First Advisor
Sarah Tinkler
Date of Award
Spring 6-2024
Document Type
Thesis
Degree Name
Bachelor of Arts (B.A.) in Economics and University Honors
Department
Economics
Language
English
Subjects
Climate Change, Coal Industry, Industry Decline, Unemployment, Trade
Abstract
Worldwide usage of coal in energy production is declining. Agreements on carbon reduction and decreasing reliance on non-renewable energy systems are occurring at differing rates. Developed countries are quick to adapt and switch to renewable energy systems using their greater resources, technological advances, and government support. Developing countries however are at a disadvantage due to a lack of resources and prior investments in older, polluting, technology. This study aims to look at the potential effects of the decline of the coal industry within Indonesia, a fast-growing developing country that relies heavily on its coal sector. Indonesia as a country is a "large" trading country in the market for coal. It has an abundance of coal reserves and a large and young working population. Young coal workers are concentrated in specific regions of the country and are heavily reliant on the coal sector for employment. To understand the potential impacts on the individuals of these regions, an analysis of the declines of similar industries in other countries is performed to assess the risk to Indonesia of transitioning to a post-coal economy. Research has shown that when an industry moves out of a specific region, structural unemployment is experienced by the local population. Specifically, in coal mining, employment requires low skill sets and little education which leaves the workforce scant opportunities for economic mobility in the face of a shrinking industry. As a major source of employment for relatively unskilled laborers, declining employment in this industry frees up labor with few opportunities to find employment in other more skilled sectors. Retraining of displaced workers will improve mobility. However, higher education may be unrealistic for many workers who are also geographically immobile. Older displaced workers may remain unemployed indefinitely. In order to capture the benefits of a transition to green technology, Indonesia's coal industry must have access to large amounts of policy support for those at risk of unemployment.
Rights
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Persistent Identifier
https://archives.pdx.edu/ds/psu/43669
Recommended Citation
Lopez, Sebastian Ming, "Economic Impacts of Industry Shifts: Evaluating the Decline of the Coal Industry in Indonesia's Transition to Renewable Energy" (2024). University Honors Theses. Paper 1601.