by Yingxia Yang and Tanay Shanker

Spring 2023

Speakers:

Gazmararian presented his research including quantitative analysis of electoral behavior in Coal Country, surveys in the field at county fairs in Southwest Pennsylvania, and interviews with workers, communities, and companies on the front lines of the energy transition. The findings help diagnose the challenges coal mining regions face, as well as identify potential solutions to unlock the impasse. Krause presented her work examining historical and contemporary labor demand shocks in Appalachia’s coal regions, investigating how shocks in one generation reverberate into the next, and how disadvantage accumulates over time. Broude discussed her community organizing work in helping communities across the New England region transition away from economies reliant on coal-fired power plants, with a focus on Somerset, MA. 

  • Challenge 1: Coal communities may be hit hard by the recent shocks with little resiliency due to the exacerbation effect of the historical coal shocks that led to less college-educated population 

Coal-producing regions have already experienced job loss, out-migration, lower earnings and fiscal income, and increased government transfer receipt as a result of decreased demand for coal, and the ongoing energy transition is likely to put greater pressure on these same communities. By examining the effects of historical coal shocks in the 1980s and contemporary (2007-2017) coal shocks across Appalachian counties, Krause’s research shows that experiencing historical adverse coal shocks makes coal-dependent communities more vulnerable and demonstrate less resilience to shocks in subsequent generations, in part because the previous shocks fundamentally altered the educational composition of affected communities and led to large population declines in young and better educated people. These insights preview the potentially damaging implications of future contractions in the coal industry, revealing the need for policy efforts that might ameliorate the painful local adjustment costs associated with the energy transition going forward.

Policy Recommendation: In anticipating the hard hit to communities that have already been transformed by decades of decline, the government should implement policies to retain skilled residents, invest in human capital, and provide workforce training both improving distressed communities’ competitiveness while providing critical income support in the event of job loss and in places with few alternative employment opportunities. 

  • Challenge 2: Elections, misinformation, and government credibility create an impasse and prevent coal regions from moving forward

Gazmararian’s research shows, first, how as communities have incurred the economic effects of the coal industry’s decline, political support has swung in the region from parties that support the clean energy transition to those that seek to block it. Second, Gazmararian finds that the lack of quality information, and even misinformation from politicians hailing the return of coal, undermines the ability of individuals and communities to plan for the transition. One of his surveys shows that 53% of a crucial Southwest Pennsylvania coal mining community thought that coal remains competitive, which contributes to resistance to economic diversification efforts. However, when provided with the correct information, support for clean energy rises by 11%. Lastly, his research reveals how government promises to facilitate the energy transition with green investments, compensation, and retraining confront credibility challenges. Not only do communities fear these policies could be reversed in the future, they have seen promises broken before.

Policy Recommendation: Policy design choices that create credibility, such as community input over the transition and transparency around the benefits of investments, can build support for the clean energy transition in coal regions and beyond. 

  • Challenge 3: In places where the communities do support transitioning out of coal, the lack of a vision and a development strategy can still lead to the vulnerability of coal communities 

Broude described her experience in Somerset, MA, where the community supported phasing out coal-fired power plants due to concerns with the adverse health effect of the environmental pollution and the bleak profitability of those plants. However, the community still faced the challenges after the power plants ceased operation because there was no clear vision for what the reuse and redevelopment plan should be. Ultimately the community in Somerset formed Somerset Transition Committee to work with the government and companies to develop an action plan with citizen involvement that ensures a just transition toward diverse and sustainable economic growth and stability for the town.  The town is now on its path to become an offshore wind turbine manufacturing center in the US. 

Policy Recommendation: State and local governments should take the leadership to develop the vision and development strategy while closely collaborating with communities and corporations.

 

This is a report for a study group titled The Future of Coal Regions, co-sponsored by the Reimagining the Economy Project and the Belfer Center's Environment and Natural Resources Program, designed for Harvard students to learn and share knowledge about the challenges facing coal-producing regions, to identify opportunities for overcoming these challenges, and to foster connections and collaborations between students, faculty, and affiliates. Over the course of Spring 2023, the study group focused on coal-producing regions around the world, but the discussion generated insights applicable to other fossil-fuel-producing regions.