Report Highlights Federal Policy Solutions for an Equitable Energy Transition for Fossil Fuel Workers

(WASHINGTON — March 25, 2021) A new report from Resources for the Future and Environmental Defense Fund demonstrates how federal lawmakers can deploy a suite of policies to tackle the energy transition challenges facing fossil fuel workers and communities across the country.

The report summarizes lessons from over 100 federal policies into four primary categories of solutions: workforce development and labor standards; economic development; infrastructure and environmental remediation; and public benefits. For fossil fuel workers and communities to thrive in the future, transition planning needs to start now.

“This report helps policymakers identify the key pieces of a comprehensive, multi-agency just transition policy package, and is designed to inform future legislative efforts and executive actions in the United States,” lead author and RFF Senior Research Associate Wesley Look said. “As business leaders, lawmakers, and Americans across the country tackle the urgent threat of climate change, it’s important to do so in ways that build prosperity in working-class communities, especially America’s fossil fuel regions, which could otherwise be hard hit by policies to decarbonize the economy.”

U.S. coal production has decreased by roughly 40% over the past decade as natural gas and clean energy costs have fallen. As a result of this and other market trends, communities reliant on coal have seen unemployment soar, residents leave in search of other opportunities and revenue for critical community services like infrastructure plummet. Additionally, the COVID-19 pandemic has exacerbated these losses and brought new challenges for coal, oil, and gas producing communities.

As the Biden-Harris administration and federal lawmakers focus on economic recovery and longer-term efforts to reduce emissions, a suite of robust policies are needed to support fossil fuel workers and communities in the clean energy transition. This includes programs that provide high-quality jobs in the near term, investing in new economic opportunities that can sustain communities, securing worker protections and benefits, and more.

“Lawmakers need to lay the groundwork for an equitable transition for fossil fuel workers and communities now,” said Jake Higdon, author and Senior Analyst for U.S. Climate Policy at EDF. “The lessons learned from coal regions highlight the urgent need for investment and proactive planning. A comprehensive, cohesive approach that supports workers and communities should be deployed alongside ambitious policies to tackle the climate crisis.”

The report finds that the following four complementary and customizable policy categories are essential for supporting a fair transition:

• Workforce development and labor standards: Programs that protect workers and help them find new jobs, including job training, career services, and supplemental supports such as childcare; as well as protections for workers, such as compensation standards and workplace safety standards.
• Economic development: Policies such as grants to help diversify local economies, loans for small businesses, and technical assistance for local planning efforts, all of which can bolster local economies where jobs and revenue from fossil fuel production have been lost in the past and may be lost in the future.
• Infrastructure and environmental remediation: Programs that can build and update critical infrastructure that enable businesses to thrive. In communities with a legacy of pollution, environmental remediation programs can help create healthier, cleaner communities while creating near-term jobs.
• Public benefits: As these other policy approaches take hold, public benefit programs—such as unemployment insurance, pension, and health care programs—are an essential first line of defense for workers and families and help stabilize local economies.

In addition to outlining the need for these interconnecting policies, the report offers key insights for policy design:

• Effective coordination: Policies must be well coordinated among federal agencies and across local, state, tribal, and federal levels. The Appalachian Regional Commission, which bolsters economic development across 13 states and combines federal, state, and local leadership, is a good example.
• Strategic timing and sequencing: The sequencing of just transition policy implementation will impact efficacy and cost. Early actions should include efforts to convene stakeholders to proactively plan; ensure workers receive pensions and benefits; implement programs to shore up local tax revenues; and boost new family-supporting job opportunities.
• Ensuring equitable and inclusive policymaking: Policies should address a legacy of underinvestment and environmental injustice in low-income communities and communities of color, and transparently engage affected workers and communities.
• Sustaining local government revenue: To support state and local governments reliant on fossil fuel production for revenue, federal lawmakers will need to provide support. These funds could come from investments in additional local tax base opportunities, transfers from general funds, or new federal revenue sources, such as a carbon price. States can help localities by providing them with more autonomy over their financial decisions.

Read the full report here and blog with key takeaways here.

RFF and EDF’s Fairness for Workers and Communities series is designed to help policymakers assess strategies to address social and economic challenges associated with the shift to a clean energy economy. While many of these challenges are not new, they have been brought into focus by the COVID-19 pandemic, which has accelerated job loss in the energy sector, particularly in regions already struggling. The previous four reports and accompanying blogs can be found on RFF’s site and EDF’s site.