving us some definitions there, but when you say coal mining jobs, I'm guessing there are a lot of other people whose employment is tied to coal, even if they're not in the mines themselves.

Raka Banerjee: Yeah, no, exactly. Coal value chains are actually really long. When we're looking at the transition away from coal, it might be just 4.7 million direct jobs, but it's a lot more than that. We're talking about local economies that are dependent on the earnings of coal mine workers. We're talking about the wellbeing and social capital of those communities, and we're even talking about local finances and regional governments and their fiscal solvency. All of that is involved.

Paul Blake: Wow. As ever, as all the topics we talk about, it's complicated, but thanks for breaking it down so much. It's going to be useful when we talk to our colleagues here in a few minutes.

Raka Banerjee: Yeah, absolutely. My pleasure.

[06:54] Raka Banerjee: We just talked about how coal is still the world's dominant and, in fact, most carbon-intensive energy source, and that coal-producing countries have a big challenge ahead to phase it out. A great example of this is India. As the world's second-largest producer, India has a huge task when it comes to moving away from coal, which employs many workers, and a lot of those are in the informal sector who struggle to find work elsewhere.

Paul Blake: At the same time, India has pledged to reach net zero emissions by 2070 and source half of its energy from renewable sources by 2030. It's those job opportunities created by renewable energy which can impact many rural and poor communities. Our producer, Sarah Treanor, found out more.

Sarah Treanor: It's early evening in Fangli Village, Gujarat, India. Temple bells drown out the bells around the necks of cattle, and the sun is starting to set. Until recently, the setting sun would mean darkness for the villages here apart from candles or lamps. Work would have to stop. But many are now owners of solar panels following a project led by SEWA, the Self Employed Women's Association, which represents millions of Indian women in the informal sector. Let's hear from one of them who now owns and can maintain her solar panels.

Santokben: My name is Santokben. I've got three kids. They used to go to school and used to get into trouble from school and come home because when they had homework to do, they'd have to do it by candlelight. If it was windy, the light would go out, so they couldn't do it. They'd go to school, and their teacher would tell them off. When we got solar, we could finally see. We felt like there was light on our soul. We had cows, and we could milk them more often, and soon, they started producing more milk. We went from five liters to 10 to 15. For us, the sun became like gold.

Sarah Treanor: For so many in rural, off-grid villages like these, earning a living has been a challenge. Job prospects have been very limited for mothers like Santokben and for the next generation. But investment and training has meant opportunities have opened up. Let's hear more.

Reema Nanavaty: I'm Reema Nanavaty. I work at the Self Employed Women's Association, SEWA. The need is to make the transition a just transition. How do the rural communities, especially the women's need, the poor informal sector women's need, worker's needs are also addressed when the country is transitioning? What alternatives could be there for the workers who are working currently maybe in the coal mines or in the energy and power sector or in the transmission lines? What are the alternatives which are also designed and worked out while the country is transitioning?

Sarah Treanor: I asked Reema about her vision for India's inclusive, just transition.

Reema Nanavaty: For SEWA members, I think just transition has to be inclusive. It has to lead to newer livelihood opportunities for the youth. We are all committed to building and creating cleaner skies. How can every woman and in her community work towards building an environment which leads to cleaner soil, cleaner air, clean water, and therefore leading to cleaner skies? I think this in itself will generate ample green livelihoods for the women. That is how you create a nurturing economy. You generate greener livelihoods, and that is what exactly is just transition.

Sarah Treanor: Let's go back to Fangli Village and hear a little more.

Lakhiben: I'm Lakhiben. In our village, the 35 houses had a big problem with water, but we now operate a well and a pump, and we all have clean water. It also means that our relatives can call us. We can call our kids. We can charge our phones. It means we can work. Before, we used to have to go and physically leave messages with people.

Sarah Treanor: Back in Fangli, it might be getting dark, but lights will be going on. Homework will be done. Cows milked, phones charged, business will be arranged, and futures planned.

Raka Banerjee: Thanks so much to Sarah, Reema, and SEWA for that report.

[11:53] Paul Blake: Well, joining me here in Washington, D.C., we have Elizabeth Ruppert Bulmer, lead economist at the Social Protection and Jobs Global Practice here at the World Bank, and Rachel Perks, a senior mining specialist with the Energy and Extractives Global Practice at the World Bank.

Raka Banerjee: Welcome, both. Let's start with the big picture. What do we mean when we talk about just transition? It's a phrase that the World Bank uses, but can you just give a little context? What does it actually mean?

Elizabeth Ruppert Bulmer: Sure, thanks. The definition really has evolved over time, I would say. It emerged as a fairly narrow definition applying to coal mine workers in the context of closing coal mines and what would be a fair transition for those coal mine workers.

Elizabeth Ruppert-Bulmer: But now, the definition's really changed in two ways. One is it applies more broadly than coal mining. We could apply it to green transition, broader transition issues. Then second is that it's not just the coal mining workers we care about, but also other workers that will be affected and the communities around the mines. Really having a just transition for all of those affected, including environmental justice concerns as well.

Raka Banerjee: And Rachel, can you give us a little background on how central is the transition away from coal to fighting climate change?

Rachel Perks: Yeah, thanks, Raka. I mean, it's actually pretty central. If we look at it from purely an emissions perspective, the burning of coal is the single largest contributor to GHG emissions. We really believe that if we can move the needle on reducing coal consumption, we can certainly make significant in-roads in air quality and other important environmental and wellness indicators.

Rachel Perks: But at the same time, the transition away from coal is really central to the entire climate change agenda in general because it's so central to people's lives, whether through heating, electricity, manufacturing of goods and metals, or jobs. If we can demonstrate to the general population that coal phase-down can be done in a way that is just, it provides a real litmus test for a number of other seemingly hard to abate sectors or climate change topics.

[14:02] Paul Blake: And sticking with you, Rachel, it's clear that this is hugely important. As you say, coal is the single largest source of greenhouse gas emissions. But it's not as straightforward as just turning off coal or stopping using it, right? Why is this so controversial for some people?

Rachel Perks: No, absolutely, Paul. One of the biggest differences is that today, the phase down agenda is not being driven by economic imperatives. Back in the '70s, '80s, '90s when we were entering some of the hardest coal phase down agendas, it was because the economics of coal was starting to no longer make sense. We had the introduction of gas. We had mechanization in the mines. All of these things provided the imperative to actually phasing down and changing the way that coal was being both produced and consumed.

Rachel Perks: But today, we're asking countries to phase down coal because of climate change imperatives. This makes a much more complicated and controversial agenda because there's a lot of interests that are involved in that. We see on the one hand, the youth who have a very strong desire to see a different planet for future generations. They have very strong opinions, unlike youth of the past, about the way they want this world to look and the way that they want to live in that world.

Rachel Perks: And yet, at the same time, we have jobs, we have industry, all of these things that are so intimately tied to the coal agenda. We really haven't found, I think, a platform where all of these interests can come and speak about these challenges together. So the dialogue at a global level, at a national level, is so disjointed that it makes the topic of conversation really tough.

[15:55] Paul Blake: Sounds like there's a lot of problems to overcome, but trying to look for a silver lining here. Where are you seeing progress made? Are there certain countries or parts of the world where you're seeing progress made?

Rachel Perks: In general, I think both Elizabeth and I would agree that policy incentives is one of the first key things to making progress possible. You can look nowhere else in the world has provided that kind of a policy framework than the European Union and the Green Deal, which has a very specific mechanism and financing attached to transition. So in terms of progress, in many ways that's where we see it because the incentives for countries to phase down their coal sectors are clear.

Rachel Perks: Another area where I think you're seeing a lot of progress is in places like the United States where there's a lot of ground swell of bottom-up movement in coal mining communities who are trying to rewrite their futures. These are two very good examples, very different examples. Of course, I see Elizabeth is giving a bit of a look to me, so let's see, Elizabeth, what do you think?

[17:12] Paul Blake: I mean, I was going to... And we'll hand it back to Raka in a second, but while we're on this topic, it's not as simple about closing down coal mines, right? What's the impact as you see it?

Elizabeth Ruppert Bulmer: Not at all. It's certainly not easy. I would say, also in terms of the European countries, they are really taking on the lessons learned from the phase down in Poland, the major downsizing of the coal sector in the late '90s and by early 2000. They tried a lot of different... On the local economic impact side, on the job side, they had developed a lot of active labor market policies, income support, voluntary severance, integrated packages. They were on a voluntary basis. They really implemented it in a very textbook, right way... What we would think is the right way to do it, and yet, it was still really difficult.

Paul Blake: This is in Poland.

Elizabeth Ruppert Bulmer: This is in Poland. A lot of the older workers ended up taking a package and then exiting the labor force, but that meant that the local communities lost their economic base because everyone just left the labor force, and that contributed to more out migration. It was a really hard, in some of those community's cases, to recover, and it's 10, 20 years on.

Paul Blake: If I'm understanding correctly, it in some ways worked for the individual, but on the macro level, it sort of fell apart.

Elizabeth Ruppert Bulmer: Correct. That's why, on the policy side, it is so complex because it's not just labor policies, it's not just social protection policies. There's also governance policies, there's a decision making at both the local and the regional level. Some of these were the lessons that were learned in the US Appalachian region, which generally aren't really positive lessons because a lot of those communities are declined in a big way.

Elizabeth Ruppert Bulmer: But the ones that were able to remain viable and become more viable had a different economic impetus to them. In one case, it was a college town. In one case, they built a prison. But around that economic infrastructure, there was planning at the local and the regional and the state and the national level, and resources that came in to support that transition. That's what we really need to see in the countries that are attacking transition now.

Paul Blake: And try to influence those second and third order of facts.

Elizabeth Ruppert Bulmer: Correct. Yeah, absolutely.

Paul Blake: Raka?

Raka Banerjee: Yeah, Rachel, would you like to jump in on that too?

Rachel Perks: Yeah, I mean, when we look at the issue of coal phase down, it's not just about closing the mines, as Elizabeth said. As we highlighted in our 2018 flagship report, closing down the mines is actually the easiest bit. The hardest bit is all of the planning that Elizabeth is alluding to. In some ways, we face a lot of pressures because of the acceleration of the climate change agenda in general and countries really trying to play catch-up on some really tough decisions because we're talking about, in essence, the entire structural adjustment of entire economies.

Rachel Perks: I think also one of the things that I've noted in all of the work we've been doing, whether it was meeting with unions, coal miner unions in Greece or in Poland, or talking to women in Bosnia and Herzegovina, in all of these places, there's such a strong identity tied to coal mining or being an energy producing community that there's a lot of psychological transition that has to take place.

Rachel Perks: People have to be brought along in this journey, and we don't think so much about how to deal with that as we do the technicalities of closing mines, doing regional planning, repurposing the lands. But we also have to be very sensitive that these are communities that have been dependent on their livelihoods and their identities for generations, and now we're asking them to reimagine, in fact, what their entire community is going to look like.

[21:05] Raka Banerjee: Absolutely. Yeah. Elizabeth, there are real opportunities here for countries as well, right? We just heard earlier from women in India who are being trained to maintain solar panels who previously were finding it really difficult to find work, and now their kids can study and hopefully go on to find good jobs, they can increase their productivity. Could these transitions also help create new livelihoods and expand these opportunities for people?

Elizabeth Ruppert Bulmer: Yes, absolutely. The renewable energy sector is the obvious companion to closing down coal mines, it's shifting to cleaner energy. A lot of those jobs could be for solar PV installation, for example, operations and maintenance. There's a whole slew of jobs that'll be needed in that renewable energy space that don't necessarily require very high skills. That's the good thing about it, is that they require some technical skill upgrading, but it's fairly accessible to workers along the skill spectrum, so including workers at the lower end of the skill spectrum, including women, as you mentioned, or even youth. A lot of these coal mining jobs are taken up by people who aren't youth, and then youth are struggling to find some alternative. That's one aspect where there will be... We anticipate there will be new job opportunities.

Elizabeth Ruppert Bulmer: The other more immediate, more short-term job opportunities will be related to the actual closing of the mines, the remediation that needs to take place on the mining lands themselves and then hopefully the repurposing. A lot of those jobs will be, A, they'll be labor-intensive, B, they'll be a lot of construction-type jobs. Those jobs could be for the mine workers themselves. So even though the mine is closing, there might be three year, two year, three year job just fixing the mining lands and preparing it for repurposing.

[22:54] Paul Blake: Is there any other historical perspective you can share here? Countries have been dealing with this situation for decades. Many European countries have closed down pits in the '80s and '90s. Are there any other lessons that we should have in mind today as we continue this work?

Elizabeth Ruppert Bulmer: Happy to share some lessons that we drew from our Global Coal Jobs report that came out earlier this year. We did deep dives on five countries, but two historical countries, so on Poland and the US Appalachian region. The main thing is transition takes a really long time. It can take decades. What we're trying to do as the World Bank is shorten that timeframe, and hopefully it takes five years, maybe 10 years, but let's shorten it so it's not decades. Then we avoid this complete dislocation at the local economic level.

Elizabeth Ruppert Bulmer: I mentioned doing the comprehensive approach is quite important in terms of the planning at different levels of government. Making sure that the programs, active labor market programs, social protection programs, are already online and geared up to receive an influx, potential influx of dismissed workers. Yeah. And then complementary policies to encourage local economic diversification. Super important.

Paul Blake: Rachel, do you want to jump in on that? Do you have historical perspective you want to share?

Rachel Perks: Yeah, so Elizabeth's touched on a number of them. When we were doing our 2018 report, we looked at trying to order the universe of lessons, and we essentially drilled them down to 11. I'm not going to talk about some of those that Elizabeth has already highlighted. I want to talk about two in particular. The first, stakeholder engagement. I continue to be so surprised every time we enter a new project or engagement with a-

[24:40] Paul Blake: For the layperson, what do we mean-

Rachel Perks: Sorry.

Paul Blake: ... by stakeholder engagement? No, I mean, what do we... Is that going and talking to these communities? Is that...

Rachel Perks: It's... Yes, in some ways, but it's more than just one-off consultations. It's really about building a sustained process where people in the community, and this could be anyone, it could be a union worker, it could be a local government official, it could be a local businessperson...

Elizabeth Ruppert Bulmer: Anti-poverty, it could be environmental groups, other civil society organizations.

Paul Blake: Anyone who has a stake.

Rachel Perks: Anyone who-

Elizabeth Ruppert Bulmer: Exactly.

Rachel Perks: ... who may have a stake is to create the structures, but also the dialogue for people to be sharing their views. I think this was one of the biggest lessons that we learned back in the '80s and '90s, was just that this was very top-down level planning. These were negotiations that were done, often closed doors between the heads of unions and governments. Then when it came down to actually affecting the transition, these communities in which the actions were taking place had really not been consulted or involved. We see, time and time again, that this leads to slow uptake of efforts or some of the more disastrous negative consequences that Elizabeth's talked about.

Rachel Perks: So we spend a lot of time mapping out stakeholders in the community with government, trying to figure out where the categories of concerns lie the most. What types of information do people expect to receive? When? And helping governments to come up with a clear plan around this so that when they walk into those meetings, they may not have all the answers, but hopefully they have 80% to 90% of them. This puts, then, the entire process off on a really good foot, as opposed to being a very adversarial or conflict-prone type of discussion.

[26:39] Rachel Perks: I think the second other lesson I wanted to come to, and this is super important for us as a practice who are concerned with mining, is the issue of land repurposing. As Elizabeth was highlighting, in the '80s and the '90s, so much of the concern, rightly so, was for the future of coal mine workers, the power plant workers, and at the end of the day, very large budgets that had been set aside for that. But often, very little thinking about beyond simply shutting the doors of the mines, what were people going to do with those lands afterwards?

Rachel Perks: I was really struck the first time I ever went to Poland in, I think it was 2019, when municipality after municipality in these coal mining towns were saying, "We want the assistance of the World Bank to help us to repurpose these former coal mining lands that are still sitting derelict because it presents such a huge capital to us, but in its present state, we can't attract investors." So land has become a really important part of our framework.

Elizabeth Ruppert Bulmer: I also think that, even though there's pretty wide global commitment on the need to phase down coal, taking those early steps is painful, so governments don't want to do it. Even if they're completely committed, they don't want to rush into it. Where is the current crisis? Maybe giving us a little bit of pause, it's also allowing time to do that upstage planning. But also, there's no way to get to that medium term 2028 or 2040 if you don't take the steps now. So we don't really have a luxury of kicking the can down the road too far.

Rachel Perks: No, we don't. In fact, Liz, because the acceleration... I mean, we were already panicking ourselves back in 2020, 2019.

Elizabeth Ruppert Bulmer: With good reason.

Rachel Perks: ... and now, with the current pause in some ways, it only means that the acceleration is going to have to intensify even further to bring down those targets. If anything, we are going to have to work even harder to support our client countries when we come out of this present energy security crisis.

[29:03] Paul Blake: That was a fascinating discussion. Thank you so much to Elizabeth Ruppert Bulmer and Rachel Perks. Joining me here in Washington, D.C., of course, Raka is down the line. But thank you so much for coming into the studio. It's very nice to have you guys here in person.

Rachel Perks: Thanks for having us.

Elizabeth Ruppert Bulmer: Thanks for the opportunity. It was great.

Raka Banerjee: That's all for this episode. It's a lot to take in. Hope you enjoyed it. We learned a lot. Hope you did too.

Paul Blake: As ever. Your comments and questions are very much welcome. Please email us at thedevelopmentpodcast@worldbank.org. From me, Paul Blake.

Raka Banerjee: And me, Raka Banerjee, see you next time.

Paul Blake: Bye.

 


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The World Bank Group is one of the world’s largest sources of funding and knowledge for low-income countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.

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