Supply-Side Policies in Coal Transitions and Country Vulnerabilities: A Systematic Literature Review

This study integrates a systematic literature review and cluster analysis to scrutinize policies related to coal mining phase-out and just transition. Using a typology based on four vulnerability criteria (infrastructure dependency, economic dependency, sub-national dependency, and political economy) and five types of policy instruments (regulatory (dis)incentives, compensatory mechanisms, market-based tools, and public investment), we identify policy interventions and practices that both mitigate and exacerbate vulnerabilities in coal-producing countries. Our analysis reveals a notable increase in policy measures identified in the literature since the mid-2010s, with a primary focus on political economy issues (193 policies), followed by sub-national dependency (125), national economic dependency (73), and infrastructure dependency (51). Compensatory mechanisms have gained prominence since 2014. Preventive measures, such as investments in renewable energy infrastructure and economic diversification, are generally seen by the literature as more successful than curative ones, like direct financial compensation. Policy success heavily depends on robust governance frameworks and stakeholder engagement. Our review highlights the need for more emphasis on economic diversification policies for ongoing and upcoming coal transitions, considering their complex nature and mixed success in historical examples and the need for a fast global coal phaseout. We argue that the use of policy packages involving several instruments and strategies to attract and retain new industries is especially promising. Finally, while regulatory measures have been historically favored in several countries, the institutional and financial capacity of enforcing and monitoring such policies in Global South countries, where most coal mining is concentrated, might be much more limited, threatening their effectiveness. Implementation challenges related to policy coordination and coherence, which are common in historical examples, highlight the need for effective policy processes to ensure policy continuity and alignment.