The following is a contributed article by Jillian Neuberger, legislative engagement associate at the World Resources Institute, and Devashree Saha, a senior associate at WRI.
The U.S. House of Representatives recently released their legislative response to the climate crisis, the Climate Leadership and Environmental Action for our Nation's (CLEAN) Future Act. While this proposal has a long way to go before it could become law, it is the first major piece of climate legislation introduced in Congress since President Joe Biden assumed office.
In addition to provisions on climate priorities — including a national emissions-reduction target, environmental justice, a clean energy standard and much more — the draft includes provisions for transitioning workers and communities to a low-carbon economy. After years of stalled federal action, this is a welcome signal that national attention is shifting to address the challenges of transitioning to a clean energy future in a just and equitable manner.
Addressing climate change can bolster U.S. competitiveness and long-term economic success while spurring growth in new and greening sectors. At the same time, it will be important to ensure that workers and communities adversely impacted by the low-carbon transition are not left behind.
Although developing a just transition strategy is a shared obligation among both private actors and the public sector, at local, state, and national levels, the federal government has a leadership role to play in scoping, funding, and coordinating a just transition. After all, the transition to a low-carbon economy is a national — even global — phenomena and the response should be too.
We cannot solve a problem we cannot see. Assessing the scope and nature of the labor and community impacts of the transition from a carbon-intensive to a low-carbon economy is an essential first step toward planning a future that delivers benefits for all Americans.
Conversations around the labor impacts of a clean energy transition often focus on the coal industry, but impacts are much broader. The Sustainable Development Solutions' Zero Carbon Action Plan found that about 12,000 additional workers in coal mining and related industries will face job loses every year from 2021 to 2030 as coal is phased out; in contrast, about 34,000 workers will lose their jobs each year from 2031 to 2050 as oil and gas is phased out.
Beyond the energy sector, there is a range of carbon-intensive sectors, including within transportation and industry, that will need to be transformed to achieve climate goals. This is further complicated by the fact that the clean energy transition is not occurring in a vacuum. Instead, this transition will overlap with other macroeconomic trends that can dislocate workers, like globalization and automation.
Finally, while it is common to focus on the employment impacts of a changing economy, community-level disruption will be severe as local tax bases contract and spending in fossil fuel-supported communities declines.
The CLEAN Future Act would start taking stock of the transition by requiring the Department of Energy to enter into an agreement with the National Academy of Sciences to study the impacts of achieving a net-zero future on communities and workers impacted by the energy transition. The proposed studies would take a broad look at who may be adversely impacted by a low-carbon transition across sectors and geographies, and will inform federal strategies to effectively manage the shift. This research could build on the Academy's study of decarbonizing the U.S. energy system, which starts to look at the policies associated with a just transition.
Understanding and assessing the full scope of transition impacts will be foundational to future federal programming. The federal government can learn from steps taken by both international and subnational actors. For example, both Colorado and Canada have established task forces, comprised of experts and stakeholders, to study the challenges posed by the transition away from coal and propose recommendations for consideration and implementation.
Funding commensurate to the challenge
Successful transition will require significant investment in community and worker assistance programs from the public, private, and nonprofit sectors. The public sector can assist workers by providing financial support for training, job searching and relocation, as well as temporary "wage differential" benefits if a worker's new job is lower-paying. Effective economic development and diversification strategies at the community level will also require time and resources.
Some of these programs and strategies are best delivered by the federal government, to avoid a hodgepodge of state responses. Federal just transition investments can be delivered via existing programs, with increases in federal funding levels. Existing economic development programs for coal communities can be enhanced to meet the full scope of the transition needed, including the Economic Development Administration's Assistance to Coal Communities program and the Appalachian Regional Commission's Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative.
Other programs can be redirected to help workers and communities adversely impacted by energy transition. Amending and improving the Trade Adjustment Assistance program — which assists workers dislocated by foreign trade — to cover displaced energy workers could be one such option. The approach taken by Obama-era POWER Plus Plan, which leveraged existing programs across agencies to deliver support in close partnership with coal communities, can be an important model for the federal government's just transition effort going forward.
Right now, there are too many variables to say with confidence how much just transition programs would cost the federal government. But work done by the Political Economy Research Institute at the University of Massachusetts-Amherst, suggests the total cost would be modest: $600 million per year to support fossil fuel-dependent workers and communities. Moreover, effectively planning for just transition now could greatly reduce the long-term costs of the transition.
The CLEAN Future Act is a first step in laying the groundwork for financing a just and equitable transition. The draft bill would establish a program that could provide eligible local governments with grants to plan for the transition, followed by annual decreasing payments to offset lost local revenue.
Creating an effective federal mechanism to deliver a just transition
The current patchwork of federal transition programming lacks cohesion and coordination, inhibiting coherent federal response and making it challenging for communities to access resources they badly need. The White House is well-positioned to address this costly inefficiency and coordinate activities across agencies, while drawing on stakeholder expertise and facilitating stakeholder engagement. The CLEAN Future Act embraces this approach, establishing an Office of Energy and Economic Transition in the Executive Office of the President to coordinate and implement programing. The Director of the Office leads an interagency task force to harmonize federal transition activities.
While federal leadership and vision is critical, national programming must be designed and implemented in a way that uplifts and increases the ambition and resources of state and local actors. Effective solutions will be community-driven and built from the ground up. Federal investment needs to support place-based economic strategies that build on local and regional assets and are also transparent and accountable to local communities.
There is precedence for such coordination on transition issues in Appalachia. Since 2015 the Appalachian Regional Commission has given more than $238 million to communities impacted by the decline in coal through the previously referenced POWER Initiative. While this program deploys federal funding, it does so in close partnership with impacted communities that determine priorities.
The CLEAN Future Act embraces this approach. The draft bill includes mechanisms to facilitate coordination across levels of governance, including community-based transition hubs to support towns and workers receiving federal support and a stakeholder advisory committee to collaborate with community members and other relevant actors.
Finally, while the promise of the CLEAN Future Act and executive action is encouraging and meaningful, a federal mechanism for a just transition must be able to outlast the current political moment. In the past, shifting political winds have derailed transition planning. The Obama Administration's plan to address the economic and community impacts of transitioning away from coal — the POWER Plus Plan — was never fully realized, in part because of a change in administration.
Building a prosperous, just future, and addressing climate change in a way that accounts for all communities, requires immediate actions that will lead to swift benefits so obvious that the policies can transcend political terms.