Econonomics of Energy and Environmental Policy

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A Global South Perspective on Stranded Regions: Insights from the Decline of Coal Mining in Cesar, Colombia

Abstract:
The sharp decline in fossil fuel demand related to the Covid-19 pandemic put in evidence some of the impacts that can be created by the energy transition. By putting into conversation the literature on economic decline in extractive regions and debates on stranded fossil fuel assets, this paper presents the case of the region of Cesar, Colombia, which in 2020 experienced a 33% decline in coal production and an unexpected idling of some of its largest coal mines. We identify various economic impacts for workers, communities, and local governments caused by the structural crisis faced by this activity. Eight challenges identified can be of relevance to other coal-dependent regions in the Global South. We argue that in such regions, many of the impacts recognized by the literature on the Global North are exacerbated. More importantly, additional challenges of a decline in coal production, particularly the precariousness of local economies based on high levels of informal and low value-added activities, the role of coal companies in social spending, and limited available data and institutional capacity, increase the risk of coal regions becoming stranded.
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Keywords: Stranded Assets, Global South, Coal, Coal mining, Covid-19, Cesar/Colombia

DOI: 10.5547/2160-5890.11.2.afur


Published in Volume 11, Number 2 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


 

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