Article

Countries around the world are starting to build just transition principles into state-led green industrial strategies. Advanced economies, including the US and the EU’s member states, are advancing worker power in new, green industries to secure a fair transition for workers.

In this briefing, we explore how the UK can learn from the successes and failures of fair transition policies in the US and EU. In particular, we find there are five key principles for UK policy as part of a proactive green industrial strategy and highlight a set of five recommendations for fusing green industrial strategy with boosting worker power.

Long-term certainty and investment: Long-term policy certainty is crucial to the success of decarbonisation across the world. To this end, the IRA and the GDIP have embedded long-term investment measures within a 10-year framework (Satchell 2023), signalling policy stability for developers, investors, and workers.
Conditionality: The vehicle through which the IRA embeds many of its fair transition policies, however, a stronger legislative approach in the UK would be required to deliver in practice.
Skills training: Through further tax incentives for using registered apprenticeships and the promise of Skills Academies for key net zero sectors, the US and EU respectively have put training at the centre of their industrial strategies.
Socialising rewards: The US has sought to place restrictions on share buybacks and ensure excess profits are shared. These measures could and should be matched by UK legislation, particularly in light of recent excessive oil and gas profits and dividend payments.
Focussing on regions: The US has sought to build consensus for climate policies by increasing tax incentives for areas with historic ties to fossil fuels that also tend to vote Republican. In the UK opportunities for net zero investment also overlap with carbon-intensive regions.