From Restructuring to Sustainable Development the Case of Upper Silesia

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REPORT ENG 2018 From restructuring to sustainable development The case of Upper Silesia

Maciej Bukowski Aleksander Śniegocki Zofia Wetmańska

From restructuring to sustainable development. The case of Upper Silesia 1 Authors: Maciej Bukowski; Aleksander Śniegocki; Zofia Wetmańska

Collaboration: Michał Karpiuk; Karolina Porębna; Paweł Smoleń

Translation: Marek Juszczęć

Proofreading: Jon Tappenden

Typesetting and printing: EkoPress Publisher www.ekopress.pl / 601 311 838

WiseEuropa – Warsaw Institute for Economic and European Studies Aleja Szucha 16/46; 00-582 Warsaw www.wise-europa.eu tel. (22) 513 14 18

Fundacja WWF Polska Mahatmy Gandhiego 3; 02-645 Warsaw www.wwf.pl tel. (22) 8498469 / 8487364

this report has been prepared in cooperation with Policy Officers from WWF Poland: Marta Anczewska and Oskar Kulik

Suggested citation: M. Bukowski, A. Śniegocki, Z. Wetmańska (2018), From restructuring to sustainable development. The case of Upper Silesia, report by WiseEuropa for WWF Poland Foundation, Warsaw, Poland.

Reproduction or use of the texts of this report for educational or other non-commercial purposes is authorized without a written permission of the copyright holder. However, WWF requires written notice and source acknowledgement. Reproduction or use of the texts of this report for commercial purposes without a written permission of the copyright holder is prohibited.

The report was prepared in cooperation with the Marshal Office of the Silesia Voivodeship. The report was made as part of the project Just Transition Eastern and Southern Europe. This project is part of the European Climate Initiative (EUKI) of the German Federal Ministry for the Environ- ment, Nature Conservation and Nuclear Safety (BMU). It is the overarching goal of the EUKI to foster climate cooperation within the European Union (EU) in order to mitigate greenhouse gas emissions.

The opinions put forward in this report are the sole responsibility of the authors and do not necessarily reflect the views of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU).

2 From restructuring to sustainable development. The case of Upper Silesia © R. Kaźmierczak / Marshal Office of the Silesian Voivodeship

TABLE OF CONTENTS

Executive summary ...... 4

1. Introduction ...... 6 2. Three Challenges for Upper Silesia...... 8 2.1. Economic Challenge...... 8 2.2. Challenge of improving quality of life...... 21 2.3. Demographic Challenge...... 28 3. How to Support Sustainable Development in the Region?...... 36 3.1. Changes in Mining and Energy Industries...... 36 3.2. Diversification of Industry and Services...... 51 3.3. Cross-cutting Actions...... 57 3.4. Financing the Modernisation ...... 61 4. Conclusions ...... 66

References...... 70

From restructuring to sustainable development. The case of Upper Silesia 3 EXECUTIVE SUMMARY

Three Challenges for Silesia ● In the coming decades the Silesian Voivodeship can achieve a level of development close to that of the prosperous countries of Western Europe. However, this requires completing the socio economic transition and dealing with three challenges: ● economic challenge – further development of a competitive industrial base and market services is necessary to raise the level of GDP per capita of the region to that of the well-developed European countries, ● demographic challenge – the decline in the number of inhabitants of the region and the process of fast ageing of the population, which is particularly intensive in the communities which in the past based their development on coal mining, has to be stopped, ● social challenge – improvement of the quality of life in the region means solving the problem of a high level of air pollution, and also supporting the areas with a high unemployment rate, poverty and increased crime, decapitalised housing and transportation infrastructure.

Inevitable Energy Transition ● An efficient policy for the development of the Silesian Voivodeship should take into consideration the inevitability of the decline of hard coal mining. Highly industrialised European regions base their economies on efficient manufacturing, and not on the mining sector. The necessary increase in scale and in productivity of Silesian industry in combination with unfavourable demographic trends translates into the constantly growing wage pressure on the mining sector. Therefore, maintaining extraction requires constant improvement of efficiency, which means further reduction of the workforce, gradual shutting down of successive mines, and rapid decline of the economically justified extraction level and the exploitable resources of the hard coal. This process is accelerated by the progressing decline in acceptance on the part of the local communities of further investments in coal extraction under the Silesian communities, which also results from increasing prosperity of the region. ● Historical trends and detailed forecasts of profitability of extraction in Upper Silesian mines indicate that by 2050 steam coal extraction will disappear from the region. Only the most efficient coking coal mines have a chance to survive until mid-century, however, they too will have to improve productivity and reduce their workforce significantly. Overall, by 2050, the number of jobs in the sector will fall to below 10 thousand people and it will be seven times lower than currently. Even in the next ten to twenty years, the number of permanent jobs in the mining sector will decrease to approximately 20 thousand. This prospect cannot be reversed by modern coal extraction technologies (they will not change the necessity of reducing labour costs), or the so-called “clean coal technologies” (they do not provide solutions to the problems with local supply of the hard coal). ● Managing changes in the mining sector means ensuring realistic expectations of all the involved parties. Clearly communicated prospects of the long-term decline of the industry will ensure the time and resources for the employees, local communities and mining companies to adjust to the changes. It is also desirable to implement changes to social insurance systems, facilitating the move from mining to other sectors.

4 From restructuring to sustainable development. The case of Upper Silesia ● The changes in mining must be accompanied by comprehensive modernisation of the whole fuel and energy system. Investments in low-emission technologies for generating electricity and heat, and also major thermal modernisation of buildings in the region, can ensure a positive impulse for the labour market, which will be comparable to the scale of employees leaving the sector in the next ten to twenty years. A large reduction of pollution related to low-emission investments will also lead to improved quality of life, making the region significantly more attractive.

Cross-cutting actions: diversified economy, comprehensive revitalisation, efficient public transport ● Increasing the competitiveness of the regional economy requires a long-term modernisation policy based on: ● expansion and diversification of the local industrial base with highly productive, low-emission sectors, such as the machinery, electrotechnical, electronic, chemical, or pharmaceutical industries, ● development of an advanced services segment, for instance engineering, IT, R&D, and consulting services, ● improvement of competitiveness of higher education institutions and research institutes, especially in the areas beyond the traditional specialisations connected to mining and conventional energy industries. ● The problematic areas of Silesian cities require revitalisation, which will ensure the creation of dense, diversified urban fabric connected by efficient public transport. At the same time, revitalisation should take into consideration the necessity to improve the efficiency of energy use and reduce pollution, as well as ensure adaptation to long term trends (climate change, ageing society). Increasing the funds for development and improvement of the consistency of public transport in the region will enable the integration of the local labour markets, which will help to reduce the differences in the unemployment rate and poverty in neighbouring centres.

Funding Modernisation – All Hands on Deck

● Funding low-emission modernisation of the region will require legislative changes at the country level, mobilising private funds, and also effective combination of diverse public sources of financing, in particular: ● implementation of country-wide regulations for key sectors (energy, buildings, transportation, industry), creating a stable legal environment for involving private funds in low-emi ssion investments, ● assigning revenue from sale of allowances in the EU ETS system to co-fund low-emission investments, ● ensuring dedicated funds for supporting the transition of coal regions as part of the next European Multiannual Financial Framework as well from domestic sources.

From restructuring to sustainable development. The case of Upper Silesia 5 1. INTRODUCTION

Why the Need for Transition? The historical mining-industrial centres in Europe, such as the Ruhr, THE SIGNATORIES OF Wallonia, or Yorkshire, started reconstructing their economic models THE PARIS AGREEMENT, as early the second half of the 20th century. Exhaustion of the easily AS AN INTEGRAL PART accessible coal deposits, a large increase in labour costs, damage to the natural environment, increasing competition from abroad, and the OF CLIMATE POLICY, technological progress promoting new branches of industry made fin- ADOPTED THE PRINCIPLE ding a new basis for the local economy vital for these regions. The next THAT THIS TRANSITION part of this process, taking place in the 21st century, is the result of the WOULD BE JUST, ENSURING EU Member States fulfilling their international climate obligations THE CREATION OF GOOD taken on in Paris in 2015. Pursuant to the special IPCC report (2018), in QUALITY JOBS FOR COAL order to keep the climate change within safe limits, the developed coun- INDUSTRY EMPLOYEES tries have to completely eliminate the net greenhouse gas emissions by the middle of this century. Specifically, this requires far-reaching AND INCLUDING ALL restructuring of the European energy and industry sectors, with a focus THE STAKEHOLDERS, on decreasing the emissions. At the same time, the signatories of the ESPECIALLY THE EMPLO Paris Agreement, as an integral part of climate policy, adopted the prin- YEES OF TRADITIONAL ciple that this transition would be just. In the case of Upper Silesia it SECTORS IN THE PROCESS must ensure the creation of good quality jobs for coal industry employees OF CHANGE and include all the stakeholders, especially the employees of traditional sectors in the process of change. This is an especially significant challenge in the case of the most industrialised regions of Europe. Among them, Upper Silesia is a special case. Nowadays, it is the last large hard coal mining area in the Euro- pean Union. Like other traditional industrial regions of the continent in the past, it has to deal simultaneously with the economic, environmental and social problems that arise as the model for development employed to date ceases being effective.

Why is Further Transition of Upper Silesia Difficult?

One of the key challenges for the region is the declining competitiveness of the mining sector, which until the end of the 20th century was the basis for the local economy. Despite the repeated decreases in the labour force in this industry over the last three decades, there are still over 70 thousand people working in mining of Silesian coal. At the same INDUSTRY STILL ACCOUNTS time, the region has benefited from new sources of economic deve- FOR A THIRD OF GDP IN lopment. After Poland’s accession to the European Union, Silesian SILESIAN VOIVODESHIP Voivodeship made good use of the opportunities offered by incorpora- tion into the delivery chain of the continental industrial centre located along the Rhine valley. This allowed the industrial nature of the region’s economy to be maintained. Despite a severe decline in the workforce in the mining and metallurgy sectors: industry is still responsible for one third of the products coming from the Silesian Voivodeship.

6 From restructuring to sustainable development. The case of Upper Silesia However, this transition has not been completed. Growing labour costs and unfavourable geological conditions mean that the amount of minable hard coal is shrinking. At the same time, the process of industrialisation, vital to achieve high level of income in the region, is far from complete. Making up the economic distance separating the Silesian Voivodeship from the highly developed industrialised regions in Western Europe, such as southern Germany or the Scandinavian industrial regions, requires maintaining a rapid rate of industrialisation for several decades to come. Meanwhile, the region is dealing with a series of structural problems: an aging population, decreasing number of inhabitants, a high level of air pollution, damage caused by mining, insufficient local infrastructure, or a high crime rate. Despite significant progress in each of the areas, the quality of life in Silesia is still below that not only in the whole of Europe, but also the rest of Poland.

In this report, we present a synthetic diagnosis of key developmental challenges for the Silesian Voivodeship, emphasising those resulting from specific local conditions and those deriving from the level of advancement of country-wide development processes. We ask what role hard coal will play in the region’s future, pointing to the declining trend the mining sector is exhibiting. We examine the limitations connected with maintaining a high level of dependence for power and economic dependence on this black fuel, while identifying the scale of and areas in which modernization is needed.

The decisions made in the next few years will have a huge effect on the future of the voivodeship, which has a chance to become a model for a just transition of a mining region into a modern industrial and commercial region. To make this happen, measures are needed encompassing on one hand responsible restructuring of the traditional core of the local economy, and on the other, the building of new competitive advantages thanks to well-planned investment, social, transportation and environmental policies. The argument we present is that such a policy has to be consistent with the European climate agenda, treating it not as a threat, but as a chance for modernisation, allowing the Silesian Voivodeship to build new potential corresponding to its inhabitants’ expectations. The report closes with recommendations for local authorities, central government, and EU institutions.

From restructuring to sustainable development. The case of Upper Silesia 7 2. THREE CHALLENGES FOR UPPER SILESIA

2.1. Economic challenge

The main economic challenge for the Silesian Voivodeship looking THE MAIN CHALLENGE towards 2050 is no different from that faced by the whole of Poland, and – more broadly – Central Europe. It is achieving a level of deve- FACED BY THE SILESIAN lopment close to the EU average. The best reference points for the VOIVODESHIP UNTIL 2050 region seem to be the industrial, former mining regions of Western IS ACHIEVING THE LEVEL 140% Europe, in which restructuring of the economy based on hard coal and OF DEVELOPMENT CLOSE metallurgy120% has already been completed, and in which – to a greater or TO THE EU AVERAGE lesser degree of success – it has been possible to create new competitive advantages.100% They were based mostly on the manufacturingDusseldorf and modern Saara services.80% The initial position of the Silesian Voivodeship is relatively good. In 2016, its GDP per capita expressed in purchasingNord-Pas-de-Calais power parity, was 60%half of that of Düsseldorf, more than 70% of the averagePołudniowe for the Yorkshire EU, rednia UE = = 100% UE rednia andś 40%85% of the level of the French Nord-Pas-de-Calais region.Śląskie The same can be said of the level of industrialisation, which exceedsPolska 70% of the European20% average from the nominal (exchange rate) perspective, and 120% according to purchasing power parity1. This places the Silesian 0% Voivodeship on a level close to that of Southern Yorkshire in the UK or the Belgian2000 2001 province2002 2003 2004 2005 of2006 Hainaut2007 2008 2009 2010 –2011 regions2012 2013 2014 2015 that,2016 like the economy of Upper Silesia, had economies dominated by hard coal mining and heavy r1 industry.

140% Figure 1. GDP per capita 120% (based on purchasing power parity) in the selected European industrialised 100% regions as a percentage of the Düsseldorf EU average, 2000-2016 80% Saar Source: WiseEuropa based on Nord-Pas-de-Calais Eurostat data. 60% South Yorkshire

EU average = 100% = EU average Silesian Voivodeship 40% Poland

20%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

1 Comparisons according to the purchasing power parity are more favourable than comparisons according to exchange rates. This is derived from the relatively weak exchange rate of PLN in relation to EUR and USD, which makes the nominal difference of the developmental level almost twice as big than the ones resulting from purchasing power of the inhabitants of Poland. In the case of industry, a part of industrial production is expor- ted (which allows for getting higher prices), while a part goes to local market (offering less attractive prices to manufacturers). The relative level of industrialisation of Silesia’s economy in relation to the EU is between the two presented values.

8 From restructuring to sustainable development. The case of Upper Silesia Even today, the wealthiest parts of the voivodeship: the Katowice and Tychy subregions, have a higher GDP per capita expressed as purchasing power parity than the traditional mining-industrial regions of France and the UK. Nevertheless, a large disproportion is also visible between 8 subregions, and the remaining ones require structural support to reach this level. On the other hand, the examples of the Ruhr or 100% for instance the Saar indicate that successful restructuring of the post- 2000-2007 90% 2007-2015 -mining areas presents an opportunity to attain a higher level of wealth, THE PERIOD OF even exceeding the European average. This is conditional upon increa- 80% 72% TRANSFORMATION69% WAS sing the current level of industrial production and the added value 65% 64% 64% Düsseldorf 38 61% 61% 63% IN RELATIVE TERMS58% generated in services. Saara 34 60% THE WORST FOR THE In this context, it is worth notingŚrednia the UE uneven development of29 specific SOSNOWIEC AND BYTOM Podregion katowicki 27 areas of the Silesian VoivodeshipPodregion intyski the last thirty years. In25 the 1990s, SUBREGIONS,40% IN WHICH the biggest benefits ofNord-Pas-de-Calais the economic transition were24 enjoyed by the THE PROBLEM OF Tychy subregion, in whichPodregion GDP gliwickiper capita was increasing24 faster than 16% Hainaut 22 20% the average growth in the country. After the global financial crisis of Wzrost PKB per capita 2000-2015 capita PKB per Wzrost RESTRUCTURING HARD Południowe Yorkshire 22 2008 and the influence it had on the strategy of automotive companies, COAL MINING AND THE Podregion bielski 21 the Gliwice subregion became theŚlą skieleader in the region. 21In both subre- RELATED0% POOR CONDITION gions, the areas included in the KatowicePolska Special Economic20 Zone were UE skie

Tyski 19 OF THE NATURALą Podregion sosnowiecki l developing especially rapidly. Since 2000, productivity in this area has Bielski Polska Ś Gliwicki Rybnicki

Bytomski Podregion rybnicki 17 Katowicki

ENVIRONMENT AND CITY increasedstochowski 2.5 times, resulting at the same time in a significant increase ę Sosnowiecki Podregion częstochowski 17 Cz INFRASTRUCTURE WERE in employment in both thePodregion manufacturing bytomski and private15 services sectors. A slightly worse, but still above-average result was achieved by Kato- ESPECIALLY PROMINENT 0 10 20 30 40 wice, which had successes in the field of private services, and the Biel- tys. EUR PPS r2 sko-Biała subregion, which at the beginning of the transition had to deal with the problem of restructuring the textile industry. Similarly to r3

100% 90% Düsseldorf 38 2000-2007 Saar 34 2007-2015 EU average 29 80% 72% 69% Katowice subregion 27 65% 64% 64% 61% 61% 63% Tychy subregion 25 58% Nord-Pas-de-Calais 24 60% Gliwice subregion 24 Hainaut 22 40% South Yorkshire 22 Bielsko-Biała subregion 21 Silesian Voivodeship 21 16% 20% Poland 20

Growth of GDP per capita 2000-2015 capita per of GDP Growth Sosnowiec subregion 19 Rybnik subregion 17 0% Częstochowa subregion 17 EU Bytom subregion 15 Poland

a subregion a 0 5 10 15 20 25 30 35 40 ł

Tychy subregion Tychy thousands of EUR PPS Bytom subregion Rybnik subregion Rybnik Gliwice subregion Gliwice Katowice subregion Katowice stochowa subregion stochowa Silesian Voivodeship ę Sosnowiec subregion Sosnowiec Bielsko-Bia Cz

Figure 2. Accumulated growth of GDP per capita in Figure 3. GDP per capita (including purchasing power) Silesia, Poland, and the European Union in the years in Silesia and in selected European industrial regions, 2000-2015 2015

Source: WiseEuropa based on Eurostat data. Source: WiseEuropa based on Eurostat data.

From restructuring to sustainable development. The case of Upper Silesia 9 Tychy and Gliwice, in the case of this subregion as well, the development of the automotive industry, as well as the local factories joining the European value chains in close cooperation with the German and Czech industries, was very important. In relative terms, this period was the worst for the Sosnowiec and Bytom subregions, in which the problem of restructuring hard coal mining and the related poor condition of the natural environment and city infrastructure were especially prominent. They did not attract a sufficient volume LARGE INFLUX OF of investments capable of counteracting the changes in heavy industry INVESTMENTS LED BY THE and mining. At the same time, they noted a relatively high (although AUTOMOTIVE INDUSTRY lower than in Tychy or Gliwice) rate of economic growth and labour pro- WAS AS IMPORTANT FOR ductivity, as well as high unemployment and low labour market partici- MITIGATING THE IMPACT pation. OF JOB LOSSES IN MINING The different economic results of individual parts of the Silesian Voivo- AND HEAVY INDUSTRY AS deship do not mean that the successive governments and local authori- SOCIAL PACKAGES ties were passive in their approach to the problems of hard coal mining and metallurgy. Laid off employees received severage packages funded by the state budget, and the miners were given a guarantee that a sepa- rate, highly subsidised pension system was maintained (see Siedlecka et al. 2017). The severage packages were complemented with a policy of attracting investors, especially the creation of the Katowice Special Eco- nomic Zone in 1996. The large influx of new investments to the Zone with the automotive industry at the forefront absorbed the shock – in the whole region – of disappearing jobs in heavy industry and mining to no lesser an extent than the severage packages. Thanks to this, throughout the transition, the Silesian Voivodeship maintained a visibly lower unemployment rate than the country average, which prevented escalation of some social problems, with poverty being the most prevalent. On the other hand, in the voivodeship, after 1990, there was a significant decrease in professional activity – up to 3% below the country level, which could not be fully eliminated even in the period of quick development that followed the accession to the European Union in 2004. This problem touched in particular the regions with initially high employment in the mining sector, in which the quick development of an PROTECTIVE PROGRAMMES economic alternative in industry or services did not take place, like RESULTED IN THE RELA Bytom. TIVELY LOW LEVEL OF PROFESSIONAL ACTIVITY Despite the fact that the main burden of restructuring has already been AND EMPLOYMENT, borne, and the mining sector employs just under 4% of the people working in the voivodeship, the special severage programmes realised with ESPECIALLY FOR 50+ the help of the pension system are still maintained. This has had a major MALES, WHICH MIGHT impact on the labour competitiveness of the region, which, in relation DECREASE THE DYNAMICS to other industrial regions of Europe, is characterised – despite the very OF INDUSTRIALISATION low unemployment – by a relatively low level of professional activity AND MANUFACTURING and employment. In these areas, the Silesian Voivodeship is also infe- INVESTMENTS rior to the neighbouring regions directly competing with it for investment capital: the Lower Silesian Voivodeship, Opolskie Voivodeship, and Małopolskie Voivodeship. The reason for this is low employment rate and professional activity of males aged 50+, which is the group making use of the special mining sector pension benefits. In view of the effective elimination of unemployment, the low professional activity in

10 From restructuring to sustainable development. The case of Upper Silesia

21%

19%

17%

15% 81% 13% 79% 11% 77% Stopa bezrobocia (%) bezrobocia Stopa 75% 9% ci zawodowej (%) zawodowej ci

ś 73% 7%

71% 5% 69% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

nik aktywno ź nik 67% Wska 65% R5 - r4 i 5 (mają być razem) 63%

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Polska śląskie mazowieckie małopolskie

21%

81% 19% 79% 17% 77% 15% 75% 13% 73% 71%4 11% ogółem 69% mężczyUnemployment rate (%) źni 9% 67%2 Professional activity rate (%) rate activity Professional kobiety 7% 65% 0 63% osoby 15-245% lata

dem Polski, p.p. Polski, dem 4 osoby 50+ lat ę ogółem 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 -2 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 mężczyźni 2 Poland Silesian Voivodeship MazovianMazowieckie Voivodeship Voivodeship Małopolskie Voivodeship -4 kobiety ą skie wzgl l

ś Figure 4. Professional activity rate of people aged Figure 5. Unemployment rate in the years 0 osoby 15-24 lata 18-59/64-6 in Poland in years 1995-2017 (%) 2004-2017 (%) nica: ż nica: dem Polski, p.p. Polski, dem osoby 50+ lat ę Source:Ró -2 WiseEuropa based on Local Data Bank of Central Source: WiseEuropa based on Local Data Bank Statistical-8 Office. of Central Statistical Office. -4 ą skie wzgl l ś -10 -6 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 nica: ż nica: the region may present a threat to its economic growth, especially as it

Ró -8 has less reserves in the form of hidden unemployment in the agricultu- r6 ral sector than its neighbours. If this problem is not counteracted, for -10 example by immigration from outside the region, the probable effect

will be a decrease in the rate of industrialisation and manufacturing 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 investments, and thus in the competitiveness of the Silesian Voivo- r6 deship in comparison to Poland and Europe. In the long-term, this could hamper the process of making up the economic distance in rela- 4 tion to Western Europe and mean that the prosperity level does not go 2 beyond approximately 70%-80% of the EU average.

0 4 -2 skie Voivodeship Voivodeship skie ą

l 2 Ś -4 0 -6 total males in comparison to Poland, p.p. Difference: Difference: -2 females skie Voivodeship Voivodeship skie -8 ą l 15-24-year-olds Silesian Ś Poland Difference -4 50+-year-olds Voivodeship -10 Total 75,9 73,2 -2,7 -6 total 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 males in comparison to Poland, p.p.

Difference: Difference: Males 80 75,7 -4,3 females -8 15-24-year-olds Females 71,2 70,4 -0,8 50+-year-olds -10 15-24-year-olds 34,8 33,6 -1,2 50+-year-olds 34,4 29,6 -4,8 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Table 1. Professional activity for persons of working Figure 6. Professional activity for persons of working age, 2017 age, 2017 (% of general population)

Source: WiseEuropa based on Local Data Bank of Central Source: WiseEuropa based on Local Data Bank Statistical Office. of Central Statistical Office.

From restructuring to sustainable development. The case of Upper Silesia 11

Instytucje 80

60 Stabilność Innowacje makroekonomiczna 40

Absorpcja Infrastruktura technologii

Reszta UE Even assuming that the problems with labour supply are solved or alleReszta- Polski Efektywność rynku Śląskie viated, for exampleWielkość rynku through immigration, the question arises of the pracy other ways in which the Silesian Voivodeship can develop a competitive advantage. According to the indices collected as part of the European Regional Competitiveness Index, the Silesian Voivodeship has similar strengths and weaknesses as the rest of Poland. Specifically, it has the r8 quality of human capital and institutions close to the country average, so the ability to absorb new technologies is also similar.

Rest of EU

Institutions Rest of Poland 80 SilesianŚląskie VoivodeshipVoivodeship

60 Innovation Macroeconomic stability 40

0 Figure 7. Values of the selected subindices of the European Regional Technological readiness Infrastructure Competitiveness Index 2016 for the Silesian Voivodeship and for other Polish and European regions

Source: WiseEuropa based on Annoni et al. (2017). Market size Labour market efficiency

Meanwhile, the innovative potential of the region is slightly above the country average, although still lower than the Warsaw and Krakow metropolitan areas. This is the result of relatively high (for Polish conditions) quality of the higher education institutions and research insti- THE INNOVATIVE POTEN tutes located in the region. On the other hand, this sphere, like the area TIAL OF THE REGION IS of transportation infrastructure and the capabilities of public institu- SLIGHTLY ABOVE THE tions, still requires significant reforms and increased financing. Wit- COUNTRY AVERAGE, hout it, achieving a level of development close to that of Northern and ALTHOUGH STILL LOWER Western Europe will not be possible in the Silesian Voivodeship, or in the whole of Poland. THAN IN THE WARSAW AND KRAKOW METROPOLITAN Insufficient financing and underdevelopment of higher education and AREAS the science sector, along with a strictly manufacturing nature of the industrial companies located in the region, also play a role in the potential for absorption of new technologies, which is clearly lower than in the rest of the EU. Using the main attribute of the Silesian Voivodeship, i.e. a high degree of urbanisation and good geographical location, by itself will allow the region to attract investments driven by an extensive labour market or large consumer base. However, in view of the poor potential for innovation and for absorption of technologies, there are not enough international research and development centres, design- -engineering agencies with export potential, as well as companies offering supralocal consulting or IT services in the voivodeship, which

12 From restructuring to sustainable development. The case of Upper Silesia in the long term may hamper growth in work productivity and the level of prosperity in the region. Increasing the competitiveness of the Silesian Voivodeship requires readiness to follow a long-term modernisation policy – on the part of both the central and regional authorities. The advantages from the first years after Poland’s accession to the European Union, for instance in the form of good East-West transport connections thanks to road investments, which in a short time connected the Czech Republic and INCREASING THE Western Poland with German industry, are not enough. The North- COMPETITIVENESS OF THE -South route remains underfunded transport-wise (both with regard to SILESIAN VOIVODESHIP roads and railways), i.e. the connections of the region with the Czech Republic through the Moravian Gate and the Silesia-Central Poland, REQUIRES A LONG-TERM Baltic Sea and Silesia, Greater Poland and Western Pomerania routes. MODERNISATION POLICY Once these gaps are filled, countrywide road and railway infrastructure AT BOTH CENTRAL AND modernisation programmes will enhance the geographical advantages REGIONAL LEVEL of the region. These changes, however, need to be accompanied by reforms that are broader than just infrastructure, directed at increasing the scientific potential of the region and significant improvement of the international status of the local higher education and scientific institutions, including in the spheres not connected to the mining sector. This is due to the need for diversification of the industrial structure of Silesian economy – both its industrial core and the increasingly economically important service sector. To achieve a level of prosperity close to the EU average by 2050, the whole Silesian Voivodeship needs to increase the industry and market services manufacturing, in exchange rate conversion, by 3.5 times. This means maintaining the mean rate of economic growth at 4% annually for the next three decades, with approximately 1.0-1.5% of this value being gradual appreciation of PLN in relation to EUR, and approximately 2.5-3.0% being the increase in volume of production measured in purchasing power parity. Assuming ACHIEVING THE EU AVERAGE that the general industrial orientation of the region continues, this LEVEL OF PROSPERITY IN means increasing the value of industrial production per capita to appro- THE SILESIAN VOIVODESHIP ximately EUR 10-14 thousand and the value generated in market servi- REQUIRES MORE THAN A ces in the range of approximately EUR 14-18 thousand per capita by THREE-FOLD INCREASE OF 2050 (Fig. 8). THE VALUE OF INDUSTRIAL This target is currently achieved by the most developed regions of the GOODS AND MARKET EU, however, they too, gradually – at approximately 1.2-1.3% annually SERVICES GENERATED IN – are increasing the value and productivity of their own economies. THE REGION This means that although the Silesian Voivodeship’s development goals for 2050 should assume exceeding the average European level of industrialisation, up until this time the region will probably remain behind industrial and commercial centres such as Tübingen, Karlsruhe, Cen- tral Franconia, Upper Palatinate, Upper Austria, or Western Sweden. The high level of development of these regions – and the whole of Europe – is based on manufacturing and the service sector coupled to it. It will be the complex manufacturing, and not the energy or mining sectors, that enable a high share of industry in the added value to be reached, and demand to be created for high-quality engineering, design, research and development, or consulting services . There are only a few oil and gas mining regions (Groningen, North-Eastern Scotland), and

From restructuring to sustainable development. The case of Upper Silesia 13 COMPETITIVENESS

Increasing the competitiveness of the Silesian Voivodeship requires a long-term modernisation policy at both central and regional level © R. Kaźmierczak / Marshal Office of the Silesian Voivodeship

100% Śląskie 2050

90% u ł 80% UE 2015

Śląskie 2015 70% ci dodanej przemys dodanej ci ś 60% Północna Szwecja 50% owego w wartow owego

40% Płn.-Wsch. Szkocja

30% Groningen

20% ł przemys przetwórstwa

Udzia ł Zachodnia 10% Macedonia

0% 0 5 10 15 20 Wartość dodana w przemyśle, tys. EUR per capita

40 40 100% Silesian Voivodeship 2050

90% 35 35

80% EU 2015 30 30 Silesian Voivodeship 2015 70%

25 25 60% UE 2050 EU 2050 Northern

, in thousands EUR per capita per EUR thousands in , Sweden 20 20 50% Silesian Śląskie 2050 ugach rynkowych, tys. EUR per capita EUR tys. per rynkowych, ugach ł UE 2015 EU 2015 Voivodeship 40% North East 15 15 2050 Scotland

30%

dodana w us w dodana 10 10 Groningen ść

Share of manufacturing in industrial value added value industrial in manufacturing of Share 20% Value added in market services market in added Value Warto Śląskie 2015 Silesian Voivodeship 2015 5 5 Western 10% Macedonia

0 0 0% 0 5 10 15 20 0 5 10 15 20 0 5 10 15 20

Wartość dodana w przemyśle, tys. EUR per capita Value added in industry, in thousands EUR per capita Value added in industry, in thousands EUR per capita

r9 Figure 8. Value added in industry and market services in r10 Figure 9. Value added in industry in European regions European regions in 2015, forecast for the EU average in 2015 and the significance of manufacturing in until 2050, and values for the Silesian Voivodeship relation to other sectors (including the mining and ensuring the EU average is reached in 2050. energy sectors)

Source: WiseEuropa based on Eurostat data. Source: WiseEuropa based on Eurostat data.

also the sparsely inhabited specialist of metal ore mining areas (Nort- IS BE THE COMPLEX hern Sweden) to which this rule does not apply. Only Western Macedo- MANUFACTURING, AND NOT nia, with its small population, reached a high level of industrialisation THE ENERGY OR MINING based on lignite deposits, but this does not translate directly into the SECTORS, THAT ENABLES general level of prosperity due to the underdevelopment of the service A HIGH SHARE OF INDUSTRY sector, and does not guarantee long-term stability of development. It is IN THE ADDED VALUE TO no wonder therefore that currently in Western Macedonia there is an BE REACHED, AND DEMAND intensive debate going on around the possibility of finding new competitive advantages in order to avoid economic collapse in the event of the TO BE CREATED FOR HIGH- expected shutdown of lignite mining in the region over the coming QUALITY ENGINEERING, decades. DESIGN, RESEARCH AND DEVELOPMENT, OR CONSULTING SERVICES

16 From restructuring to sustainable development. The case of Upper Silesia

32% le ś

16% Produkcja:

maszyn ogólnego przeznaczenia pojazdów i części do nich 8% urządzeń elektrycznych i elektroniki wyrobów metalowych y w zatrudnieniu w przemyw zatrudnieniuw ż y żywności 4%

bran chemikaliów i wyrobów chemicznych Udzia ł 2% 3-5 tys. EUR ej 3 tys. EUR ż 5-10 tys.5-10 EUR Poni Ponad 10 tys. EUR Ponad 10 tys.

Grupy europejskich regionów wedlug wartości dodanej w przemyśle per capita w 2015 r. r11

Groups of European regions according to industrial value added per capita in 2015 Below EUR 3 EUR 3-5 EUR 5-10 Over EUR 10 thousand thousand thousand thousand 32% Manufacturing of:

general-purpose machinery

16% vehicles and parts for them

electric appliances and electronics

metal products

8% food

chemicals and chemical products

Figure 10. Significance of key manufacturing Share of subsector in total industrial employment industrial total in subsector of Share subsectors for the labour market in European

Increasesubscetor given a of importance average in regions in 2015, depending on the degree of their 2% industrialisation

Increased industrialisation Source: WiseEuropa based on Eurostat data.

Diversification of the Silesian economy has to be based on changes in the way industry is structured in the sector and on developing new types of export-oriented services. This allows a high level of production, high efficiency, and a competitive advantage to be achieved, making it DIVERSIFICATION OF THE possible to gain high unit prices in the service sector at the same time. SILESIAN ECONOMY MEANS Therefore, in industrial regions, sectors centred around meeting the CHANGE TO THE THE local needs, such as the food industry, play a relatively small role com- INDUSTRY STRUCTURE OF pared to that of the companies that fall within the Europe-wide indu- INDUSTRY AND DEVELOPING strial commons and thus create a comparative advantage of the Euro- NEW TYPES OF EXPORT- pean Union on the industrial map of the world: manufacture of ORIENTED SERVICES machinery, mechanical vehicles, chemical products and medicines. For this reason, within the next two or three decades, it will be especially important for the Silesian Voivodeship to maintain and strengthen its competences in specific fields. This includes actions related to the automotive industry (consistent with the technological changes that will inevitably affect this field, mostly electric drives), and which, at the same time, enable development of local export-oriented companies in the machinery, chemical, electronic or pharmaceutical industries, in symbiosis with the companies offering advanced B2B and B2C services. Achieving these goals will require local authorities and central agencies to take up activities at the point of contact with the investors represen- ting industries (chemicals, pharmacy, electronics, machinery production, etc.) and types of activities (R&D, consulting, IT services, design-engineering centres, etc.) that so far have been under-represented in the region. Their expectations will differ from both the expectations of the companies of the coal-steel complex, and of the product- -wise less complex branches of the economy (food, metal industries,

From restructuring to sustainable development. The case of Upper Silesia 17

Śląskie Produkcja: maszyn ogólnego przeznaczenia

Górna Austria pojazdów i części do nich urządzeń elektrycznych i elektroniki Düsseldorf wyrobów metalowych Zachodnia Szwecja chemikaliów i wyrobów chemicznych

Środkowa Frankonia

Karlsruhe

Tybinga

Górny Palatynat

0% 20% 40% 60% 80%

Udział branży w zatrudnieniu w przetwórstwie przemysłowym

r12

Silesian Voivodeship Manufacturing of: general-purpose machinery

Upper Austria vehicles and parts for them electric appliances and electronics Düsseldorf metal products Western Sweden chemicals and chemical products

Middle Franconia

Karlsruhe Figure 11. Share of key Tübingen manufacturing subsectors in the total number of people Upper Palatinate employed in manufacturing 0% 20% 40% 60% 80% in selected European regions in 2015 Share of subsector in total employment in manufacturing Source: WiseEuropa based on Eurostat data.

shared services centres, etc.). This means they will require preparation of different and more subtle investment incentives than before. There- fore, on the economic plane, the development policy of the Silesian THE DEVELOPMENT Voivodeship must go beyond the sphere of infrastructure, expanding to POLICY OF THE SILESIAN the area of scientific policy, innovation policy, and also social-environ- VOIVODESHIP NEEDS TO mental policies guaranteeing the standard of life attractive to specialists MOVE BEYOND THE SPHERE sought after in the more advanced sectors of the economy. OF INFRASTRUCTURE, EXPANDING TO THE AREA OF SCIENTIFIC POLICY, INNOVATION POLICY, AND ALSO SOCIAL- ENVIRONMENTAL POLICIES

18 From restructuring to sustainable development. The case of Upper Silesia Box 1. NEW INDUSTRIALISATION OF UPPER SILESIA AFTER 1989

The current level of prosperity of the Silesian upon it by the low productivity of the industry and Voivodeship is the result of the processes that large financial losses. In the years 2007-2017, the took place in the region’s economy in the years number of people employed in the mining sector 1990-2017. In this period, the voivodeship unde- decreased again by another two fifths. rwent extensive internal restructuring, dealing Next to mining, the industry sectors influenced both with the necessity of reducing the workforce by in-depth restructuring after 1990 were heavy and the redundant manufacturing capability in industry (mainly metallurgy) and the energy the industries in which marketisation of the eco- industry. In both industries, there were several nomy changed the structure of economic stimuli waves of major reductions in the workforce, and the40% most, and with the necessity of building new further declines are very probable due to the competitive advantages compatible with a uniting necessity keep up with the general market trends 35% Europe. of increased productivity. 30%In the 1990s, the decreased demand for coal The changes also affected light industry, inclu- from energy users, the appearance of higher qua- ding the textile industry traditionally located in lity25% foreign competition in the steel market, and Bielsko-Biała, which was exposed to competition the departure of the textile industry to Asia, were with Asian manufacturers. These processes are 20% 25% a big shock to the local economy. The workforce in being counterbalanced by the fast development of industry15% and agriculture was decreasing, and the other manufacturing subsectorss. Production Przetwórstwo przemysłowe increasing10% in private services. The reduction of grew in the industriesGórnictwo connected with the auto- the number of jobs could be seen mainly in the motive industry (manufacturing vehicles, metal mining5% sector. In the years 1990-1999, 230 thou- and rubber products) and electromechanical 6% sand0% people left the industry, i.e. half of the people industry. Therefore, industry developed mostly in working in it in 1989, and the hard coal extraction the spheres that were the fastest in integrating decreased1995 by one third2000 (45 million2005 tonnes). 2010 with the2015 European industrial centre – the so-

During the global energy commodities boom -called Europe Factory stretching from the Atlan- r7 (2000-2007), the level of employment in the sec- tic, through the Rhine valley and Saxony, to the tor stabilised again, only to fall again in the later Czech Republic and Western Poland (see Bukow- years with the next wave of restructuring forced ski and Śniegocki 2017).

Figure 12. Share of mining and manufacturing in gross added value 40% in the Silesian Voivodeship in the years 1995-2015 (%) 35% Source: WiseEuropa based on the 30% data from Local Data Bank of Central Statistical Office. 25%

20% 25%

15% Manufacturing 10% Mining

5% 6% 0% 1995 2000 2005 2010 2015

From restructuring to sustainable development. The case of Upper Silesia 19 Box 2. INCLUSION OF CENTRAL EUROPE IN THE EUROPEAN INDUSTRIAL CENTRE AFTER 1989

Despite the restructuring challenges, the Silesian more efficient production, even now the region of Voivodeship has the advantage of a favourable Leipzig, Chemnitz and the Moravian-Silesian geographical location, distinguishing it from some Region generate more added value per capita than less centrally located heavy industry centres, such the EU average, and the Silesian and Lower Sile- as Glamorgan County in Wales. The region is an sian Voivodeships are quickly approaching this extension of the European industrial centre level. extending from the Belgian and Dutch coasts of At the beginning of the transition, the Polish and the Atlantic, along the valley of the Rhine, through Czech industrial regions had to deal with the Saxony, to the Czech Republic and Western negative legacy of socialist industrialisation: Poland. The areas located along this axis are cha- natural environment devastation, low producti- racterised by an above-average level of employ- vity of work, high material-intensity of production, ment in12 industry (see figures 1 and 2), high popu- and a small degree of its processing. However, lation density and population, and high level of thanks to the close proximity of the highly indu- le, 10 urbanisation, and, consequently, also low 2015unem- 2000strialised valley of the Rhine, the restructuring of ployment8 and a relatively high GDP per capita. heavy industry and mining was easier than in the Due to historical conditions, specifically the Iron less centrally located regions of England or Spain. 6 UE: 5,1

Curtain,ś w przemy dodana which separated East-German, Czech Apart from Lower Silesia and Eastern Saxony, ść andcapita per EUR tys. Polish4 industry from Western Europe for half Moravia and Upper Silesia have become the main Warto a century,2 there is a visible developmental gra- destination of relocated parts of the production dient extending from the West to the East along chain, allowing them to relatively easily fill in the this axis.0 The areas of Saxony, the Czech Republic, developmental gap created by heavy industry and ski skie ą skie l ą ą Lipsk ś l l ś Drezno and for example Western PolandKolonia are – despite mining not being able to withstand the confronta- opolskie Münster Detmold ł Arnsberg Chemnitz Düsseldorf similar workforce levels in industry – less develo- tion with the market woj. economy. At the same time, woj. ma ped than the vicinities of Cologne, Düsseldorf, or further diversificationwoj. dolno ś of their own production kraj morawsko- Detmold. However, since the reunification of Ger- base, including developing in their areas sectors many, transitions in the Czech Republic and and activities connected to high productivity of r13Poland, and the accession of these two countries work, high-quality workforce, and salaries attra- to the European Union, the manufacturing gro- ctive to specialists with the highest level of human

wth has been very high in their case. Thanks to the capital and know-how is still a challenge. change of industrial structure and significantly

Figure 13. Added value in industry per 1,000 12 inhabitants in the EU industrial regions in 2000 and 2015 (EUR, constant prices from 2015) 10 2015 2000 Source: WiseEuropa based on Eurostat data. 8

6 EU: 5.1

4 Value added in industry, in added Value in thousands EUR per EUR thousandsin capita 2

0 Leipzig Cologne Münster Dresden Detmold Arnsberg Chemnitz Dusseldorf Voivodeship Lower Silesian Lower Silesian Voivodeship Silesian opolskie Voivodeship opolskie ł Ma Moravian-Silesian Region

20 From restructuring to sustainable development. The case of Upper Silesia 2.2. Challenge of improving quality of life

The purely macroeconomic description is an approximate representa- tion of the quality of life in the region. From the perspective of inhabi- A COMPLEX PICTURE tants, the attractiveness of specific areas in the country is defined, OF THE QUALITY OF LIFE however, not only by the level of GDP per capita, remuneration, or the IN EUROPE IS PRESENTED unemployment rate, but also access to education, sense of security, BY THE SOCIAL PROGRESS housing conditions and the quality of the natural environment. There- INDEX (SPI) fore, industrialisation and diversification of the local economy are an important, but not the only element of development, determining competitiveness of the region in Poland and in the continent. Consequently it is also determining the demographic changes and economic and migration processes taking place in a given area. A complex picture of the quality of life in Europe is presented by the Social Progress Index (SPI) developed by the European Commission. This encompasses such 90 factors as access to the key categories of goods and services, public Zakres wartości indeksu regionalnego Średnia safety, average state of health, the quality of the natural environment, 80 or the scope of rights and liberties they are entitled to2.

70 The spread of the index values in individual countries and between Yorkshire Zagłęthembie shows that, apart from a few exceptions (Italy, Belgium), quality Ruhry 60 of life in theNord-Pas- region is largely determined by the level of development of de-Calais the country in question. The small differences between the results of 50 Śląskie

SocialProgess Index regions within individual countries are the results of interdependence 40 between economic development and social development on one hand, and on the other of generally significant capabilities of the social, edu- 30 cational and health policies to redistribute the generated GDP among gry Cypr ochy otwa garia Litwa ł Malta Dania Ł Belgia W ę

the poorer and wealthier regions, and so balanceGrecja the quality of life Polska Austria owacja owenia Czechy W ł Estonia Irlandia Francja Niemcy ł ł Szwecja Bu Holandia Rumunia S Finlandia S Hiszpania Portugalia Chorwacja W.Brytania between different parts of a given country. Among the EU Member Sta- Luksemburg tes, the highest mean value of the index is achieved by the Nordic countries – Finland (81), Denmark (81), and Sweden (80), and the lowest – Figure 14. Regional values by the countries of Central and Eastern Europe (Romania – 47; Bulgaria r14of Social Progress Index – 45). Poland is in the lower half of the ranking, with other countries of in the EU countries in 2016. 2 Most of the partial indices making up the SPI come from the statistics of Eurostat and Source: WiseEuropa based on the data from DG REGIO. national statistical agencies, including the Polish Central Statistical Office, which, in some cases (e.g. trust in public institutions), are complemented by the results of dedicated surveys.

90 Regional index scope Average 80

70 Yorkshire Ruhr 60 Nord-Pas- de-Calais

SocialProgess Index 50 Silesia

30 Italy Malta Spain Latvia Ireland Poland France Cyprus Austria Greece Croatia Estonia Finland Sweden Belgium Bulgaria Slovakia Hungary Portugal Slovenia Romania Germany Denmark Lithuania Luxembourg Czech Republic United Kingdom The Netherlands

From restructuring to sustainable development. The case of Upper Silesia 21

Central and Eastern Europe, but also with Italy and Greece, falling behind the Czech Republic, Estonia and Slovenia on one hand, but ahead for example of Hungary, Latvia, Romania, or Bulgaria on the other. THE QUALITY OF LIFE IN THE In relation to the Silesian Voivodeship, this means that the lower qua- REGION IS VISIBLY LOWER lity of20 life in the region in comparison to WesternPolska Europe względem is reszty less UE due to 20 Polska względem reszty UE THAN ACCORDING TO THE the specific15 3 nature of the Silesian Voivodeship than due to the level of 15 3 Śląskie wzglŚląskieędem wzgl resztyędem Polski reszty Polski ECONOMIC DEVELOPMENT prosperity10 of the whole country and the type of public policy in Poland. 10 Śląskie wzglŚląskieędem wzgl resztyędem UE reszty UE At the same14 time, however, the relative value of the SPI in the region INDICES, WHICH IS MOSTLY 145 compared5 to the whole of Poland is visibly lower than the relative level DUE TO THE VERY HIGH 2 2 0 0 2 2 of its economic-3 -3 development in comparison to the rest of the country. LEVEL OF AIR POLLUTION -6-1 -6 -7 -8 Whereas-5 in-1 terms of GDP-11-7 per capita-11 Silesian Voivodeship is -8209th in -5 -11-2 -11 -13 -2 -2 -13-14 Europe (out of 272 regions),-2 in relation-14 to quality-16 of-16 life it is only-19 252nd. -10 -10 -19 -25 Therefore, the relatively low-4 quality-4 of life in-25 Silesian Voivo- -15 -2 -5 -15 subindeksówciSocial Progess Index -2

ś -5 ci subindeksówciSocial Progess Index -2 -20 ś deship is less due to problems that are common-2 to the-20 whole -20 -20 country than due to the issues specific to the-5 voivodeship,-5 Warto Warto -25which-25 in this respect falls behind many of the significantly -30poorer-30 regions of the country. szego

The reasons for theszego lower quality of life in the Silesian Voivodeship are p do ICT osobista ę p do ICT rodowiska osobista ę ś rodowiska the structural problems related to the incomplete or improperly perfor - ś

Dost ść Dost med transition into a post-mining economy in the 20th century.ść At the ść Wolno ść Wolno Jako Warunki mieszkalne Warunki Jako Warunki mieszkalne Warunki

same time, the high positions in this rankingTolerancja i integracja held currently by Yorks- Tolerancja i integracja ń stwo osobiste Bezpiecze Zdrowie i dobra kondycja dobra i Zdrowie Prawa osobiste i zaufanie i Prawa osobiste ń stwo osobiste Bezpiecze Zdrowie i dobra kondycja dobra i Zdrowie p do szkolnictwa wy ż Prawa osobiste i zaufanie i Prawa osobiste

hire, the Ruhr,p do edukacji podstawowej or Nord-Pas-de-Calais indicate that former mining ę p do szkolnictwa wy ż ę p do edukacji podstawowej ę regionsę can effectively deal with this legacy. Today, it is the exceptio- Dost i podstawowa opieka zdrowotna opieka podstawowa i Dost Dost i podstawowa opieka zdrowotna opieka podstawowa i Dost ść p do wody pitnej i warunki sanitarne nally poor quality of the natural environment thatść is mainly responsible ę p do wody pitnej i warunki sanitarne ę ywno Ż ywno

for the low rating of the Silesian Voivodeship (last place among Dost the 272 Ż Dost r15 Figure 15. Values of SPI r15 subindices: differences between the Silesian Voivodeship, the rest of Poland and the rest of the EU in 2016 20 20 Śląskie Voivodeship in comparison to the rest of Poland Source: WiseEuropa based on 15 3 ŚSilesianląskie Voivodeship Voivodeship in in comparis comparisonon to to the the rest rest of of Poland Poland 15 3 the data from DG REGIO. Poland inPoland comparison in comparison to the rest to theof EU rest of EU 10 10 Śląskie VoivodeshipŚląskie Voivodeship in comparison in comparison to the rest to theof EU rest of EU 14 14 Silesian Voivodeship in comparison to the rest of EU 5 5 0 2 2 2 0 -3 2 -3 -6 -7 -5 -6 -7 -8 -8 -5 -1 -11 -11 -11 -11 -1 -14-13 -13 -14 -16 -16 -19 -10 -10 -2 -19 -2 -25 -2 -2-4 -4 -25 -15 -15 -5 -5 -20 -2 -20 -20 -20 -2 -2 -2 -5 -5

Values of subindicesof SocialProgess Index -25

Values of subindicesof SocialProgess Index -25 -30 -30 Access to ICT Access to ICT Personal security Personal Personal freedom Personal Personal security Personal Housing conditions Housing Personal freedom Personal Housing conditions Housing conditions Personal rights and trust conditions Tolerance and integration Personal rights and trust Health and good condition Quality of the environment Quality Tolerance and integration Food and basic health care health Food and basic Access to higher education Health and good condition Quality of the environment Quality Access to primary education Food and basic health care health Food and basic Access to higher education Access to primary education Access to drinking water and sanitary Access to drinking water and sanitary

22 From restructuring to sustainable development. The case of Upper Silesia analysed European regions), including in particular the high level of air pollution, which affects the health of the region’s inhabitants. This result is also confirmed in other sources: according to the statistics of the World Health Organisation, as many as 36 out of 50 of the Euro- SOLID FUELS USED FOR pean cities most polluted with PM10 and PM2.5 particles are in Poland. HEATING PURPOSES IN Among them, 13 are in the Silesian Voivodeship – they are both small HOUSEHOLDS ARE THE MAIN towns like Żywiec or Rybnik, and the biggest cities of the region – Biel- SOURCE OF AIR POLLUTION sko-Biała, Sosnowiec, and Katowice, for instance. According to data provided by the Voivodeship Environment Inspectorate, in 2016, in all the five zones of the Silesian Voivodeship, the admissible levels of PM10 particles were exceeded. This significantly increases the risk of developing circulation and respiratory problems in the region.

Diagram 1. The most polluted cities in Europe in relation to exceeded PM2.5 standards

Source: WiseEuropa based on the WHO Global Ambient Air 50 of the most polluted European cities in 2016 were in only four countries: Quality Database. Bulgaria, Poland, the Czech Republic and Italy

36 of them were in Poland

13 of them were in the Silesian Voivodeship

The most polluted cities and towns of the region included: Żywiec (4th place in the ranking, Rybnik (5th place), and Pszczyna (6th place)

The sources of the pollution are mostly solid fuels used for heating buildings, but also other branches of the economy, such as heavy industry, the mining industry, energy industry and transport. The quality of air in the region is affected by all the solid fuels used for individual heating of buildings, even the high-quality ones. They are not purified, their fumes are not filtered, and are emitted at low altitudes, so they are a major factor in the significant air pollution in the densely populated areas. Therefore, to solve the problem of poor air quality in the Silesian cities, it is not enough to increase the average quality of solid fuels. It is necessary to popularise the centralised heating systems, gas heating, and also electric heating in combination with significant increase of the heating efficiency of buildings in Silesia.

From restructuring to sustainable development. The case of Upper Silesia 23

0,5%

2017 2003 0,4%

0,3%

0,2%

0,1%

0,0% skie It is alsoskie worth noting the environmental problems not included in the ą ą l l ódzkie Polska ś ł opolskie opolskie lubuskie ł lubelskie THE LONG-TERM podlaskie

SPI. The long-termtokrzyskie industrial activity and the high intensity of econo- pomorskie ę ma ś dolno mazowieckie wielkopolskie wi podkarpackie mic exploitationś of the Silesian Voivodeship’s resources are responsible INDUSTRIAL ACTIVITY AND ń sko-mazurskie for it being the region with the most deteriorated and devastated areas THE HIGH INTENSITY OF zachodniopomorskie kujawsko-pomorskie surface-wise in the country. Withinwarmi the last ten to twenty years there ECONOMIC EXPLOITATION has been an improvement. However, it is much slower than in the case OF THE SILESIAN of other voivodeships in Southern Poland (Opolskie, Małopolskie, r16 VOIVODESHIP’S RESOURCES Lower Silesian). IS RESPONSIBLE FOR IT BEING THE REGION WITH THE MOST DETERIORATED 0,5% AND DEVASTATED AREAS

0,4% 2017 2003 SURFACE-WISE IN THE COUNTRY 0,3%

0,2%

0,1%

Figure 16. Deteriorated 0,0% and devastated areas in skie

ą voivodeships (as a percentage l ódzkie Poland ś Ł opolskie Opolskie ł of total areas) in the years Lubuskie Lubelskie Podlaskie tokrzyskie Pomorskie ę

Ma 2003 and 2017 Dolno Mazowieckie wi Podkarpackie skie (Silesian) skie Wielkopolskie Ś ą l ń sko-Mazurskie Ś Source: WiseEuropa based on Zachodniopomorskie Kujawsko-Pomorskie

Warmi Local Data Bank of Central Statistical Office.

A factor inhibiting the process of redeveloping post-industrial areas is the often unclear legal status of the real estates. Areas in city centres are also subject to conservation regulations. Additional costs and admini- strative obstacles discourage potential private investors, and the resources of local authorities do not allow post-industrial areas to be sufficiently redeveloped, especially if this involves purifying contaminated soil and restoring ecological balance (see Bolek 2016). At the same time, THE EXTENSIVE MINING the extensive mining damage, wherever mines are operated or used to DAMAGE IN MANY AREAS be operated, have a negative effect on attractiveness with regard to IN THE VOIVODESHIP HAS commerce and quality of life of many areas in the voivodeship – they A NEGATIVE EFFECT ON THE raise the infrastructure maintenance costs, decrease the quality of life ATTRACTIVENESS OF THE of inhabitants, and reduce investors’ interest in completing project in the area in question. AREA WITH REGARD TO COMMERCE AND QUALITY Analysis of the Social Progress Index is complemented by analysis of OF LIFE immaterial factors, making up the subjective assessment of the quality of life. A comprehensive picture of how it is perceived by the inhabitants of Upper Silesia is provided by successive editions of the Social Diagno- sis (Tab. 2)3.

3 The Social Diagnosis research study focuses on collecting information regarding the conditions and the quality of life of Poles, based on their own reports. The information is collected via questionnaires filled out by household members included in the study. In years 2000-2015, eight editions of the study were performed.

24 From restructuring to sustainable development. The case of Upper Silesia According to the results of the last study from 2015, the Silesian Voivo- deship was 6th among 16 voivodeships with regard to the quality of life. Since 2009, it has consistently been placed in the ranking behind the Pomorskie Voivodeship, Mazowieckie Voivodeship, Małopolskie Voivo- deship and Wielkopolskie Voivodeship, which held the top positions. Silesian Voivodeship was ranked highest in relation to psychological well-being and civilisational level of the inhabitants. It was given the lowest score for social well-being (10th place) and freedom from pathological problems (13th place), for which the result was especially poor in the Katowice and Bytom subregions, but also in the Tychy and Bielsko- -Biała subregions. Thus, the aforementioned low level of poverty in Silesia does not auto- matically translate into a lack of social problems. On the contrary – they appear with particular intensity in the areas affected by restructuring of the traditional branches of industry, regardless of whether this process is going well economically.

Table 2. Quality of life Silesian Voivodeship in the in the Silesian Voivodeship Quality of life Description compared with the rest of the X ranking of 16 voivodeships country according to Social Diagnosis 2015 sense of happiness, assessment of whole life so far, inten- Psychological sified symptoms of psychological depression, assessment well-being 4 Source: WiseEuropa based on of the past year the data from Social Diagnosis 2015. level of education, having and using consumer electronics and Civilisational level 5 ICT, active knowledge of foreign languages, driver’s licence

Financial well-being 6 income, number of goods and appliances in the household

activities for the local community, participation in elections and non- -obligatory meetings, positive attitude towards democracy, member- Social capital 6 ship in organisations and holding a function in them, conviction that most people can be trusted

intensification of somatic symptoms, serious illness in the past year, Physical well-being 6 level of disability, intensification of stress in relation to health

Freedom from stress regarding experiences in: finances, work, contact with state life stress 8 agencies, bringing up children, marital relationship, ecology

Social no sense of alienation, sense of being loved and respected, well-being 10 number of friends

Freedom from pathological problems include alcohol and drug abuse, smoking, pathological 13 visits to a psychiatrist or a psychologist, being a perpetrator problems or a victim of a crime

This does not mean that successful economic restructuring is not important for the social aspects of quality of life. According to Social Diagnosis, the most economically developed subregions of the Silesian Voivodeship, the Tychy and Gliwice subregions, are at the same time among the top five subregions in Poland in terms of quality of life. On the other hand, the Częstochowa subregion was among the areas with the lowest score, falling behind areas affected by restructuring such as the Bytom subregion.

From restructuring to sustainable development. The case of Upper Silesia 25

Siemianowice Śląskie Bytom

7% Chorzów rednia 2015-2017) rednia Also,ś the statistical data show a clear correlation between the level of unemployment6% and the risk of poverty in a given area. The city where THE STATISTICS SHOW powiat żywiecki powiat zawierciański the problems of unemploymentZabrze and poverty in the region is most powiat myszkowski A CLEAR CORRELATION intense is Bytom. This is also a cityŚ inwiętoch whichłowice the most inhabitants use Ruda Śląska powiat częstochowski BETWEEN THE LEVEL community5% socialKatowice services, whereas in Upper Silesia there are centres ecznej, % populacji ( populacji % ecznej, (Siemianowiceł and Chorzów) with a similar range powiat of services będziński and a OF UNEMPLOYMENT AND THE RISK OF POVERTY significantly lower level of unemployment. AnSosnowiec example of a prosperous centre4% with above-average exclusion problems is also Katowice. IN A GIVEN AREA Piekary Śląskie The cities that are bestGliwice at dealing with social problems using strictly economic tools are Bielsko-Biała, Tychy and the nearby Bieruńsko- 3% Bielsko-Biała

-Lędzińskirodowiskowejspo pomocy (formerly the Tyski) Poviat, i.e. the centres that do not have ś Tychy g ę to bear the largepowiat burden bieruńsko- of post-mining structural problems. To sum up,Zasi although economiclędziński developmentŻory facilitates an increase in the level of social2% well-being in a given area, and this is hampered where there is 2% 4% 6% 8% 10% 12% 14% 16% no economic development, the quality of social policy is also significant. This is characteristic notStopa only bezrobocia of the rejestrowanego Silesian Voivodeship: (średnia 2015-2017) comparable differences can beGórno observedśląsko-Zag forłębiowska example Metropolia betweenReszta the województwa Łódź andśląskiego Piot- rków subregions, or between the eastern and western Warsaw subre- R18gions.

Siemianowice Śląskie Bytom

7% Chorzów

6% Zabrze Żywiecki Poviat Zawierciański Poviat Figure 17. The differences in Myszkowski Poviat the level of unemployment and Ruda Śląska Świętochłowice Częstochowski Poviat the reach of social assistance 5% Katowice in cities and poviats in the Będzin Poviat Silesian Voivodeship, 2015-2017 Sosnowiec

Reach of social assistance, of social Reach 4% Rybnik Source: WiseEuropa based on Piekary Śląskie Raciborski Poviat the data from Local Data % of population (average of 2015-2017) 2015-2017) of (average population of % Gliwice Mysłowice Bank of Central Statistical Office. 3% Bielsko-Biała Tychy Bieruńsko-Lędziński Poviat Żory 2% 2% 4% 6% 8% 10% 12% 14% 16%

Registered unemployment rate (average of 2015-2017)

Metropolitan Association of Upper Silesia and Dąbrowa Basin Rest of Silesian Voivodeship

26 From restructuring to sustainable development. The case of Upper Silesia Box 3. LOW LEVEL OF POVERTY IN THE SILESIAN VOIVODESHIP

The Silesian Voivodeship is one of the regions rable groups, i.e. children and the elderly, is low in in Poland that have the least problems with the Silesian Voivodeship, in which one factor, poverty – both absolute and relative. Despite the apart from a high level of urbanisation and indu- intensive restructuring processes, from 1990 strialisation, is the model of social transfers – onwards the voivodeship never experienced large- above-average benefits are offered not only to -scale unemployment, as the quick development people working in mining and heavy industry, but

of the manufacturing and services helped at least also to their families. This reduces poverty and one person in a household to find a job even in the unemployment, but it also raises the level of pro- 20% 19% 2016 2005 most difficult periods in the employment market fessional inactivity in the 15-34 and 55+ age 16% (1990-1993 and15% 2001-2003). The Silesian15% Voivo- groups. 16% 14% 14% deship is one of the most13% urbanised,13% and, at the13% As 13% a result, in the Silesian Voivodeship, only 12% 11% same12% time, one of the regions in Poland with the 3% of households are at risk of extreme poverty, 10% 10% 10% best internal9% transport9% connections. A8% person loo- which makes it9% one of the least affected regions in 8% 8% 8% king for8% employment is not limited to the local job the country. For comparison, currently, in Eastern market, which increases their5% chances5% 5% of finding a Poland, almost 10% 5%of inhabitants are at risk of 4% 4% 4% job. The threat of poverty among the most vulne- 3%extreme3% 3% poverty 4% 3% 2% Odsetek gospodarstw(%) domowych

0% skie skie ą ą l l ódzkie Polska ś ł opolskie opolskie lubuskie THE SILESIAN VOIVODESHIP IS ONE ł lubelskie podlaskie tokrzyskie pomorskie ę ma ś dolno mazowieckie wi wielkopolskie podkarpackie OF THE REGIONS IN POLAND THAT ś ń sko-mazurskie HAVE THE LEAST PROBLEMS WITH

Figure 18. Percentage of households at risk of extreme zachodniopomorskie kujawsko-pomorskie poverty in 2005warmi and 2016 (%) POVERTY – BOTH ABSOLUTE AND r17Source: WiseEuropa based on the data from Local Data RELATIVE Bank of Central Statistical Office.

20% 19% 2016 2005 16% 15% 15% 16% 14% 14% 13% 13% 13% 13% 12% 11% 12% 10% 10% 10% 9% 9% 8% 9% 8% 8% 8% 8% 5% 5% 5% 5% 4% 4% 4% 4% 3% 3% 3% 3% Percentage of households (%) households of Percentage 2%

0% skie ą l ódzkie Poland ś Ł opolskie Opolskie ł Lubuskie Lubelskie Podlaskie tokrzyskie Pomorskie ę Ma Dolno Mazowieckie wi Podkarpackie Wielkopolskie (Silesian) skie Ś ą l ń sko-Mazurskie Ś Zachodniopomorskie Kujawsko-Pomorskie Warmi

From restructuring to sustainable development. The case of Upper Silesia 27 © R. Kaźmierczak / Marshal Office of the Silesian Voivodeship

2.3. Demographic challenge

The Silesian Voivodeship is inhabited by approximately 4.5 million people, i.e. one eighth of the population of Poland. The population is evenly distributed between the mining and non-mining municipalities, with approximately half of them living in the areas historically connected with hard coal mining. Almost one third of the population lives in the areas with operational mines. In the scale of the whole voivodeship, only the Bielsko-Biała and Czę- stochowa subregions do not have any historical ties to mining, although, THE SILESIAN VOIVODESHIP in the past, they had industries dealing with the restructuring problem IS INHABITED BY APPROXI functioning within their boundaries: the textile and metallurgical industries. At the same time, the subregions with a productivity level and MATELY 4.5 MILLION GDP per capita lower than the country average (the Sosnowiec, Rybnik, PEOPLE, I.E. ONE EIGHTH Częstochowa, and Bytom subregions) are inhabited by approximately OF THE POPULATION half of the voivodeship’s population. Therefore, regional development OF POLAND. will depend either on maintaining the hitherto interregional growth structure and inducing migration within the Silesian Voivodeship, or on the region’s capability to perform internal restructuring, so inducing quick development also of the areas that have been participating in it to a lesser degree. Slightly different opportunities and risks are connected to both of these scenarios. The former requires maintaining quick growth of labour productivity in the Upper-Silesian development centres,

28 From restructuring to sustainable development. The case of Upper Silesia

800

700

600

ci (tys.) ci 500 ś

400

300 Liczba ludno Liczba 200

100

0 Tyski Bielski Gliwicki Rybnicki Bytomski Katowicki stochowski ę Sosnowiecki Cz even if they are close to the averagegminy European górnicze z aktywnymi level kopalniami of industrialisation and GDP per capita. At the same gminytime, górnicze these ze regions zlikwidowanymi would kopalniami have to start attracting a large number of newgminy inhabitants niegórnicze or employees commuting from less-developed areas, which requires major changes in housing R19 and transportation infrastructures of the whole region. In the latter scenario, the less-developed areas of the Silesian Voivodeship would

have to be made more attractive investment-wise, and draw more investment in production to the area than before.

Figure 19. Number of people 800 living in mining and non- 700 mining municipalities in Silesian subregions (NUTS 3 600 statistical areas) in 2016 (in thousands of people) 500 400 Note: mining municipalities are defined as municipalities 300 in which hard coal mines have 200 been or used to be operated. 100 Popuplation (thousands of people) of (thousands Popuplation Source: WiseEuropa based on 0 Eurostat data. a subregion a ł Tychy subregion Bytom subregion Rybnik subregion Gliwice subregion Gliwice Katowice subregion Katowice stochowa subregion Sosnowiec subregion Sosnowiec ę Bielsko-Bia mining municipalities with active mines Cz mining municipalities with closed mines non-mining municipalities

In this context, the decreasing number of inhabitants of the Silesian THE POPULATION IN Voivodeship, which is a consequence of low rate of natural increase and emigration, is a big challenge. Demographic forecasts produced by the MINING MUNICIPALITIES Central Statistical Office indicate that in the long term these tendencies DECREASED BY 8.3% will continue, and the decrease in the number of region inhabitants in BETWEEN 2000 AND 2017. the years 2017-2030 will clearly be more pronounced than in the years BY 2030 IT IS EXPECTED TO 2000-2015, also in comparison to the whole country. The Central Stati- SHRINK BY ANOTHER 8.5% stical Office predicts that in 2030 the population in Poland will be 2.1% lower, and in the Silesian Voivodeship even 5.7% lower, than in 2017. Meanwhile, maintaining the high level of economic development in the region will be a lot more difficult if the shortfall of over 250 thousand people is not replenished by immigration either from other regions or from abroad. The forecast produced by the Central Statistical Office shows a significant discrepancy between the mining and non-mining regions. In mining municipalities, a decrease in population is predicted of as much as 8.5 %, and in non-mining municipalities only 2.7%, which is approximately the same as in the rest of the country. Therefore, the number of inhabitants of Silesian Voivodeship will decrease the most in the Katowice and Sosnowiec subregions, which are the most affected by the restructuring of hard coal mining, and it will remain the same in the subregions of Tychy and Bielsko-Biała, i.e. the ones not burdened with the necessity of transition.

From restructuring to sustainable development. The case of Upper Silesia 29 DEPOPULATION

The number of inhabitants will decrease the most in the Katowice and Sosnowiec subregions, which are and were the most affected by the restructuring of hard coal mining. The population will remain the same in the subregions of Tychy and Bielsko-Biała, i.e. the ones not strongly affected with the necessity of transition © S. Szwajczak / Marshal Office of the Silesian Voivodeship

6% 3,6% 3,9% 4%

2% Polska: +0,5% 0% 0,0% -2% ci w okresie 2000-2017 okresie w ci

ś -1,9% -4% woj. śląskie: -4,4% -6% -5,2%

-8% -7,3% -7,1% -10% -8,3% -9,4% -9,0% Zmiana liczby ludno liczby Zmiana -12% Tyski Bielski Gliwicki Rybnicki Bytomski Katowicki stochowski ę Sosnowiecki Cz Gminy górnicze Gminy Gminy niegórnicze

R20

0% -1% -0,3% -0,4% -2% Polska: -2,1% -3% Figure 20. Change in the 6% -2,7% total population in subregions -4% 3,6% 3,9% 4% and groups of municipalities

ci w okresie 2017-2030 okresie w ci -5% ś -4,6% in the years 2000-2017 (%) 2% Poland: +0.5% -6% woj. śląskie: -5,7% 0% -6,0% Source: WiseEuropa based -7% 0,0% on the data from Central -2% -8% -7,2% -7,2% Statistical Office. -1,9% -4% -9% -8,5% Zmiana liczby ludno liczby Zmiana -9,0% -9,1% -10%-6% Silesian Voivodeship: -5,2% -4.4%

-8% Tyski -7,1% Population change, 2000-2017 change, Population

Bielski -7,3% Gliwicki Rybnicki Bytomski -10% Katowicki -8,3% stochowski -9,0% ę -9,4% Sosnowiecki Cz -12% górnicze Gminy Gminy niegórnicze

a subregion a ł Tychy subregion Bytom subregion Rybnik subregion Gliwice subregion Gliwice Katowice subregion Katowice

R 21 stochowa subregion Mining municipalities Sosnowiec subregion Sosnowiec ę Bielsko-Bia Cz Non-mining municipalities

0% Figure 21. Forecast of change -1% -0,3% -0,4% in the total population in -2% subregions and groups of municipalities in the years -3% Poland: -2.1% -2,7% 2017-2030 (%) -4% -5% -4,6% Source: WiseEuropa based -6% on the data from Central Silesian Voivodeship: -6,0% Statistical Office. -7% -5.7%

Population change, 2000-2017 change, Population -8% -7,2% -7,2%

-9% -8,5% -10% -9,0% -9,1% a subregion a ł Tychy subregion Bytom subregion Rybnik subregion Gliwice subregion Gliwice Katowice subregion Katowice stochowa subregion Mining municipalities ę subregion Sosnowiec Bielsko-Bia Cz

Non-mining municipalities

It is worth noting that the depopulation processes in Upper Silesia are nothing new. According to the data from the Central Statistical Office, AS THE TRANSITION OF R 20-21 razem the overall population in Poland in the years 2000-2017 increased by THE MINING SECTOR IS FAR 0.5%, but this was not the case in the Silesian Voivodeship, in which the FROM OVER, THE WHOLE population decreased by 4.4%. The decrease in population was greater only in the Łódzkie Voivodeship – also affected by the problem of SILESIAN VOIVODESHIP, AND restructuring – and in the Opolskie Voivodeship, where emigration ESPECIALLY THE AREAS abroad had a major impact. Characteristically, the mining municipali- WITH OPERATIONAL MINES, ties were responsible for the decrease in the region’s population. In the WILL HAVE TO DEAL WITH years 2000-2017, the number of people who lived in these areas decre- DEPOPULATION PRESSURE ased by 8.3%, while the number of inhabitants of non-mining areas remained unchanged. This means that there was emigration from the voivodeship and migration within the voivodeship in search for better living and employment conditions. The intensity of economic problems of the transition period and the capability of making use of the opportunities provided by accession to

32 From restructuring to sustainable development. The case of Upper Silesia

30% 0% ci ś tyski rybnicki tyski 25% -10% ci publicznej ci ś częstochowski katowicki 20% bielski

ż yteczno -20% rybnicki em w 2000 r. 2000 w em ł gliwicki bytomski 15% the European Union influenced-30% the degree to sosnowieckiwhich individual parts of gliwicki the Silesian Voivodeship were affected by the depopulation problem. katowicki The subregions of Bielsko-Biała and Tychy, which are rapidly develo- 10% -40% ping economically are the only ones in which the number of inhabitants sosnowiecki has increasedbielski in the last 2000-2015 latach w publicznej ten to twenty years. This cannot be said about jako % zatrudnienia ogó zatrudnienia % jako 5% the Gliwice region, which,-50% despite good economic results, was at the bytomski same time one of the regions with the greatest changes in hard coal częstochowski Zatrudnienie w górnictwie i sektorze u sektorze i górnictwie w Zatrudnienie 0% mining in the 1990s,u ż yteczno sektorze i górnictwie w zatrudnienia Zmiana which-60% translated into decreased demand for -8% -6% -4% -2%employees 0% 2% in this 4% industry and-8% emigration -6% -4% of some-2% mining 0% 2% families 4% Saldo migracji w latach from2000-2015 the (%) region. The highly productiveSaldo industrial migracji w latach plants 2000-2015 located (%) in this subregion did not create enough jobs to compensate for this outflow. As the transition of the mining sector is still far from over, the whole Sile- R23 R22 sian Voivodeship, and especially the parts with still operational mines, will still have to deal with depopulation pressure.

30% 0% Rybnik Tychy subregion subregion

25% -10% Częstochowa Tychy subregion Bielsko-Biała Katowice subregion subregion Rybnik subregion 20% -20% subregion Gliwice e mining and utility sector, utility and mining e Gliwice Sosnowiec subregion -30% 15% subregion subregion

Bytom 2000-2015 subregion Katowice -40% 10% subregion and utility sector in 2000 in sector utility and Sosnowiec Bielsko-Biała subregion subregion 5% -50% Bytom Proportion of people employed in the mining the in employed of people Proportion subregion

Częstochowa th in employment in Change subregion 0% -60% -8% -6% -4% -2% 0% 2% 4% -8% -6% -4% -2% 0% 2% 4%

Migration balance in years 2000-2015 (%) Migration balance in years 2000-2015 (%)

Figure 22. Total migration balance in years 2000-2015 Figure 23. Migration balance and change in the and the percentage of people employed in mining and the percentage of people employed in mining and the public utility sector in 2000 utility sector in the years 2000-2015

Source: WiseEuropa based on Eurostat data. Source: WiseEuropa based on Eurostat data.

The demographic problems of the Silesian Voivodeship are caused by both the negative rate of natural increase, and the outflow of people to other regions and abroad. The negative rate of natural increase in the region has so far affected mainly the mining municipalities. Depopula- tion also has the side-effect of an increasingly aging population. It has almost the fastest rate for this process in the country, and the ratio of people in pre-working age, post-working age, and working age is becoming less and less favourable. By 2030, the percentage of working-age people (aged 15-64) in the population of the voivodeship will fall to 62% – almost 10 p.p. lower than in the year 2000. The intensive change in the age structure of the population due to people moving from the 15-64

From restructuring to sustainable development. The case of Upper Silesia 33

74% 15-64 72%

70%

68%

66% age group to the 65+ age group will be especially visible in the mining municipalities. In the years 1995-2015, the percentage of64% people of working age was higher in these municipalities than in non-mining municipalities or in the rest of Poland. However, according to62% the forecast by the Central Statistical Office, after 2015 this will not be maintained. This conclusion reinforces the theory that new60% inhabitants 1995 2000 2005 2010 2015 2020 2025 2030 will have to be attracted to the region, especially young people and families with children, to fill up the gap ingminy workforce niegórnicze gminy górnicze Polska that will exist in many parts of the voivodeship in the next decade. R24B

24% 74% 0-14 15-64 22% 72%

70% 20%

68% 18% 66%

16% 64%

14% 62%

12% 60% 1995 2000 2005 2010 2015 2020 2025 2030 1995 2000 2005 2010 2015 2020 2025 2030

28% non-mining municipalities mining municipalities Poland R24A 26% 65+ Figure 24. Ratio of population aged 0-14, 15-64 and 24% 65+ to the total population in the years 1995-2030 in Poland and in the Silesian Voivodeship 22% 20% Source: WiseEuropa based on the data from Local Data Bank of Central Statistical Office. 18%

16%

14%

12% FAST AGING OF THE SOCIETY 10% IS OBSERVED. BY 2030 THE 8% 1995 2000 2005 2010 2015 2020 2025 2030 SHARE OF PEOPLE IN THE WORKING AGE (15-64) IN THE R24C VOIVODESHIP WILL FALL TO 62%: ALMOST 10% LOWER THAN THE VALUE IN 2000

34 From restructuring to sustainable development. The case of Upper Silesia In recent years both the balance of internal migration and migration abroad was negative. Reversal of this trend seems to be one of the key developmental challenges of the region in the years to come. Changing the migration balance from negative to positive – although difficult – 150 may be easier123 122 (due118 to international migration) than changing the ferti- lity and100 birth patterns81 in the region. However, this requires ren- 60 dering the region attractive33 to potential immigrants by 50 24 23 making it more attractive both in terms of the job market and the living0 conditions of its population. This will require -1 -4 -13 a major-50 effort on the part of the local authorities-20 -28 and coope- -36 -45 ration from the central government. As the region is-58 industrially -100 -85 oriented and still faces significant restructuring challenges in many parts,osób 1000 na naturalny Przyrost -150 this problem, however, is especially urgent. Economic development-200 of the Silesian Voivodeship conditional upon it continuing-170 to skie skie ą attract investments in industry and services at a level notą only capable l l ódzkie ś ł opolskie opolskie lubuskie ł lubelskie podlaskie tokrzyskie

of compensatingpomorskie for the outflows from the mining industry and its rela- ę ma ś dolno mazowieckie wielkopolskie wi podkarpackie ś

ted fields, but also sufficient to achieve productiongminy górnicze levels per capita ń sko-mazurskie gminy niegórnicze

comparable at least with the Europeanzachodniopomorskie average. The gap in production kujawsko-pomorskie

warmi per inhabitant of not only the most industrialised regions of the EU, but also,5% but not only, of the south-eastern federal states in Germany is still R25 4,1% big, and4% eliminating it requires both capital to increaseSaldo migracji productivity wewnętrznych in 3% companies, and1,6% 1,2%an uninterrupted influx of humanSaldo migracjiresources zagranicznych ensuring 2% 0,7% that 1%the region will remain attractive to investors. ci w 2000 r.) 2000 w ci ś 0% -1% 150 123 122 118 -0,3% -1,1% -2% 100 81 -1,2% -1,4% -1,4% Figure 25. Total rate of 60 -1,8% -3% -2,5% -2,5% natural population growth in 50 33 -3,0% -4% 24 23 -3,4% -3,5% Polish voivodeships in the -5% -4,3% years 1995-2016 per 1,000 0 skie -1 -4 skie ą people ą l l -13 Saldo migracji (% ludno (% migracji Saldo ódzkie ś -50 ł -20 -28 opolskie opolskie lubuskie ł -36 lubelskie podlaskie

-45 tokrzyskie pomorskie

ę -58 ma

Source: WiseEuropa based on ś dolno mazowieckie wi wielkopolskie -100 podkarpackie

ś -85

Eurostat data. ń sko-mazurskie per per inhabitants 1,000 -150 Natural population growth zachodniopomorskie kujawsko-pomorskie warmi -200 -170 skie ą

R26 l ódzkie ś Ł opolskie Opolskie ł Lubuskie Lubelskie Podlaskie tokrzyskie Pomorskie ę Ma Dolno Mazowieckie wi Podkarpackie skie (Silesian) skie Wielkopolskie Ś ą l ń sko-Mazurskie Ś Zachodniopomorskie Kujawsko-Pomorskie mining municipalities Warmi non-mining municipalities Figure 26. Total balance 5% 4,1% of internal migration and Balance of internal migrations 4% migration abroad in Polish 3% Balance of migrations abroad voivodeships in the years 1,6% 1,2% 2% 0,7% 2000-2015 in relation to the 1% population in 2000 (in 0% thousands of people) -1% -0,3% -2% -1,1% -1,2% -1,4%

Migration balance Migration -1,4% Source: WiseEuropa based on -1,8% -3%

Eurostat data. 2000) in population of (% -2,5% -2,5% -3,0% -4% -3,4% -3,5% -5% -4,3% skie ą l ódzkie ś Ł opolskie Opolskie ł Lubuskie Lubelskie Podlaskie tokrzyskie Pomorskie ę Ma Dolno Mazowieckie wi Podkarpackie skie (Silesian) skie Wielkopolskie Ś ą l ń sko-Mazurskie Ś Zachodniopomorskie Kujawsko-Pomorskie Warmi

From restructuring to sustainable development. The case of Upper Silesia 35

3. HOW TO SUPPORT SUSTAINABLE DEVELOPMENT IN THE REGION?

3.1. Changes in the mining and energy industries

Inevitability of change As early as in the second half of the 19th century, the availability of rich deposits of hard coal determined the economic profile of Upper Silesia, THE AVAILABILITY OF when the mines and steelworks located there initiated intensive urbani- RICH DEPOSITS OF HARD sation and a rapid increase in the region’s population. This trend was COAL DETERMINED THE reinforced in the 20th century, when hard coal became the basic fuel for ECONOMIC PROFILE OF the energy sector and industry. As a result of these processes, in Upper Silesia, a symbiosis was created between hard coal mining, the energy UPPER SILESIA IN THE sector and heavy industry. As industrialization progressed, coal extra- SECOND HALF OF THE 19TH ction in the Silesian mines was increasing, reaching an all-time high by CENTURY the end of the 1980s. Around the year 1990, this trend reversed and the Silesian mines started quickly reducing coal production for energy and industrial purposes, largely following the pattern known from other European countries, such as the UK, Germany, France, and Belgium, in which, after the fuel crises of the 1970s, technological reconstruction was implemented – both in industry and the energy sector, and demand A SYMBIOSIS BETWEEN for coal fell. Combined with the increasing costs of mining induced by HARD COAL MINING, the deteriorating geological conditions and rising pay in the overall THE ENERGY SECTOR AND economy, hard coal production started declining, focusing on the most HEAVY INDUSTRY WAS economical deposits (Bukowski et al. 2015). The reason for this was CREATED IN UPPER SILESIA, competition with regard to pay with the manufacturing, offering an REACHING AN ALL-TIME alternative career path for skilled workers. Maintaining productivity at a level allowing sufficiently high pay requires production to be more HIGH BY THE END OF THE mechanized and a focus it on the most economically promising depo- 1980S sits, which translates into gradual reduction of the workforce and the level of extraction in the sector.

36 From restructuring to sustainable development. The case of Upper Silesia

120

300 100 1996

80 250

60 200 mln ton mln 40 150 2009 2003

20 100

Zatrudnienie -Zatrudnienie osób tys. 2017 0 50

-20 0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 400 500 600 700 800 900

Produktywność wydobycia - tony na pracownika rocznie Zużycie krajowe Eksport netto Wydobycie

R28 R27

300 120 1996 100 250

80 200

60 150 2009 2003 40

millions of of tonnes millions 100 20 2017 Employment – Employment people of thousands 50 0

-20 0 400 500 600 700 800 900 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Productivity of extraction – tonnes per employee annually Domestic use Net export Extraction

Figure 27. Extraction, domestic use and net export Figure 28. Employment in mining and efficiency of hard of steam coal in Poland, 1990-2017 coal extraction in Poland in the years 1996-2017

Source: WiseEuropa based on Eurostat data Source: WiseEuropa based on Eurostat data and Bukowski et al. (2015). and Bukowski et al. (2015).

Areas of change The detailed forecast of the level of extraction and number of people employed in the sector up until 2050 confirms that this trend will be sustained in the future: the wage increases necessary to achieve the BEFORE 2050 THE LAST level of prosperity enjoyed in Western Europe will force the Silesian UPPER SILESIAN MINES mining sector to achieve a significant improvement in extraction pro- PRODUCING STEAM COAL ductivity, limit its volume, and significantly decrease the workforce. CAN BE EXPECTED TO Before 2050, the last Upper Silesian mines producing steam coal can be CEASE OPERATING expected to cease operating. Production of coke will probably go on longer, however, the number of people employed in the sector will fall below the level of 10 thousand people, i.e. more than seven times below the current level (Fig. 29). Even if the forecast takes into consideration the opening of the two new mines announced in the Programme for Silesia (leaving aside the problem of social acceptance for these investments by the local communities), the picture of the decline in the sector is not going to change – the prospects for the resource supply and the role of the industry in the

From restructuring to sustainable development. The case of Upper Silesia 37

80 60 Węgiel energetyczny Węgiel energetyczny 70 Węgiel koksowy Węgiel koksowy 50 Nowe projekty (Program dla Śląska) 60 Nowe projekty (Program dla Śląska)

40 50

40 30

tys. osób 30 mln ton mln 20 20

10 10 regional labour market will decrease year by year. The current situation, in which mining is no longer able to satisfy the domestic 0demand for 0 2018 2020 2030 2040 2050 coal, is therefore2018 a 2025 permanent 2030 one. 2040 Without 2050 reconstructing the production capacities in the domestic energy industry (starting with the Silesian Voivodeship) and limiting the demand for coal from other

economic sectors, a significant increase in imports of this resource will be inevitable . R31B R31A

Hard coal extraction Number of people employed in hard coal mining 80 60 Steam coal Steam coal 70 Coking coal Coking coal 50 New projects (Programme for Silesia) 60 New projects (Programme for Silesia)

40 50

30 40

thousands of people of thousands 30 millions of of tonnes millions 20 20

10 10

0 0 2018 2025 2030 2040 2050 2018 2025 2030 2040 2050

Figure 29. Extraction and the number of people employed in hard coal mining in the Silesian Voivodeship, forecast for the years 2018-2050

Key assumptions: 1) the steam coal price in long-term stabilised at a level of PLN 335 per tonne, and coke – PLN 770 per tonne (in real 2018 prices); 2) we take into consideration the announcements concerning opening of two new mines included in the Programme for Silesia; 3) the minimum sales profitability allowing for the operation of mines is at the level of 7.5% (with typical market values of 15%), which ensures the means for investments and maintaining liquidity in periods of recession; 4) mines in Silesia will gradually increase productivity in order to boost revenues per employee and be able to pay competitive remuneration (rising in accordance with the trend for the whole economy). The maximum level of productivity that can be attained is 1400 tonnes per employee until 2025 and 2000 tonnes per employee in the years 2030-2050.

Source: WiseEuropa’s own forecasts.

The scale of the workforce and the pace at which it is being restricted in the sector in the coming decades will be a challenge for the labour market. In the period up until the 2030s, the main problem will be the shortage of permanent (based on profitable extraction and taking into consideration growing expectations of miners with regard to pay) jobs in the sector. Technological modernisation of the sector (e.g. the development of “intelligent mines”) will not solve this problem, as the necessary innovations improving the competitiveness of mining will have to severely limit the labour costs, and, therefore, the number of people employed in the field. In other words, the implementation of productivity-increasing technologies of hard coal extraction is vital in order to maintain any jobs in the Upper Silesian mining sector.

38 From restructuring to sustainable development. The case of Upper Silesia Even after taking into consideration the natural rotation of human resources related to older employees retiring, mining in 2030 will be able to maintain only half of the people currently employed in the field, i.e. approximately 20 thousand permanent jobs out of the 40 thousand current employees who will still be professionally active at that time. WITHOUT LIMITING THE However, avoiding the generation gap and maintaining extraction in DEMAND FOR COAL IN the most efficient mines in the region until the 2040s will require hiring new employees. The net needs of the sector in this respect (approxima- THE ENERGY AND OTHER tely 340 people annually) will probably be several times lower than in ECONOMIC SECTORS, THE the previous years, and approximately three times lower than currently

DECLINE IN STEAM COAL signalled by coal companies. At the same time, due to the last crisis and limited intake of new employees in 2015, despite the previous commit- EXTRACTION IN UPPER SILESIA WILL LEAD TO ments made by coal companies, the number of mining school students fell significantly (to approximately several dozen in the latest classes). A FURTHER INCREASE IN 80 IMPORT OF THIS FUEL The new employment guarantees currently announced by mining com- panies70 can – similarly to the previousLiczba period pracowników of recoverysektora wg wieku – again przy naturalnej wymianie pokoleń increase the interest of young people in mining schools. However, this 60 will probably not be a mass trend. The potentialponad 50 overestimation lat of the demand50 for new employees on the part of mining40-49 latcompanies during the next economic slowdown could have long-term30-39 consequences,lat leading 40 to the final loss of interest in the field byponi peopleżej 30 lat entering the labour tys. osób market30 after another crisis, thereby significantlytrwałe miejsca hampering pracy w górnictwie the replacement of human resources after 2030. This, in turn, will accelerate the loss20 of competitiveness even by the most efficient mines. Thus, the field is facing a twofold challenge: avoiding having an excessive workforce in 10 the next ten to twenty years and shortage of staff in the long-term. In this context,0 the challenge will comprise of both efficient retraining of the employees2017 leaving 2025 the 2030 mining 2040 sector 2050 in the 2020s and 2030s, and

maintaining the interest in the sector on the part of a limited number of R32people in the future.

Figure 30. Number of 80 employees in hard coal mining Number of employees in the sector by age, according to age groups, 70 including generationial change forecast for the years over 50 years old 2018-2050 60 40-49 years old Key assumptions: constant 50 30-39 years old influx of employees limited to the level necessary to avoid under 30 years old 40 a labour shortage by 2050 permanent jobs in mining (approximately 340 people annually in the years 30 2019-2040 and 170 people people of thousands annually in the years 20 2041-2050). 10 Source: WiseEuropa’s own forecasts. 0 2017 2025 2030 2040 2050

From restructuring to sustainable development. The case of Upper Silesia 39 Box 4. WHAT DO CURRENT ASSESSMENTS OF HARD COAL DEPOSITS TELL US ABOUT THE FUTURE MINING OPERATIONS?

A significant element of the debate on the future This is because it will only be possible to extract of mining in the Silesian Voivodeship is the issue a small portion of coal deposits. First of all, of the of hard coal deposits. Despite the gradual decline total volume of coal in a given field (geological in production and the workforce in the Silesian deposits), only some has the proper physical mines, the industry has suggested that there is a parameters (e.g. depth at which it is found) – possibility of maintaining its activity in the long these are recoverable resources. Secondly, run, thanks to the utilisation of coal deposits pre- only a portion of the recoverable resources can be sent in the Upper Silesian Coal Basin. The current used in an economically justified way – these are extraction levels counted in tens of millions of industrial resources. These are additionally tonnes annually are compared with the total coal reduced by the resource losses (approximately deposits in the Basin, estimated at tens of billions 40-45%) in the production process. Only then the of tonnes. A closer look at the classification of the exploitable resources, i.e. those that can in deposits and the changes in their levels over time fact be delivered to the market according to the indicate, however, that even rich deposits do not current technical and economic parameters are guarantee that extraction can be maintained in a counted. given mining region.

Diagram 2. Coal resources and the future mining volume Geological Source: WiseEuropa. resources

Non- Recoverable -recoverable resources resources

Non-industrial Industrial resources resources

Exploitable Losses resources

No Resources differentiation that cease to be Resources that will be in deposit economically attractive before extracted balances extraction

40 From restructuring to sustainable development. The case of Upper Silesia At the same time, individual types of resources problem has occurred in Silesia: despite reversal change over time. Geological studies can provide of the declining trend with regard to recoverable more information60 58 about 57deposits, thereby increa- resources, the level of extraction is falling in real sing recoverable resources. At the same time, terms, and the extractable resources are decrea- 48 however, the50 economic environment46 in the sector sing as successive mines become less competitive changes, affecting the profitability of producing and deposits in the other mines run out. There is 39 coal from a40 given deposit, which in turn affects the also a significant socio-economic factor, which is assessments of the size of its industrial and 35explo- 34the disapproval of mining investments on the part itable resources. For example, an increase in of local communities. Together with increased 30

labour costsmldton when the level of mining productivity prosperity of the inhabitants, development of the is increasing too slowly in underground mines or modern manufacturing and services, and expan- 20 17 its excessive capital intensity16 will translate into sion of surface infrastructure, the costs of poten- escalation of the hard coal production overheads, tial damage due to the mining activity in a given 9 9 10 10 7 causing its decline and limitation of 6 industrial area increase. Therefore, the extraction potential 4 4 4 resources. Within the three last decades, this in densely2 populated2 3 areas1,5 is limited. 0 1989 1992 1997 2002 2007 2012 2017

Zasoby bilansowe Zasoby przemysłowe Zasoby operatywne

Figure 31. Recoverable, industrial, and exploitable R29 resources in the Upper Silesian Coal Basin Source: WiseEuropa based on data from the Polish Geological Institute – National Research Institute, the Ministry of Energy (2018), and Probierz et al. (2007).

60 58 57

48 50 46

39 40 35 34

30 billions of of tonnes billions 20 17 16

9 9 10 10 6 7 4 4 4 2 2 3 1,5 0 1989 1992 1997 2002 2007 2012 2017

Recoverable resources Industrial resources Exploitable resources

From restructuring to sustainable development. The case of Upper Silesia 41

10 180 Zasoby operatywne 9 160 Wydobycie węgla 8 (prawa oś) 140 7 120 6 100 5 mldton The decline in exploitable resources and80 resourceston mln shall remain unused due to purely eco- 4 the decrease in the level of extraction in the Upper60 nomic reasons. Estimates of the future coal extra- Silesian3 Coal Basin are taking place at a very simi- ction in Upper Silesia cannot, therefore, be based lar pace.2 For more than two decades, the estima-40 only on the current assessment of the amounts of ted 1 moment at which minable coal deposits in20 exploitable resources. They also have to take into Upper Silesia will run out has been the 2040s. consideration the factors affecting the current and 0 0 This is not1989 changing 1992 1997 despite 2002 the 2007 clear 2012 decrease 2017 in future competitiveness of the industry, especially coal production, which – as one might think – the dynamics of labour costs in the region, tech- should lead to extension of the period of potential nological capability of increasing the productivity exploitation of particular deposits. This means of extraction and the potential for its market price R30that gradual shutdown of hard coal mining in the going up. region is inevitable, and most of the industrial

10 180 Remaining Exploitable resources Expected final year 9 years of 160 of extraction Coal extraction (right axis) extraction 8 140 1989 55 2044 7 120 1992 68 2060 6 100 1997 44 2041 5 80 2002 43 2045 billions of of tonnes billions

4 of tonnesmillions 60 2007 28 2035 3 2012 32 2044 2 40 2017 28 2045 1 20

0 0 1989 1992 1997 2002 2007 2012 2017 Table 3. Sufficiency of exploitable resources in the Upper Silesian Coal Basin assuming constant extraction from a given year Figure 32. Exploitable hard coal deposits and coal mining in the Upper Silesian Coal Basin Source: WiseEuropa based on the data from the Polish Geological Institute – National Research Source: WiseEuropa based on the data from the Polish Institute, the Ministry of Energy, and Probierz Geological Institute – National Research Institute, the Ministry et al. (2007). of Energy, and Probierz et al. (2007).

42 From restructuring to sustainable development. The case of Upper Silesia © R. Kaźmierczak / Marshal Office of the Silesian Voivodeship

From restructuring to sustainable development. The case of Upper Silesia 43 Policy for development of the region in light of the changes An efficient policy of development of the Silesian Voivodeship means accepting the inevitability of losing economic competitiveness of hard coal mining, and the fact that during the next twenty years most of the AN EFFICIENT POLICY OF existing mines will shut down extraction, and the potential new loca- REGION DEVELOPMENT tions – due to objective, economic conditions – will be able only to a MEANS ACCEPTING THE small degree fill the resulting gap in the supply of the black fuel. On the other hand, it is necessary to understand that the changes in the Sile- PROSPECT OF ALMOST FULL sian mining sector and the worldwide technological trends will affect DISAPPEARANCE OF JOBS IN the energy companies active in the region. They will have to undergo THE MINING SECTOR WITHIN major transition based on replacing the production capacities based on THE NEXT TWO DECADES coal with renewable and gas resources, which, in turn, will mean changes in the way competencies and space are structured due to their demand for labour. On the economic side, the Silesian Voivodeship will, therefore, require that the traditional competitive advantages be replaced with new sources, the expectations of which, in view of the local development policy, are different from the expectations for the mining-energy complex. The change of the paradigm on which the development of Silesia is based requires specifically: ● time for planning adjustment activities and implementing them, ● the possibility of making savings and distributing the resources facilitating the transition of companies and units affected by the changes, ● formulating realistic expectations of stakeholders regarding the scale and pace of reforms. Unfortunately, practice to date has been based on postponing the anno- uncement of closure of mines and reducing the workforce in mining companies, which means keeping employees and other concerned parties in a state of uncertainty that lasts for months. This creates unne- cessary tensions and undermines trust both on the part of miners and local authority institutions. In the case of hard coal mining employees, presentation of realistic medium- and long-term plans for restructuring the sector would allow early preparation for the prospect of changing jobs, and for the people currently only considering choosing mining as a career – a realistic evaluation of their professional prospects. Provi- ding information in advance about the plans for gradual reductions of the number of employees in the mining industry would also enable more effective activities of local authorities and labour market institutions, giving them time to devise support for the people affected by the restructuring programme and collecting the resources necessary for this purpose. The information that the demand for new employees in hard coal mining will be decreasing should be distributed among young people (specifically, information from mining companies is important in this case), and the people looking for work or expanding their qualifications should seek employment in other sectors. Importantly, coal companies can also benefit from the realistic approach to long-term development of the sector. A policy of not leaving changes until the last moment (when there is no longer any choice due to the poor financial

44 From restructuring to sustainable development. The case of Upper Silesia standing of a company) will mean that resources in energy-mining companies can be better allocated, allowing all of the possible restructuring scenarios to be considered. This will avoid hasty decisions being made for example due to the prospect of losing liquidity during the recession. At the same time, more resources will be able to directed towards the real diversification of activities, and therefore maintaining the companies’ development prospects in the long term.

Managing changes in hard coal mining Restructuring the mining sector requires not only a realistic assessment RESTRUCTURING of the prospects for its development, but also a transparent message in THE MINING SECTOR this respect directed at the inhabitants of the Silesian Voivodeship, REQUIRES NOT ONLY A miners, and energy sector employees. Without informing the individual REAL ASSESSMENT OF groups of stakeholders about the probable future of the field, it is hard to count on a peaceful restructuring that at the same time will be bene- THE PROSPECTS FOR ITS ficial for the region. The decline in the mining industry can bealso DEVELOPMENT, BUT ALSO accompanied80 by creation of new jobs connected with low-emission Niskoemisyjne ciepło (mikroinstalacje OZE) A TRANSPARENT MESSAGE investments70 in other sectors, including the energy and construction Termomodernizacja budynków IN THIS RESPECT DIRECTED sectors.60 These sectors can jointly generate a positive impulse for the Dywersyfikacja miksu w elektroenergetyce AT THE INHABITANTS OF Silesian50 labour market at a level corresponding to 20 thousand employees in 2030, and 30 thousandWydobycie w inęgla 2050.- trwałe miejsca This pracy means that this THE SILESIAN VOIVODESHIP, 40 impulse will correspond to the number of jobs in hard coal mining that MINERS, AND ENERGY 30 will become uneconomic by the end of the 2020s. This points to the 20 SECTOR EMPLOYEES consistencyosób tys. Zatrudnienie, between the programmes of thermomodernisation and diversification10 of the country’s energy industry and the support actions for employees0 to move from mining to other sectors. Although the same 2018 2030 2050 2030 2050 actions for the development of renewable energy sources and the Górnictwo - trendy rynkowe Efektywność energetyczna i OZE - improvement of energy efficiency of buildings shouldnowe miejsca not pracy be pozatreated as the only solutions for the challenge of restructuringgórnictwem local nettolabour mar-

kets, they might be helpful in this process. Delaying the technological R33transition of the energy sector in order to maintain demand for coal when there are growing problems with ensuring its supply, therefore, is not an effective way of avoiding the challenges of restructuring the mining sector. Figure 33. The number of employees in hard coal mining and jobs generated outside the 80 mining sector by low-emission Low-emission heating (RES microinstallations) investments in the energy 70 sector and buildings in the Building retrofits Silesian Voivodeship, 60 Diversification of energy mix in electricity production 2018-2050 50 Coal extraction – permanent jobs Key assumptions: 40 implementation of a country- wide programme of 30 thermomodernisation and 20 heating source replacement, 10 as well as increase of the share of people thousands Employment, of renewable energy sources 0 in the electricity generation 2018 2030 2050 2030 2050 mix to 70% (see Bukowski et al. 2017, Ecke et al. 2017). Mining – market trends Energy efficiency and renewable energy – new jobs outside the Source: WiseEuropa’s own mining sector, net value forecasts.

From restructuring to sustainable development. The case of Upper Silesia 45 The demographic problems of Upper Silesia and the probable problems with the influx of new employees to the sector in the 2030s together make the full utilisation of the potential of the best miners a necessity for mining companies. For this to happen, the main requirement is to change the approach to employment in the mining sector: from “whole professional career in a mine” to “mining as one of several career stages.” It would be advisable to also change the social security and collec- tive agreements regulations, as they currently hamper management of TODAY, OBTAINING the sector restructuring. Specifically, the current policies regard eligibi- QUALIFICATIONS IN THE lity for a miner’s pension are of zero-one nature: one must have 20-25 MINING SECTOR IS OF years’ service in mining to become eligible for early retirement and a A ZERO-ONE NATURE, pension determined on the basis of favourable conversion factors. This WHICH EXACERBATES THE form of regulations creates a strong stimulus for binding one’s whole CONFLICTS SURROUNDING professional career with mining, and, at the same time, it increases the THE NECESSARY costs of restructuring: the miners that leave the profession lose not only relatively high salaries, but also the prospect of additional retirement RESTRUCTURING benefits. This exacerbates the conflicts surrounding the necessary remedies in periods of recession, which, in turn, are alleviated by additional social welfare measures, such as leave for miners. Introducing solutions allowing the miners currently in work to gradually become eligible for additional pension benefits as their length of service in a mine increases would improve the management of restruc-

Time Resources Expectations Diagram 3. The conditions for effective management of change in the mining sector Obtaining Looking for a new support for Informed choice Source: WiseEuropa. job, changing changing qualifi- of career path qualifications cations, founding

Employees a company

Preparing support Funding support Avoiding placing programmes programmes for employees for persons who persons who lose in declining lose their jobs their jobs industries institutions Labour market

Preparing a Investments attract- Realistic comprehensive ing new industries assessment of response to the and improving long-term deve Local local economic the quality of life lopment potential

authorities shock of inhabitants

Avoiding excessive

Selection investments in Using own of optimum declining areas of resources restructuring business activity, Coal in new markets option directing resources companies for diversification

46 From restructuring to sustainable development. The case of Upper Silesia turing of mining companies, making it easier for the miners to shape their own career paths, so that working in the mining industry would become one of several stages of their activity in the labour market. It would also be desirable to include miners in the general pension system: mines should pay higher contributions into miners’ pension accounts, and they would, in turn, become entitled to early retirement in a linear way, as their length of service increases. In the case of new employees or employees with a short period of service, a better option would be to deduct an additional contribution (as part of Employee Capital Programmes or Employee Pension Programmes) complemen- ting the pensions paid out according to general principles. This would lead to a permanent change of the nature of miners’ work towards a system more adjusted to the challenges faced by the region. Employ- ment in the sector could be shorter or longer but still just a stage of a career – work performed for above-average gross remuneration, in a manner similar to other professions with hard working conditions.

Fuel-energy system The changes in the mining sector must be accompanied by modernisation of the fuel and energy system, including not only electricity supply, but also investments in low-emission technologies in buildings, transport and manufacturing. These changes should be consistent with the technological trends and long-term emission reduction targets in Europe, and with the needs for radical improvement of air quality in the region. At this point it should be emphasised that maintaining conventional power technologies in the energy sector as the guarantee of local CHANGES IN THE MINING demand for coal, and indirectly also for the companies providing tech- SECTOR MUST BE nical solutions for mining, is not an attractive development alternative ACCOMPANIED BY THE – the supply of coal in the Silesian Voivodeship will fall due to economic MODERNISATION OF THE and geological limitations, and coal imports will increase, mostly from FUEL AND ENERGY SYSTEM: Russia. In order to ensure permanent prosperity of the inhabitants of NOT ONLY ELECTRICITY the region, it would be much more beneficial to create local demand for the technologies that have excellent prospects in the global markets. SUPPLY, BUT ALSO INVEST MENTS IN BUILDINGS, The investments translating into qualitative changes in managing MANUFACTURING AND energy and radically reducing pollution emissions (renovation of a large number of buildings, development of integrated railway and intermo- THE TRANSPORT SECTOR dal transport systems, technological transition in the energy sector, etc.) usually involve a high level of capital intensity and organisational complexity. However, their realisation – among other things thanks to significant reduction of demand for fuels – allows to reduce the operating costs connected with meeting energy, transportation, and con- sumption demand of the region’s inhabitants. At the same time it ensures a rapid improvement of the environmental quality, and opening international development prospects for the local vendors providing low-emission solutions. In view of the global trend of significant reductions of emissions in the energy sector, reflected for instance in the Paris Agreement, investments in conventional technologies for producing and using energy are associated with a serious risk of turning into stranded assets. This will result in premature withdrawal from use and incurring double the multibillion investment costs: firstly for coal

From restructuring to sustainable development. The case of Upper Silesia 47 units or emission-intensive transport systems with a short-term functioning prospects, and secondly for low-emission solutions that will have to replace them within just a few years or between ten and twenty years, when operational profitability of the conventional solutions turns permanently negative. The change currently taking place in the European and global capital markets provides an additional argument for directing the attention of energy companies and other investors active in the Silesian Voivodeship to low-emission technologies. Following the international financial institutions (pension funds, investment funds, and banks) withdrawing from emission-intensive investments, in Europe, Asia and North Ame- rica, measures are being taken to mobilise private funds for alternative solutions, guaranteeing the investors achieving emission reduction consistent with the goals of the Paris Agreement of 2015, and, at the same time, manufacturers of consumer goods take care to minimise the so-called carbon footprint in their products, reducing the use of energy from emission-generating sources. An example of such measures is the initiative “Climate Action 100+,” which has now been joined by over 250 institutions in the financial sector, managing assets worth USD 28 trillion. As part of the initiative, investors put pressure on a group of companies – the biggest sources of greenhouse gas emissions – to take measures to reduce emissions, pursuant to the Paris Agreement. In the case of the European Union, the action plan for sustainable financing announced in 2018 is aimed among other things at clear sepa- ration of investments contributing to significant reduction of green- GLOBAL TRENDS SUGGEST house gas emissions from the ones that are not consistent with the THAT A QUICK SHIFT OF plans for low- or zero-emission modernisation of the European energy PRIVATE INVESTORS FROM system. Similar initiatives have been announced by financial market regulators in China and Japan, while in the US they are performed in FUNDING COAL PROJECTS the form of capital market self-regulation. With this global trend in TO ZERO-EMISSION mind, a quick shift of private investors from funding coal projects to INVESTMENTS SHOULD BE zero-emission investments should be expected (such actions have alre- EXPECTED ady been taken for example by Allianz, Aviva and the ING Group). This will lead to gradual deterioration of the conditions of funding conventional technologies caused by the necessity of one funding party to bear additional regulatory and operational risks. Where the focus is on energy transition, in the long term the Silesian Voivodeship will benefit not only from lowering the costs of meeting energy needs, but also from easier access to private funds for the modernisation projects performed in the region.

48 From restructuring to sustainable development. The case of Upper Silesia Maintaining the current direction of fuel and energy system Qualitative systemic transition consistent with modernisation Sector development needs

Slow development of distributed energy sources, main- Combining the development of intelligent networks with Energy taining conventional coal technologies in electricity and dispersed energy technologies, including renewable energy heat generation. sources, managing demand and storing energy.

Shallow thermal modernisation according to the stan- Deep thermomodernisation combined with the application Buildings dards dominating the market, gradual connection of of zero-emission heat sources or connecting to low-emission buildings to the district heating networks. heating systems.

Gradual replacement of the current public transport Shift of mobility towards public transport – zero-emission fleet with low- and zero-emission vehicles, gradual Transport buses and rail vehicles, limiting the use of conventional expansion of the power supply infrastructure for electric emission-intensive passenger cars in cities. vehicles and other low-emission drives

Pilot implementation of the zero-emission production tech- Improvement of energy efficiency of the currently used Heavy industry nologies (including electrification, using hydrogen, synthetic industrial processes. fuels, CCS/CCU installations).

Integrated approach used only in selected projects, Managing energy at the level of housing estates and districts, Integrated limited to the use of various technologies in a given bu- combining individual energy systems (electricity, district hea- projects ilding or creating single connections between systems. ting, gas, industrial energy, and waste heat).

Table 4. Two modernisation pathways for the regional fuel and energy system

Source: WiseEuropa.

From restructuring to sustainable development. The case of Upper Silesia 49 Box 5. PENSION PRINCIPLES FOR THE MINING INDUSTRY IN COMPARISON TO OTHER SECTORS OF THE ECONOMY

People working in the mining industry are one sion factors extending the length of service applied of the few professional groups in Poland outside when calculating miners’ pensions. They are, the general pension system. Miners’ pensions are respectively, 1.5 for every year of mining work connected to additional, industry specific rights, performed underground, and 1.8 for every year such as the possibility of early retirement and the working in a rescue team or performing activities application of a favourable service period conver- connected to hollowing workings and for opera- sion factor based on the old system of calculating tion supervision employees and mine operation pensions, from before the reform of 1999. management, provided this work was performed Early retirement is an option for employees for at least 5 years. When specifying the amounts who have reached the age of 55 and have worked of miners’ pensions, the total work period that can for a minimum of 20 years in the case of women be calculated using the conversion factors cannot and 25 years in the case of men, including at least exceed 40 years. 10 years of mining work. In the case of work in Miners can also make use of miners’ leave, mining for 15 years, it is possible to retire at the which means that pension rights can be obtained age of 50. However, if a person has worked in in cases of early redundancy (for example when a mining underground full-time for 25 years, they mine is closed down). The maximum duration of can retire regardless of their age. such leave is 4 years, and during this leave the Miners’ pensions are calculated on the basis of employee receives social benefit funded by the length of service and salary levels in a given period state budget, equal to 75% of monthly remunera- of career – the longer the period of service and the tion calculated in the same way as remuneration higher the salaries, the higher the pension. This for holiday leave. method was also used in the general system, but it Mining is not the only line of business with did not strike a balance between the deducted specific working conditions. However, in the case contributions and the received benefits. Since the of other sectors, bridging pensions were introdu- pension reform of 1999 (from which the miners ced (excluding new employees, who enter the were excluded after their protests in 2005), the general pension system). The right to early retire- amounts of pension benefits have depended on ment is granted to people of the appropriate age the sum of the deducted contributions and the (55 for women and 60 for men) who have 15 years subsequent life expectancy – which (in approxi- of service, as well as a specific contribution pay- mation) allows a balance to be found between ment period. These solutions apply for instance to pension system remittances and withdrawals. In metallurgy, railway transport, emergency medical the case of people employed in mining, there is no services, or teachers. similar mechanism, but there are special conver-

50 From restructuring to sustainable development. The case of Upper Silesia 3.2. Diversification of industry and services

The importance of the mining sector and large-scale energy generation as the source of growth and jobs is inevitably decreasing. In this situation, reaching the level of GDP per capita and wages comparable with the industrial-service centres of Western Europe requires meeting two THE IMPORTANCE OF THE conditions. The first is fast increase of productivity at a rate of MINING SECTOR AND LARGE- at least 1.5-2% above the EU average. The second is significant SCALE ENERGY GENERATION diversification of the foundations for the development of the AS THE SOURCE OF GROWTH local economy. AND JOBS IS INEVITABLY Maintaining the dynamics of economic development at the level descri- DECREASING bed above would guarantee the prosperity of the inhabitants of the Silesian Voivodeship, i.e. reaching the EU average in approximately twenty to thirty years. However, this would have to be a broad process, not only concerning a few economic subsectors. Due to the specialisa- tion of the region, a high level of growth of the manufacturing would be the priority. At the same time, the voivodeship needs both a significant increase (approximately 3 times by 2050) of the industrial value added, and a big increase in its diversity. Currently, the added value per capita generated in the Silesian manufacturing (approximately EUR 3,000 per inhabitant according to market rates) is 70% of the EU average, and 40% of its most industrialised parts. In services, the gap is bigger, which means that equalising the quality of life in 2050 requires the Silesian Voivodeship to triple the current industrialisation level in this time- frame, becoming one of the most industrially developed regions on the continent. This will not be possible without attracting new branches of the manufacturing, and the gradual increase of complexity of the types of business activities dominating in the region. This requires the local authorities to work (together with the central government and its agencies) to attract to the region investors active in sectors that were hitherto under-represented, in particular in the machinery, electrotechnical and electronic, chemical, or pharmaceutical industries, at the same time developing the ones, which – like manufacturing vehicles and parts for them – are already well-developed in the region. In the second case, however, it is important to follow the technological changes taking place in the industry, as a result of which combustion engines in passenger cars will probably be replaced by hybrid, electric or hydrogen drives. If it does not re-profile the local production base in the automotive industry in time, the voivodeship may become one of the regions that will lose in the global transition of transportation. At the same time, public policy should support companies in diversification of their activities and entering new markets, including global ones, without wasting resources on artifi- cially maintaining the demand for solutions gradually losing their market position, such as conventional energy technologies. To do this, it is necessary to build foundations for long-term competitive advantages of the voivodeship, i.e. above all strengthen the research facilities supporting business, including in particular services

From restructuring to sustainable development. The case of Upper Silesia 51

© Tomasz Gębuś / UMWS with the highest added value: R&D, engineering, architectural, consulting and ICT. The policy of attracting investments to the region should, IT IS NECESSARY TO therefore, strongly promote development of activities of this type, and BUILD FOUNDATIONS FOR the main cities of the Silesian metropolitan area should create condi- LONG-TERM COMPETITIVE tions for development of this type of indigenous companies. ADVANTAGES OF THE This means increasing the academic status of regional higher education VOIVODESHIP, I.E. ABOVE institutions and research institutes, as well as reprofiling some of them ALL STRENGTHEN THE towards the issues not connected directly with the mining sector. Addi- RESEARCH FACILITIES tionally, vocational education centres, the aim of which should be looking for opportunities to use the competences of employees from sec- SUPPORTING BUSINESS, tors undergoing restructuring in new areas of business activity, must be INCLUDING IN PARTICULAR strengthened. This way, Silesian Voivodeship has a chance to benefit SERVICES WITH THE from the creation of modern industrial commons, of industrial-service HIGHEST ADDED VALUE: type, i.e. networks of close connections between the centres generating R&D, ENGINEERING, human, social, and physical capital. ARCHITECTURAL, CONSULTING AND ICT

52 From restructuring to sustainable development. The case of Upper Silesia © R. Kaźmierczak / Marshal Office of the Silesian Voivodeship Box 6. CAN “CLEAN COAL TECHNOLOGIES” BE A KEY FOR THE MODERNISATION OF THE SILESIAN ECONOMY?

Government and regional strategic documents on a large scale (without using CCS installations) see the chance for hard coal in the so-called “clean with maintaining climate neutrality throughout coal” technologies, which are supposed to allow a the whole economy is, therefore, not possible. significant share of the coal energy industry to be CCS technologies are currently at an early stage maintained in the Polish energy system, despite of development, and are characterised by high the growing requirements in the forms of climate costs, lack of social acceptance, and unidentified policy and environmental standards. In this con- technical risks, which can call into question their text, it is important to differentiate between the practical applicability in the geological conditions conventional technologies allowing only partial of Silesia. An impassable barrier for the CCS tech- reduction of CO2 emissions thanks to the impro- nologies, however, might be economic factors vement of fuel combustion efficiency, thus not alone. Power plants with CCS systems will probably 1200 solving the problem of emission costs in the have to operate in a baseload in order to achieve medium1000 and long term, and CCS (Carbon Capture satisfactory cost-effectiveness. Taking into consi- and Storage) technologies, which are the only deration the decrease in the costs of renewable technological800 solutions ensuring significant energy sources, it is unlikely, however, that main- reduction of emissions from the use of coal in the taining this type of power plants would be an 600 energy sector and industry. Both the above-gro- optimal system solution. Evolution of the energy undMWh / kgCO2 and underground gasification of hard coal system is going rather in the direction of maxi- 400 does not lead to eliminating CO2 emissions. mum utilisation of a large volume of cheap energy Instead,200 it increases the costs of electricity or from renewable energy sources, at the same time synthetic fuels made of coal with the price of EU balancing it with conventional power plants based ETS allowances0 at EUR 15-20/t of CO2 (see on gas (initially) and energy storage (in the Węgiel brunatny stary Węgiel brunatny nowy Węgiel kamienny stary Węgiel kamienny nowy Węgiel kamienny nowy - Gaz Ściążko et al. 2006). Reconciling coal gasification future), or power-to-gaspodziemne zgazowanie solutions. This does not

Emisyjność technologii Średnia w Polsce - obecnie 90-procentowa redukcja emisji Węgiel + CCS

R34 Figure 34. Technologies of producing electricity from fossil fuels and the long-term climate goals

Source: WiseEuropa based on the data from the National Centre for Emissions Management, Hyder et al. (2014), and own analyses. 1200

1000

800

600

kgCO2/MWh 400

200

0 Old lignite New lignite Old hard coal New hard coal New hard coal – Gas underground gasification

Emission generation of technologies Average in Poland – currently 90% emission reduction Coal + CCS

54 From restructuring to sustainable development. The case of Upper Silesia mean that the CCS-type solutions will not find A potential decision regarding the development of their niche in the system, however, this may gre- nuclear energy in Poland would also decrease the atly be dependent either on the local geological chances for implementation of coal-based solu- conditions and acceptance by local communities, tions in combination with CCS, as its place in the or on popularisation of the technologies that are system would be at the expense of both coal and currently in the early stage of development. renewable energy sources.

Therefore, developing the “clean coal” over 20-30 years, the technological reconstru- technologies should not be treated as the ction of the Polish energy industry towards sour- obvious way for maintaining the coal ces not requiring import of fossil fuels becomes power plants in the Polish energy system a highly justified alternative not only for the whole until 2050. Due to the direction of both the glo- country, but also for Silesia. It enables a gradual bal trends and the European energy and climate reconstruction of the local economic model at policy, and also the competition from more a pace adjusted, on one hand, to the restructuring socially acceptable alternatives, putting faith in of the industrial base of the region towards non- the relatively high-cost and risky technologies -energy-intensive sectors, and, on the other hand, might not be the right path to take. At the same towards the shaping of modern economy based on time, with the reduction of coal extraction spread high quality services in the area.

From restructuring to sustainable development. The case of Upper Silesia 55 Box 7. LESSONS FROM TRANSITIONS OF THE TRADITIONAL INDUSTRIAL REGIONS IN EUROPE AND NORTH AMERICA

Examples from abroad indicate that an efficient areas and adjusting them to the requirements of transition of the traditional heavy industry regions modern production systems at the same time. is a long-term process made up of many stages. This required developing and implementing all- The increasing foreign competition, the growing -embracing development strategies combining intensity of production of alternative raw mate- the elements of development policy, labour mar- rials, more efficient energy-saving technologies, ket policy, and social policy. Responsible trans- and the decreasing costs of generating energy ition usually required agreements with trade from renewable energy sources have forced the unions based on the principle of giving people developed economies to move from heavy indu- affected by restructuring of declining industries stry to technology-related sectors. opportunities to gain the qualifications sought Successful restructuring required cooperation after in the market. This especially applies to peo- of the central and local authorities and involve- ple working in the so-called supporting services, ment of the private sector. A significant element i.e. mostly long-term administration employees of of the transition was consistent sector diversifica- mining companies. tion conducted by revitalising post-industrial

Diagram 4. The best practices in the transitions of traditional industrial regions

Source: WiseEuropa.

• Collaboration between government agencies (for • Decentralisation of restructuring activities al- instance job agencies, economic growth agencies, lowing realisation of investment projects based departments) in the area of training programmes

on public-private partnerships and grassroots for employees and developing small and medium- initiatives sized enterprises, enabling the implementation of comprehensive programmes supporting the • Involvement of trade unions at every stage of initiative (USA) Federal POWER social-economic restructuring in mining regions creating the restructuring strategy for the region The Ruhr (Germany) • Launching a dedicated fund supporting restructuring of the region (e.g. RAG-Stiftung)

• Development of new local specialisations (health services, advanced services, patents) based on the existing potential of higher education

(USA) institutions and research centres, building

• Emphasis on supporting innovative companies Pittsburgh a knowledge society creating permanent, high-quality jobs, instead of mass protection of jobs by supporting bankrupt

companies • Supplementing the traditional counter-unemployment programmes with a comprehensive • Comprehensive approach to revitalising post- Limburg approach to other social problems (i.e. psycho- industrial areas, individual flagship projects em- logical support, investments in human capital) bedded in broader systemic activities (the Netherlands) • Long-term programme aimed at creating a new,

Bilbao • Privatisation of the revitalised areas ensuring (Spain) diversified economic base for the region financing for further restructuring initiatives

56 From restructuring to sustainable development. The case of Upper Silesia 3.3. Cross-cutting actions Revitalisation of urban space Increasing the scale and comprehensiveness of the programmes focused on revitalising areas of degradation that are implemented in the Silesian Voivodeship is intended to provide systemic support for the regional economic development by raising the quality of life in the region and strengthening social cohesion in the area. It is difficult to THE OPTIMUM MODEL expect the region’s potential to be put to full use without improvement OF REVITALISATION IN in these areas: • investment: rapid increase of added value per employee, SILESIAN CITIES SHOULD • ddemographics: stopping population ageing processes and the INCLUDE DESIGNING URBAN decline of the number of region inhabitants, SPACE IN A WAY WHICH • innovation: creation of a large number of R&D centres with Euro- INCREASES THE ENERGY pean reach in the region. EFFICIENCY OF THE WHOLE In recent years, a regulatory framework (act on revitalisation of 2015) CITY: CREATING A DENSE, has been developed, enabling detailed planning of revitalisation measu- DIVERSE URBAN FABRIC res and including local communities in the process. They encourage the CONNECTED BY EFFICIENT voivodeship authorities to conduct a development-oriented policy in PUBLIC TRANSPORT combination with meeting the needs and receiving opinions of the inhabitants of Upper Silesia, however, they do not emphasise the key dimension of revitalisation, i.e. the improvement of energy efficiency and reduction of pollution emissions in renovated buildings. Individual local authorities must be aware, however, of the value of taking measures that go beyond simple building renovation or even replacement of the local energy infrastructure. The optimum model of revitalisation in Silesian cities should include designing urban space in a way which

Diagram 5. The elements needed for a comprehensive revitalisation of Silesian cities Integrated municipal plans Thermal modernisation of buildings and replacing heating sources Ensuring public participation Source: WiseEuropa. Dense, diverse urban fabric Counteracting social exclusion integrated with public transport

Reducing Existing legal pollution and framework for increasing energy revitalisation efficiency

Post-industrial Accounting areas for long-term trend

Adapting urban Availability for new industrial infrastructure to climate change and service investments Taking demographic change into Ensuring cohesion with other consideration: social infrastructure urban areas and proper scale of investment

From restructuring to sustainable development. The case of Upper Silesia 57 increases the energy efficiency of the whole city: creating a dense, diverse urban fabric connected by efficient public transport4.1 Comprehensive revitalisation must also include supralocal challenges, such as the necessity of adapting urban infrastructure to the requirements of climate policy necessity of adapting urban infrastructure to COMPREHENSIVE the requirements of climate policy (by means of developing for instance REVITALISATION MUST railway and bicycle transport, intermodality, and integration of various ALSO INCLUDE SUPRALOCAL means of transportation), inclusion of demographic changes, or the CHALLENGES, SUCH AS THE continuing fast progress of digitalisation, requiring not only investments in fibre optic networks, but also implementation of digital tech- NECESSITY OF ADAPTING nologies in all the municipal and transportation subsystems. In the case URBAN INFRASTRUCTURE of the Silesian Voivodeship, the inclusion of post-industrial areas into TO THE REQUIREMENTS OF the urban fabric will be very important. The business centres built there CLIMATE POLICY – just as the revitalised housing districts – must take into consideration the capabilities of the energy and transportation infrastructure of the city without generating adverse external effects: air pollution, excessive noise, or traffic congestion. These issues should be reflected in municipal revitalisation programmes, especially in the case of mining municipalities. Therefore, it is necessary to increase awareness and popularise the knowledge regarding best practices in this respect among local government employees using specially designed training programmes directed at local authorities, and exchanging experiences with the representatives of local authorities from other European regions dealing with the problem of revitalising post-mining areas, for instance as part of the European platform for coal regions. It is also worth combining revitalisation activities with projects aimed at implementing systemic innovations realised in the EU programmes (Horizon 2020, Interreg Central Europe, Climate-KIC). The region currently has many projects and initiatives in this respect, and is trying to obtain subsidies for this purpose as part of the initiatives men- tioned above. However, the problem seems to be supporting revitalisation processes at national level, taking into consideration the specificity of the Silesian Voivodeship, i.e. enabling development of uninhabited post-industrial areas with significant environmental degradation as well as post-railway areas. These areas should have the possibility of being included in the revitalisation area, provided that they are transformed in accordance with social or economic goals of revitalisation programme, and the areas should not be included in the 20% limitation of the muni- cipality area, which by law is the maximum revitalisation area. Wort- hwhile support for the region would also be the possibility of granting additional preferences or guarantees (apart from the existing support instruments in Special Economic Zone) for entrepreneurs investing in post-industrial areas, requiring increased investments or generating higher investment risk (mining-related damage). Currently, investors do not get sufficient incentives to incur additional costs and organisational efforts of developing projects in areas of degradation.

4 One of the projects dedicated to the topic of energy-efficient and resource-based revita- lization of Polish cities is the REVIPOWER project (https://efficient-city.org/).

58 From restructuring to sustainable development. The case of Upper Silesia Public transport The quality of life in the Silesian metropolitan area also depends on the way its inhabitants can meet their transportation needs. Despite a very high level of urbanisation, the region has average – in comparison to the rest of the country – intensity of public transport, falling clearly behind not only the Warsaw metropolitan area – another region in Poland with a large, multi-million population and high population density – but also Małopolskie Voivodeship or for instance the Tri-City. Silesian200 public transport is dominated by bus transport, with visible300 underdevelopment of railway transport: the number of seats in trams 250 per150 voivodeship inhabitant is several times lower for example than in the Małopolskie Voivodeship, Wielkopolskie Voivodeship, the Łódzkie200 Voivodeship, or Mazowieckie Voivodeship. Only in Tychy is public 100 150 transport high on the list of priorities of local authorities – in most of the other cities that are part of Silesian agglomeration, the transporta100- 50 tion expenses of the local authorities are clearly lower than the amounts50 reported in other parts of the country. This situation affects first of all 0 0 the accessibility of individual parts of the voivodeship for its inhabi- skie skie ą ą l l ódzkie

tants, and therefore theś attractiveness of living and conducting business Ś Ł opolskie Opolskie ł Lubuskie Lubelskie Podlaskie tokrzyskie Pomorskie ę

activities inMa the key centres included in the Silesian metropolitan area. Dolno Mazowieckie wi Podkarpackie Wielkopolskie Ś

Secondly, it affects the underdevelopment of publicń sko-mazurskie transport, espe- Zachodniopomorskie cially railway transport, affecting the qualityKujawsko-pomorskie of air in the region and Warmi adding to the industrial and municipal pollution. Raising the invest- Roczna liczba przewozów pasażerów komunikacją miejską w przeliczeniu na mieszkańca ment attractiveness of the regions will, therefore, require solving trans- Roczna liczba przewozów pasażerów komunikacją miejską w przeliczeniu na mieszkańca - portationtylko problemsmieszkańcy miast together (prawa oś) with the problem of revitalising urban fabric and recultivation of post-mining and post-industrial areas. R35

Figure 35. Public trasnport 200 300 passengers in Polish voivodeships in 2017 per 250 capita 150 200 Source: WiseEuropa based on the data from Central 100 150 Statistical Office. 100 50 50

0 0 skie ą l ódzkie ś Ł opolskie Opolskie ł Lubuskie Lubelskie Podlaskie tokrzyskie Pomorskie ę Ma Dolno Mazowieckie wi Podkarpackie skie (Silesian) Wielkopolskie Ś ą l ń sko-Mazurskie Ś Zachodniopomorskie Kujawsko-Pomorskie Warmi

Annual number of journeys with public transport per inhabitant Annual number of journeys with public transport per inhabitant – only city inhabitants (right axis)

From restructuring to sustainable development. The case of Upper Silesia 59 © R. Kaźmierczak / Marshal Office of the Silesian Voivodeship THE SHARE OF EXPENSES FOR PUBLIC TRANSPORT IN UPPER SILESIA IS MUCH LOWER THAN IN THE LARGEST POLISH CITIES

First of all, this means a need to increase public spending on public transport in the newly created Metropolitan Association of Upper Sile- sia and Dąbrowa Basin and in the other cities of the region – currently, both the scale of expenditure for this purpose and the share of expendi- 20% Udział wydatków na transport zbiorowy w wydatkach 2000 ture in city budgets inmiasta the ogó Silesianłem Voivodeship is significantly below 18% the16% levels of the largestWydatki Polish na transport cities zbiorowy. Emphasis na mieszka shouldńca (prawa be oś put) on: provi- 1500 ń ca ding14% more bicycle pathways and increasing accessibility of this means of12% transportation to the inhabitants, development of railway transport infrastructure,10% modernising the fleet (including buses) with1000 energy- 8%

-saving and electric vehicles, greater co-funding of the costs of publicmieszka na PLN 6% transport resulting in increased availability (frequency) of runs, 500and the 4% level of coverage of the urban area, so that the relative attractiveness of 2% public transport increases significantly in comparison to private trans- 0% 0 ź a ń ł

portation. Also, coordinationaw of the development of the public transport ł ska ód ą Ł l Tychy Bytom Zabrze Gliwice Pozna network within the metropolitanKraków area (between cities) and making it Wroc bie-Zdrój Katowice stochowa Jaworzno ę Warszawa Sosnowiec ę Ruda Ś

consistent with railway transport runBielsko-Bia by Silesian Railways has to be Cz much better than today. This concerns in particular the needJastrz for a more polycentric network of connections, not only converging in Katowice, but also connecting other urban centres. The goal should be to reduce passenger car traffic, also in the long term, when combustion engine R36vehicles will be replaced by electric ones, and, at the same time, to improve transport availability in individual parts of the Silesian metropolitan area in a way enabling greater efficiency of the local labour markets, reducing workforce shortages and decreasing the significant differences in the unemployment rate between neighbouring areas.

20% 2000 Figure 36. Public transport 18% Ratio of expenditures on public transport to total municipal spending in selected cities in budget expenditures 16% the Silesian Voivodeship and Expenditures on public transport per inhabitant 1500 in the largest cities of Poland 14% according to budget plans for 12% 2018 10% 1000 8% Source: WiseEuropa based on budget resolutions. 6% 500 inhabitant per PLN 4% 2% 0% 0 ź a ń ł aw ł ska ód ą Ł l Tychy Bytom Zabrze Gliwice Pozna Kraków Wroc bie-Zdrój Katowice stochowa Jaworzno ę Warszawa Sosnowiec ę Ruda Ś Bielsko-Bia Cz Jastrz

60 From restructuring to sustainable development. The case of Upper Silesia

3.4. Financing the modernisation

The need for infrastructure development and for strengthening the economic base concerns every Polish region. A specific feature of the Silesian Voivodeship is the significance of the low-emission modernisation model for the future development of the local economy. The success of the Silesian Voivodeship is closely connected to the prospects for improving the quality of life, and especially solving the problems of decapitalised urban and post-industrial fabric, a high level of air pollution, and low transport availability and quality of public services in the region. At the same time, the region must find the answer to the deteriorating position of the traditional branches of the mining sector and heavy industry, identifying new competitive advantages and attracting highly productive industrial and service investments. The investment needs related to the systemic transition of the Silesian PUBLIC FUNDS WILL NOT BE Voivodeship concern most of all revitalisation of post-mining areas, ENOUGH TO COVER modernisation of municipal infrastructure, improvement of the air quality, transition of the local energy system, and also diversification of THE MODERNISATION NEEDS economic activities taking into account the necessity of restructuring OF THE REGION declining industries and development of human capital adapted to the new type of economy. Mobilisation of the means for these goals shall be supported by the initiatives that take into consideration the recent evolution of financial markets. Effective mobilisation of funds adequate to the scale of modernisation challenges in the region requires combining various financial tools at regional, country and EU level, including the use of private funds and encouraging the private sector to get involved in projects of a more long-term nature . The focus on public funds, often Diagram 6. Areas of public dominant in the Polish development policy, including the financing intervention for funding modernisation of the Silesian from EU structural funds, is not enough to cover the modernisation Voivodeship needs of the region.

Source: WiseEuropa.

Sources for funding Upper Silesia’s modernisation

PRIVATE FUNDS DOMESTIC PUBLIC FUNDS EU FUNDS

National and Country-wide Regulations Regulations Voivodeship Thermal programmes discouraging Funds for Low-emission Regional encouraging Modernisation supporting from Environmental Transport Operational investments in and Refur smart, maintaining Protection Fund Programme modernisation bishment Fund low-emission status quo and Water Management development

Consistent Additional funds – strengthening revenues from sale New, dedicated fund of regulatory stimuli of emission allowances (EU for coal regions for building ETS) low-emission economy

From restructuring to sustainable development. The case of Upper Silesia 61 In previous years, the possibility of public support for an investment in low-emission regional development, for instance in the form of regulatory tools, domestic environmental funds and EU funds, was gradually developed. However, the existing solutions are still insufficient for the scale of adjustments awaiting the region. The key challenge is not only the improvement of the existing tools, but also directing additional public funds to the Silesian Voivo- deship, to where they are needed the most. At country level this means mostly the necessity of making decisions concerning: 1) implementation of regulations accepting the necessity of major reduction of greenhouse gas emissions and air pollution in such sectors as electricity and heat generation, buildings and transport, thus supporting the fast popularisation of low-emis- MODERNISING THE REGION sion energy sources in the regional energy balance, increasing energy efficiency and restructuring the fuel mix in buildings and WILL REQUIRE MOBILISING industrial processes, as well as balancing the local transport system BOTH PRIVATE AND PUBLIC in the direction of low emissions, which will translate into signifi- FUNDING cant improvement of the quality of air in the region; 2) designating country-wide public funds generated from sale of allowances in the EU ETS system to co funding of low-emission investments in the region, specifically concerning revitalisation and major thermal modernisation of the existing housing stockk, recultivation of post-mining and post-industrial areas, and development of low-emission heating and zero-emission transportation (railway transport, gradual electrification of road transport). The country-wide framework for financing low-emission investments in the key sectors should provide funds for the activities implemented at a local level – as with the EU operational programmes for the whole country. The projects realised in this way provide support for creating innovations and absorbing modern technologies by industry, accumu- lation of human capital among the people active in the labour market, and development of environmentally friendly infrastructure. Implementation of activities at a country level is the necessary condition for the success of modernisation of the Silesian Voivodeship, however, it is not a sufficient condition for modernisation to proceed in a manner that takes into consideration the specific needs of the region THE DEVELOPMENT and expectations of its inhabitants, as well as the companies conducting OF COAL REGIONS SHOULD activities in the area. Due to the concentration of hard coal mining in the voivodeship and its main urban centres dealing with the negative BE SUPPORTED environmental and infrastructural effects of traditional industry fun- BY A DEDICATED POOL ctioning in Upper Silesia, it would be advisable to support the OF EU FUNDS development processes with EU funds dedicated to coal regions in the next European Multiannual Financial Frame- work after 2020.

62 From restructuring to sustainable development. The case of Upper Silesia With the pool of funds directed to European mining regions, distributed proportionally to the number of employees in the mining sectors, these regions – including the Silesian Voivodeship – would get better access to financing of their own modernisation initiatives, and the European Union would improve the visibility of the provided support, increasing acceptance for the changes brought by the climate and energy policy. At the same time, if such a tool were implemented in the whole of the EU it would facilitate information flow regarding best practices in utilising funds between European regions. The first steps in this direction have already been made by the European Commission by creating a Coal Regions in Transition Platform. Currently, this pilot project includes regions in Poland (Silesian Voivodeship), Slovakia (Trencin), and Greece (western Macedonia), however, its goal is to support the dialogue and popularise the expertise on just transition between all European mining and post-mining regions. Support for mining centres should also allow flexible spending of the funds based on the needs identified at a local level, including modernisation investments going beyond the energy sector. The challenges SUPPORT FOR MINING faced by traditional industrial centres in Europe are systemic in nature CENTRES SHOULD ALLOW (diversification of the economy, improvement of the quality of life), and every one of them has a different initial position. In the case of the Sile- FLEXIBLE SPENDING OF sian Voivodeship, the area requiring additional modernisation effort is THE FUNDS BASED ON THE revitalisation of problematic post-industrial areas, taking into conside- NEEDS IDENTIFED ration major changes not only in energy infrastructure, but also in other AT A LOCAL LEVEL municipal and network infrastructure (including digital networks). Investments in these spheres will not only improve the quality of life in the region but also ensure proper conditions for the development of modern industry and services in the area. Comprehensive revitalisation investments are a chance to implement organisational innovations, new business models, and public services in a way unavailable for the areas without them. Modernisation projects implemented in cities and even in individual districts or housing estates can combine the elements of the traditional fuel and energy system (district heating, electricity generation transport, industry), and digital innovations (smart city or Industry 4.0 solutions). At the same time, the financial resources in a dedicated fund for mining regions should be supplemented by other support tools aimed at changing the industrial structure of the local economy, and professional activation of the current and past employees of the mining sector.

From restructuring to sustainable development. The case of Upper Silesia 63 64 From restructuring to sustainable development. The case of Upper Silesia Table 5. Areas of modernisation investments in the Silesian Voivodeship, sources of their funding, and necessary decisions

Source: WiseEuropa.

Investment area Key source of funding Necessary decisions

Energy sector – Country level: implementation of regulations that encourage network infrastructure Financial resources of companies and cost-effective development of distributed energy generation, and distributed, households, mobilised by a friendly low-emission heating, modernisation of the electricity network, low-emission energy regulatory environment and expanding the district heating network sources

Country level: country-wide programme with financial incentives Private sector, supported by public for deep thermal modernisation of buildings (attaining high energy Buildings – housing subsidies and EU funds efficiency, complete elimination of the direct use of fossil fuels in buildings)

Regional level: public buildings modernisation goals consistent with long-term goals of the EU (attaining high energy efficiency, EU funds, co-funding from domestic Buildings – public complete elimination of the direct use of fossil fuels in buildings) means and local authority budgets Country and EU level: adequate funds enabling financing of high energy efficiency investments

Country level: development of public transport with emphasis EU and domestic funds, co-funding Public transport on railway transport and zero-emission road transport as part from local authority budgets of the Low-Emission Transport Fund

Traditional, emission- EU and domestic support for process Country level: rewarding R&D projects aimed at major reduction and energy-intensive innovations enabling major reduction of of process emissions, supporting domestic companies in applying industry greenhouse gas emissions for EU funds for this purpose

Private funds supported by EU, dome- Regional level: focusing on sectoral diversification and using Other industry stic and regional co-funding for indu- the existing advantages in new markets strial commons and innovations

Regional level: emphasising the realisation of comprehensive Comprehensive EU funds, co-funding from domestic infrastructural investments consistent with the smart, green city revitalisation of funds and local authority budgets and Industry 4.0 concepts post-industrial areas EU level: Creating a dedicated EU fund supporting mining regions

Regional and country level: increased transparency of the plans for restructuring the mining sector, improved circulation of infor- Training and EU funds, co-funding from domestic mation regarding demand for employees in the sector, ensuring professional activation funds and local authority budgets prompt preparation and implementation of measures aimed at the employees in the sector EU level: Creating a dedicated EU fund supporting mining regions

From restructuring to sustainable development. The case of Upper Silesia 65 4. CONCLUSIONS

A just transition of the Silesian Voivodeship is connected to three inter- linked challenges: 1. Economic challenge, equally as applicable to the region as other parts of Poland. It is based on raising – within three decades – the level of GDP per capita and productivity of labour in the voivodeship THE INEVITABILITY OF to that of the prosperous states of Western Europe. The other two FURTHER RECONSTRUCTION challenges follow from the features shared by the regions with long industrial traditions dating back to the 19th century. OF THE REGION’S ECONOMIC 2. Demographic challenge, i.e. halting the decline in the number STRUCTURE HAS TO BE of the region’s inhabitants and the intensive ageing process of the ACCEPTED, SPECIFICALLY local population. This means stopping the problem of negative THE DECREASE OF THE natural increase and replacing intensive emigration with influx of SIGNIFICANCE OF HARD people to the voivodeship from other parts of Poland or from abroad. COAL MINING AND 3. Social challenge, which is to improve the quality of life. This THE TRADITIONAL, requires solving the interconnected social and ecological problems in the region: the areas with high unemployment, poverty and CONVENTIONAL ENERGY increased crime, decapitalised housing and transportation infra- INDUSTRY structure, or the very high level of air pollution. These challenges mean major restructuring of the region’s economy, especially accepting the inevitable reduction of the importance of hard coal mining, heavy industry and traditional, conventional energy industry . Even today, the scale of activities and influence of these sectors is much smaller than the way it is socially and politically perceived, and the current industrialisation of the Silesian Voivodeship is based on sectors unrelated to the energy-mining complex. The future will be similar, as in no other industrial region of Europe hard coal mining, heavy industry and the traditional energy industry plays an important economic role. On the contrary – they dominate only in poorly industrialised regions (e.g. Western Macedonia) or in areas using the depo- CLEAN COAL TECHNOLOGIES sits of other fuels, especially gas (e.g. Groningen). These regions, like ARE NOT THE SOLUTION the Silesian Voivodeship, however, are facing the problem of the decline TO THE PROBLEMS OF THE of resources which are viable for economically justified exploitation. MINING INDUSTRY IN UPPER In the Silesian Voivodeship, the decline of coal mining is taking place SILESIA due to the geological problems overlapping with the fast-rising labour costs. This causes a gradual, but inevitable decrease of profitability of coal extraction, which will cause closure of the mines active today within two decades. The chances for the so-called “clean coal technologies” to address this problem are low. Therefore, they should not be treated as one of the foundations of the region’s industrialisation, but as one of the niches in the broad portfo- lio of future production specialisations at the most. The technical solutions allowing major reduction of pollution emissions in the conventional energy sector are very costly, and unverified in large-scale

66 From restructuring to sustainable development. The case of Upper Silesia operations, and their economic attractiveness in comparison to low- -emission sources is limited. Accepting this situation would mean that measures could be determined to support the smooth development of the Silesian Voivodeship, and, at the same time, the necessary transition in a way that will be sustainable and secure for the people employed in the mining industry. The greatest developmental need of the regions is the diversification of the local industrial base with high-efficiency, low- -emission manufacturing subsectors, such as the machinery, electrotechnical, chemical and pharmaceutical industries. Also, the automotive industry, which is well-established in the region, and, similarly to the whole of Europe needs to change, will have to undergo major technological transition guaranteeing almost full reduction of transport emissions by 2050. The Silesian Voivodeship has an opportunity in this respect to attract investments that are aligned with the needs for production of electric, hybrid or hydrogen vehicles, both in the sphere of final production (passenger cars, trucks, buses, trains, etc.) and of components and their parts (batteries, fuel cells, electric and hybrid engines, etc.). Also, the other sectors facing the necessity of low-emission transition can provide an important developmental impulse for the Silesian Voivodeship: • energy industry – by expanding supply chains in the region using low-emission technologies producing energy from renewable sources, • heavy industry – thanks to the implementation of qualitative THE ECONOMIC GOAL OF changes in production processes consistent with the long-term climate goals of the European Union. THE DEVELOPMENTAL POLICY OF THE SILESIAN The industry policy and the measures to the transition of sensitive sec- VOIVODESHIP, BOTH THE tors should be complemented with the creation of conditions for service sector growth, especially in its more advanced segments: engineering, ONE ADOPTED BY LOCAL IT, medical, and consulting services. This requires not only actively AUTHORITIES, AND THE seeking investments in these areas, but also measures to help shape COUNTRY-WIDE INSTI high-quality human capital in the region, including the development of TUTIONS COLLABORATING higher education and a scientific and research & development base in WITH THEM, SHOULD the region in the direction consistent with the needs of the industry and BE THE SIGNIFICANT modern services. Support for innovation should also promote increased RECONSTRUCTION OF THE international competitiveness of the local higher education institutions and research institutes, and flow to the projects not connected to mining SECTORAL STRUCTURE OF and traditional energy industry, or support only measures with a real THE REGIONAL ECONOMY, chance of significant reduction of emissions and broad application of AND THE DEVELOPMENT OF the developed technologies on a global scale (e.g. in the case of reducing NEW, MORE PRODUCTIVE, emissions associated with using coke in metallurgy). AND, AT THE SAME TIME, To sum up, the economic goal of the developmental policy of the Sile- LOW-EMISSION TYPES sian Voivodeship, both the one adopted by local authorities, and the OF BUSINESS ACTIVITIES country-wide institutions collaborating with them, should be the signi- WITHIN IT ficant reconstruction of the sectoral structure of the regional economy, and the development of new, more productive, and, at the same time, low-emission types of business activities within it. Measures that are strictly economic should at the same time find strong support in the initiatives taken up in other areas. This is especially true for projects

From restructuring to sustainable development. The case of Upper Silesia 67 changing the nature of municipal and transportation infrastructure in the region. Because of a significant increase in the investments in thermal modernisation of buildings and replacement of heating sources, THE ECONOMIC GOAL OF it is possible not only to significantly improve the quality of life in the THE SILESIAN DEVELOP Silesian Voivodeship, greatly decreasing the problem of air pollution in MENT POLICY SHOULD the Silesian cities, but also to support the expansion of the supply chain BE THE SIGNIFCANT in a way that makes a large contribution to the local labour market and RECONSTRUCTION OF THE economy. Meanwhile, increasing spending on development and standardisation of public transport in the region (especially rail transport) SECTORAL STRUCTURE OF would make it possible to integrate local labour markets, decreasing the THE REGIONAL ECONOMY problem of the significant differences in the unemployment and poverty AND THE DEVELOPMENT OF rates between the neighbouring municipalities of the Silesian metropo- NEW, MORE PRODUCTIVE, litan area. In order for this to happen, the revitalisation of the urban AND LOW-EMISSION TYPES fabric and expansion and standardisation of the regional system of OF BUSINESS ACTIVITIES public transport should be accompanied by actions in the sphere of labour market policy, allowing people who lose their jobs in sectors undergoing restructuring or living in the most problematic parts of the metropolitan area to gain new qualifications.

Diagram 7. Key areas of measures to ensure Stable sustainable development Accepting the regulatory of Upper Silesia in the decline of mining Comprehensive 21st century environment and managing revitalisation for private the change Source: WiseEuropa. investments

Country-wide New approach mechanisms of Public to employees public support transport in mining sector for low-emission investments

Ambitious programme for Diversification Dedicated support modernisation of of industrial- for mining regions fuel and energy -scientific base from EU funds infrastructure

Long-term vision Cross-cutting Modernisation for changes in the activities funding energy sector

68 From restructuring to sustainable development. The case of Upper Silesia The causes of the demographic and social problems of the Silesian Voi- vodeship can be found in the environmental and economic legacy of the mining industry and heavy industry. Therefore, an integrated developmental policy focused on attracting modern investments and comprehensive improvement of the standard of living in the region by revitalising the urban fabric and post-industrial areas, improving the availability and the standard of transport services, and significantly reducing emission of pollution and the intensity of mining-related damage, will increase the attractiveness of the Silesian Voivodeship as a place to live on the country’s map. Together with an active policy of the local authorities promoting the influx of people into the region from other parts of Poland or from abroad, this would make it possible to maintain the strength of the regional labour market, even with the ageing of its demographic structure. Measures at voivodeship level must be supported by domestic and EU policies. Specifically, just transition in the region requires a country-wide framework for the key sectors (energy, buildings, transport, industry), which would ensure the means for investments supporting restructuring and revitalisation of the region, using not only public, but also private funds. Additionally, the state’s support is necessary for the inclusion of energy and mining companies in the process of just transition. This should be accompanied by changes to the rules of social insurance for the people employed in mining, facilitating the move from this sector to other sectors, as well as changing the profile of operations of mining companies. Financing modernisation will require legislative amendments at a country level, mobilising private funds, and also effective combination of public sources of funding at the regional, country and EU level, including the dedicated European fund supporting the transition of mining regions. Only the combination of regulatory amendments favouring the constant development of the Silesian Voivodeship with adequate financial support using public funds can ensure the constant increase in the competitiveness of the region’s economy and the improvement of the quality of life, at the same time limiting the social costs of the restructuring process.

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From restructuring to sustainable development. The case of Upper Silesia 71 From restructuring to sustainable development. The case of Upper Silesia 100% KEY RECOMMENDATIONS RECYCLED

THE ENVIRONMENT

THE INDUSTRY Deep changes in the fuel and energy supply system are needed on the way to A diversified and clean air and a low-emission economy competitive industry providing low-emission solutions for the European and global markets

SPATIAL ASPECT

A complex redevelopment including the improvement in energy efficiency and means of public transport

PEOPLE

Improving the quality of life for all the inhabitants with dedicated support to the ones in need

Why are we here? To stop the degradation of the planet's natural environment and to build a future in which humans live in harmony with nature.

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