by Tony Ditta

Over the last 40 years, the coal industry has been buffeted by competition from oil and natural gas. In 1979, it employed over 234,000 Americans. Today just 38,000 Americans work in coal mining. And more competition is on the horizon; as markets transition to energy with lower carbon emissions, demand for coal will likely fall further. What lessons can we learn from the decline of coal? And what can coal-mining-intensive regions do to prepare for the energy transition?

Coal Region Just Transition ReportWest Virginia is at the heart of these questions as it employs over a quarter of American coal miners. So, this spring, a group of Harvard Kennedy School students visited West Virginia with support from Reimagining the Economy and the Belfer Center for Science and International Affairs. They toured a mine and met with local union leaders, policymakers, and nonprofits. Here we discuss the key takeaways from their visit.

Although economic concerns dominate the policy conversation, the decline of coal is not just an economic issue; there’s also a cultural component. As difficult and often dangerous work, mining has contributed to a community sense of work ethic, commitment, and camaraderie. While these virtues can arise in any job, it’s unlikely that a new industry will be as physically exacting as mining. So, West Virginians worry about a loss of community values.

They also take pride in the history of coal as an engine of American economic growth. From the 1880s to the 1950s — a period of major industrial expansion — coal was the largest source of energy production in the country. Even after the 1950s, with the rise of oil and natural gas, coal has remained a significant source of energy. Today’s miners and community members appreciate that they carry on a legacy which contributed so much to American wealth and power. Most new industries won’t have this kind of history.

There’s also a political component to the energy transition. Most of the push for lower carbon emissions comes from a desire to mitigate climate change. Climate change is a politically polarizing issue (only 57% of West Virginians believe that global warming is occurring, and only 43% believe that it is caused by human activities — the lowest of any state on both counts). And, even to the extent that people agree, it is a global issue while the costs of transition are borne locally. That said, union leaders are supportive of some Democratic politicians because of their labor-friendly stances. So, the political divide doesn’t cut neatly along the typical American party lines. There may be opportunities for bipartisan agreement on growth policies. By pitching the energy transition as an opportunity for local economic growth rather than a fight against global climate change, leaders can appeal to a broader base of constituents.

Although coal mining is culturally and politically entrenched, there is some consensus that the local economy needs to incorporate new industries. Miners are optimistic about the future of coal, but remain concerned about job security in the face of automation and volatile demand. Union leaders want more funds to train former miners in new skills. The local state delegate is pushing for a changing energy portfolio, and nonprofits are pushing innovation and diversification.

In the way of this change is a coordination problem: miners don’t want to leave mining for training and other work until good jobs are available, and businesses don’t want to bring in good jobs until there is a sufficiently large number of trained workers. If this problem persists, many miners will likely be forced out of their jobs as demand for coal falls, and they will have no local alternatives. So, this seems like a natural opportunity for policymakers to collaborate with workers and businesses to coordinate a solution (for example, consider Virginia’s pledge of $1.1 billion into tech education along with its successful bid for Amazon’s second headquarters). 

However, this too faces challenges. For one thing, the transition will require resources. Although they may pay for themselves in the long run, there will be short run costs to providing education, new job training, and a supportive social safety net. The transition will also require information and expertise. When collaborating with and investing in local business development, policymakers must be able to evaluate the long term costs and benefits. The state delegate with whom the students met highlighted the difficulty of this task.

West Virginians know that their local economy is going to change. While no one can doubt a coal miner’s willingness to work hard, a smooth transition will require more than individual work ethic. It will require concerted effort by all members of the community: labor, business leaders, and the government. 

National policies like the Infrastructure Investment and Jobs Act, the CHIPS Act, and the Inflation Reduction Act offer subsidies and tax incentives that could give local policymakers the resources they need for labor and business investment, but navigating federal legislation and bureaucracy requires its own combination of resources, information, and expertise. The students found that few people in the communities they visited are aware of the incentives provided by this legislation, and those that are aware often lack the technical expertise required to compete for the opportunities. Although these bills allocate over $1 trillion in spending — in many cases specifically to address the types of challenges that West Virginia faces — the money won’t end up where it needs to go without the active work of bureaucrats and policymakers.

This conundrum is likely common throughout the country; the most economically distressed regions have the least capacity to manage red tape at the federal level. But these regions would also likely benefit the most from an influx of funds. 

The full report from the students of the Future of Coal Regions Study Group is available here

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.