Erik Gamzejev: What will happen to Ida-Viru County after the 340 million euros are spent?
University of Tartu researchers warn that after the Just Transition Fund money runs out, Ida-Viru County's future remains uncertain, and preparations for further support stages should begin already.
Researchers from the University of Tartu have presented initial findings from a study on the socio-economic well-being of Ida-Viru County residents and labour-force monitoring. The project is set to last several years and costs nearly 1.5 million euros, funded by the Just Transition Fund, which is meant to help the region cope with the decline of the oil shale industry under EU climate policy.
Survey responses show that residents would stay if there are well-paid jobs, schools, healthcare and affordable housing opportunities. Otherwise, they leave. High unemployment and lower income create insecurity and anxiety. The researchers note that similar patterns would likely be found in South and West Estonia, as these problems affect all regions far from Tallinn and Tartu.
Ida-Viru County's specific challenge is that EU carbon trading rules have accelerated negative trends in the oil shale sector. Still, the fund has brought visible positive changes: the first stage of the Narva magnet factory is complete, a unique nature spa has opened on the shore of Lake Peipus, Jõhvi film studios are nearing completion, companies are being set up in the Kohtla-Järve business park, and an oxygen plant is under construction in Auvere. Dozens of small businesses have built new facilities and bought equipment with fund support, local university colleges have strengthened their positions, and municipalities have launched projects — Alutaguse renovated the old post office in Iisaku, Jõhvi is building a social services centre, and Kohtla-Järve is reviving the Punamütsike kindergarten. The fund has also covered cultural festivals and sports events.
Despite all this, the one-off 340-million-euro fund remains only a garnish compared to the employment and tax revenue that oil shale companies previously provided. The fund is acting as a slower painkiller than hoped. Creating new businesses takes time, and some companies that received support a year or two ago have not yet started construction; some have withdrawn due to high risks. The fund helps with buildings and equipment, but entrepreneurs must also convince lenders and investors to put their own money into the projects.
The author argues that Estonian politicians should strongly defend local industry during the reform of the EU emissions trading system. He warns against repeating the mistake of about ten years ago, when a still-functioning heavy industry was strangled first and a long-term plan was made only afterwards. New-generation companies should be successfully launched before considering downsizing fossil-based industry.
Researchers stress that the question remains: what happens when the fund's money is used up? They call for preparing a second and possibly third stage of the Just Transition Fund to ensure that already started initiatives do not collapse before gaining momentum. A strong Ida-Viru County with a diversified economy benefits the whole of Estonia.
