Employment Aspects of the Transition from Fossil Fuels in Australia

by Jim Stanford

New research by the Centre for Future Work, commissioned by health care industry super fund HESTA, finds that a planned transition of Australia’s labour market away from fossil fuel jobs could occur without involuntary layoffs or severe disruption to communities—if governments focus on a planned and fair transition. That transition needs to include: a clear, long-term timeline, measures to facilitate inter-industry mobility and voluntary severance as fossil fuels are phased-out, and generous retraining and diversification policies.

Released following the UN Climate Ambition Summit (12 Dec), which highlighted the need for Australia to accelerate the phase-out of fossil fuels, the report finds that delaying climate policy cannot protect the quantity or quality of fossil fuel jobs, which will inevitably decline as the global energy system shifts quickly to renewables. To best protect these workers and communities, pro-active transition planning must start now.

Key findings of the report include:

  • With strong commitments to alternative employment creation (including, but not limited to, jobs in renewable energy projects), a transition away from fossil fuels can occur without involuntary layoffs or severe disruption to communities.
  • Direct employment in fossil fuel industries is relatively small, just 1% of total Australian employment, and in any single year the overall economy produces twice as many new jobs, as are employed in total in fossil fuel industries.
  • Health care and social services employs 13 times as many people as fossil fuels. At current rates, it would take just two years of new work in health care alone to fully offset all current jobs in fossil fuel industries.
  • Fossil fuel jobs are especially important in some communities, but the number of such communities is small. In just 11 out of 350 Australian communities do fossil fuel jobs make up over 5% of local employment. Strong, focused supports, paid for by the country as a whole, can help those communities adapt to the coming change.
  • Examples of previous transitions in other countries (including Germany, Canada, and Spain) confirm that fossil fuel sectors can be phased out with no involuntary redundancies.

Dr Jim Stanford, Economist and Director of the Centre for Future Work, and author of the report, highlighted the benefits of long-term planning, an announced timetable, and pro-active transition supports (including supported early retirement, job mobility across sites as fossil fuels phase out, and ambitious regional development and diversification efforts) to avoiding involuntary redundancies or economic damage to regional communities.

“In fact if managed well, most people currently employed in the fossil fuel industry will not even need to find alternative work: as the industry gradually winds down, most will transition directly from fossil fuel work into retirement, or other forms of voluntary severance.”

The report was commissioned by HESTA, the industry super fund in the health care sector, and a leader in adjusting its investment portfolio to be consistent with the movement toward net-zero emissions. Mary Delahunty, HESTA’s Head of Impact, noted that “Investment back into a nation’s ‘caring economy’ – health, education and social services – is the most effective way to stimulate economic activity and creates higher-quality, more sustainable, long-term growth.”

“This report demonstrates that with appropriate investment this can go even further, supporting a manageable, sustainable phase-out of fossil fuel jobs,” Delahuunty added.

“HESTA was the first major Australian super fund to commit to a total portfolio ‘net zero by 2050’ emissions target as part of our ambitious Climate Change Transition Plan. Supporting a planned transition is crucial to us achieving these ambitious goals and to protecting the long-term value of our members’ investments.”

Full report