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Aresearchagendaforeconomicresilienceinfossilfuel–dependent

communities

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AResearchAgendaforEconomicResilienceinFossilFuel–DependentCommunies

Authors

LeonClarkeistheDirectorofDecarbonizaonPathwaysattheBezosEarthFund.

MarkCursisanassociateprofessoratWakeForestUniversity.

AnnEisenbergisaprofessoroflawandResearchDirectoroftheCenterforEnergyand

SustainableDevelopmentattheWestVirginiaUniversitySchoolofLaw.

EmilyGrubertisanassociateprofessorofsustainableenergypolicyintheKeoughSchoolof

GlobalA?airsattheUniversityofNotreDame.

JuliaHaggertyisanassociateprofessorofgeographyatMontanaStateUniversityanda

universityfellowatResourcesfortheFuture.

AlexJamesisanassociateprofessorattheUniversityoyoming.

NathanM.JensenisaprofessorintheDepartmentofGovernmentattheUniversityof

Texas-Ausn.

NoahKaufman*(nk2792@)isaseniorresearchscholarattheCenteronGlobal

EnergyPolicyatColumbiaUniversitySIPA.

EleanorKrauseisaPh.D.candidaeHarvardUniversityKennedySchool.

DanielRaimi*(Raimi@r?.orgafellowanddirectoroftheEquityintheEnergyTransion

IniaveatResourcesforthFuture.

DusnTingleyisaprofessorofgovernmentatHarvardUniversity.

JeremyWeberisaprattheUniversityofPisburgh.

*Correspondinauthors

Acknowledgements:WethankZacharyD.Whitlockforhisexcellentresearchsupport.

Fundinginformaon:WethankTheBezosEarthFundforitssupportfortheworkonthis

manuscript

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Introducon

InDecember2023,worldleadersconvenedinDubaiandpledgedtotransiontheen

systemawayfromfossilfuelsinresponsetothethreatsofclimatechange(1).Tounderstnd

howtheunprecedentedeconomictransformaonsrequiredtoachievethisgoalmayalterthe

world’senergymarketsandphysicalenergyinfrastructure,decisionmakerscanlookto

thousandsofpublicaonsfromhundredsofenergysystemmodelsthatdepictthetrade-o?son

cricalissues,suchasthespeedanddepthofemissionsreducons,theircosts,andthee?ects

onglobalenergyaccess.

InDubai,worldleadersalsocommiedtoa“just,orderly,andequitable”transion,acharge

thatincludesallofsociety,withspecialaenontothosewhoaremostvulnerabletoclimate

changeandtheeconomicchangesrequiredfordecarbonizaon.However,comparedtothe

literatureonthephysicalenergysystem,onlyascantbodyofevidenceexistsonhowto

increaseeconomicresilience1infossilfuel–dependentcommuniesastheworldtransions

awayfromfossilfuels.Mostresearchonthistopichasfocusedoncharacterizingthescopeof

thechallenge(3–5)andprovidingbroadprinciplesforaddresingit(6–8),ratherthanproposing

andevaluangspeci?cpolicyintervenons.

Thisarclediscussesthecricalneedforaddionalscholarshiptohelppolicymakersdesign,

implement,andevaluatestrategiesforsupporngtheconomiesoffossilfuel–dependent

regions.OurfocusisontheUnitedStates,althoughthechallengeappliestoregionsandnaons

aroundtheworld(9).

Amongotherpriories,werecommendresearchonalternaveemploymentoponsforthe

fossilfuelworkforce,policiestostgovernmentsthatdependheavilyonfossilfuel

revenues,andlessonsfromprevinomictransions.Wealsohighlighttheneedfor

meculoustrackingofongoinge?ortstobuildeconomicresilienceinfossilfuel-dependent

communiestoinformthesignofmoree?ecvestrategiesoverme.

TheNeedtoSupportUSFossilFuel–DependentCommunies

TheUnitedStatesisrld’slargestproducerofoilandnaturalgasandthefourthlargest

producerofcoal(10).re1illustrateshowfossilfuelindustriesaccountforlargesharesof

employmentiertainregions(the?gureillustratesdirectjobsonly,excludingindirector

inducedemploment).2Stateandlocalgovernmentsintheseregionsalsodependheavilyon

fossilfuelindustriesforrevenuetofundschools,roads,andotheressenalservices(11,12).

1By“economicresilience,”werefertotheabilityoflocalandregionaleconomiestorecoverfromnegave

economicshocks(2)—inthiscase,fromdecliningdemandforandproduconoffossilfuels.

2Empoymenanalysesoenincludethee?ectsofinvestmentindirect,indirect,andinducedjobs.Inthiscontext,

“direct”referstoemploymentintherelevantindustries(e.g.,oilandgasextracon),“indirect”refersto

employmentinassociatedsupplychains(e.g.,manufacturingvehiclesusedinoilandgasextracon),and

2

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Figure1.DirectFossilFuelEmploymentSharebyCounty

Notes:MapbyauthorsbasedondatafromUSensus(20Percentagesrepresenttheshareoftotal

employmentineachcountythatcomesfromNothAmericaIndustrialClassi?caonCodessectors211,

213111,213112,213113,2121,221112,221210,23712,324,33313,4247,and486(seeTableA-1inthe

Appendixforcodede?nions).

Sinceitspeakin2008,UScoalproduconhasdeclinedbyroughlyhalfduetotheincreased

availabilityoflow-costnaturalgas,environmentalconcerns,andotherfactors(13,14).This

declinehascreateddeepeconomihardshipinsomecoal-dependentregions,mirroringthe

experiencesofothercommuniehavelostdominantindustries(15,16).Atransionaway

fromfossilfuelsinthecomingdeillcreateanoverlappingmixofeconomic,

environmental,andsocialchngesformanymoreUScommunies,raisingtheneedfornew

strategiesthatcanbuildecoomicresilience,ensureconnuedhigh-qualityemployment

opportunies,andmaintainpublicservices.Addingtothesechallenges,aslongasfossil

resourcesaresllinuse,safetyandreliabilityconcernsrequireworkersandhostcommunies

toconnuesupporssilinfrastructure,evenwiththeawarenessthatsuchacviesare

?nite(17).

Althoughourfusinthisarcleisonplaceswherefossilfuelsplayadirectroleinsupporng

localeconomie,achievingclimategoalsmayalsocauseacutedisruponstolocaleconomies

dependentonotherindustries.Thisincludesmanufacturingofinternalcombusonengine

vehicles(18),primarysteelproducon(19),andotheremissions-intensiveindustries.

Supporngfossilfuel-dependentcommuniesmaersfortheworld’sclimateambionsaswell.

AglobalresponsetoclimatechangerequiresstrongUSleadershipgiventheUS’roleasthe

induced”referstoemploymentresulngfromindustryspendingatunrelatedestablishments(e.g.,oilandgas

xtraconworkerspurchasingclothesorfood).

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world’slargesteconomyandlargestcumulaveemierofgreenhousegasemissions,but

providingitwillbedi?cult,ifnotimpossible,iflargepartsofthenaonandtheirelected

representavesopposeclimateaconinpartduetotheeconomicrisksofatransioy

fromfossilfuels.Thus,increasingeconomicresilienceinfossilfuel–dependentregion

advancetwomajorobjecves:(1)increasingthelikelihoodthattheUnitedStates(andth

world)willsuccessfullyrespondtoclimatethreatsand(2)ensuringthatthebene?tsand

burdensofanenergytransionarebroadlyshared.

GrowingPolicySupport

Insomefossilfuel–dependentregions—parcularlythosewherecoalminesandpowerplants

haveclosedorfaceuncertainfutures—localgovernmento?cials,economicdevelopment

praconers,andothershaveworkedforyears—ifnotdecades—tobuildlocaleconomic

resilience.However,their?nancialandtechnicalcapaciesareoenimited.Unlrecently,the

USfederalgovernmenthadtakenfewstepstohelpthesecommuniesplanforthefuture(one

exceponwastheObamaadministraon’sPOWERiniave,whichreceivedparal?ndingfrom

Congressof$100–200millionperyeartosupportstrugglingcoalcommunies(20)).

Inrecentyears,federalsupportforfossilfuelcommunhasincreasedmarkedly.TheBiden

administraonhasputplace-basedpolicyathecenteitseconomicagendaandestablished

anInteragencyWorkingGroup(IWG)tosupporteconomicdevelopmentobjecvesincoal-

dependentregions.

Newlaws,parcularlytheAmericanRescuePlan(2021),InfrastructureInvestmentandJobsAct

(IIJA,2021),andIn?aonReduconAct(2022),haveauthorizedmajorplace-basedinvestments.

Table1illustratesthewiderangeofprogramsandpoliciesthatexclusivelyorparallytarget

fossilfuel–dependentcommunicludingfundingboostsforlong-standingprograms,such

astheAppalachianRegionalCom,andnew?nancialincenvesforcleanenergy

development.Manyotherproramsthatdonotspeci?callytargetfossilfuel-dependent

communieso?erfundingfwhichthesecommuniesarealsoeligible.

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Table1.FederalFundingTiedtoPlace-BasedPolicyinFossilfuel–dependentCommu

ProgramFocusonFunding

fossil

communities

IWGonEnergyCommunities1Exclusive$5million/year

HealthandHumanServicesFocuson

EnergyCommunities2Exclusive~$25million/year

DOECleanEnergyDemonstrationProgram

onCurrentandFormerMineLand3Exclusive$500million

AssistancetoCoalCommunities4Exclusive~$550million

DOEAdvancedEnergyManufacturingand

RecyclingGrantProgram3Exclusive$750million

AppalachianRegionalCommission3Partial$1billion

Brownfields3Partial$1.5billion

Carboncapturedemonstrationandpilots3PartialOver$3billion

Hydrogenhubs3Partial~$4billion

AdvancedManufacturingTaxCredit5Partial$4billionforcoalcommunities

Orphanedoilandgaswells3Exclusive$4.7billion

DOEEnergyInfrastructureReinvestment$5billioncreditsubsidy(upto

LoanProgram5Exclusive

$250billionloanauthority)

AbandonedMineLands3Partial~$11billion

EnergyCommunityTaxCreditBonus5ExclusiveLikelytensofbillions

Notes:Authors’analysisofvariousprramsasofJanuary2024.1:EstablishedinExecuveOrder14008.

2:AuthorizedundertheConsolidateopriaonsActof2023.SeeAppendixfordetailsonthese

programsandstateandNGO-lede?AuthorizedundertheIIJA.AppalachianRegionalCommission

hasongoingfunding,with$200llioninappropriaonsinFY2023.4:$552millionwasfundedunder

variousAmericanRescuePlanogramsandtheBuildBackBeerRegionalChallenge,withongoing

fundingof$50million/year.5:AuthorzedundertheIn?aonReduconAct.SeeAppendixfordetails.

States,Navenaons,andNGOsarealsoseekingtobuildeconomicresilienceinfossilfuel-

dependentregions.mple,Colorado,Illinois,andNewMexicoareimplemenngplansto

supportcoalcommun(21–23),andCaliforniaisbeginningastatewidee?orttobuild

economicresilce,includinginitsmajoroil-producingregion(24).Fossilfuel–dependent

NavenaonssuchastheSouthernUteIndianTribe,arediversifyingtheireconomic

developmentstrategiestosupportlong-termeconomicand?scalhealth(25).NGOs,suchasthe

JustTransionFundandNaonalAssociaonofCounes,areworkingtohelpcoalcommunies

diversifytheireconomies,respondtoeconomicdisrupons,andbuildnetworksbetween

communityleaders(26,27).

LimitaonsofExisngPolicies

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Althoughunprecedentedinmagnitudeandscope,thesee?ortstosupportfossilfuel–

dependentcommuniesarelikelyinsu?cientforavarietyofreasons.First,theyprimarilyfocus

oncoalcommunies,whichareconcentratedinthreeregions:Appalachia,theInterain

West(parcularlyWyoming),andtheIllinoisbasin(Figure1).However,theoilandgaris

alargeremployerandpublicrevenuegenerator,anditismoregeographicallydispersedross

theUS(11,28).Somemajorprograms,suchasthefederalbonustaxcreditforinvestmentin

“energycommunies,”alsopoorlytargetthelocaonswiththegreatesteconomicdependence

onfossilfuels(3).

Second,mostpoliciesfocusnotonbuildinglong-termeconomicresiliencebutnsteadfocus

narrowlyonboosngcleanenergydeploymentoraddressingsitecontaminaon.Inplaces

wherealternaveprivatesectorinvestmentandemploymentopportuniesmaybelimited,

exisngpoliciesgenerallydonoto?erotherformsofreliefforworkersorcommunies,suchas

extendedunemploymentinsurance,supportforlocalgovernment?nances,orotherbroad

needs.

Third,thesee?orts—parcularlyatthefederallevel—o?erlileassurancethatpolicieswillbe

sustained.Althoughpolicalprioriesnaturallychangeoverme,thedeepdividebetweenthe

twomajorUSpolicalparesonenergyandclimatepythreatensthedurabilityofpublic

policies,includingthosedesignedtobuildecnomicreence.Alackofsustainedcommitment

totheseregionswillexacerbatemanylocalstakeholders’distrustofthefederalgovernment,

deterringtheirparcipaoninongoingandfuturee?orts(29).Morebroadly,policydesignwill

becricaltoprovideintervenonsthataresupprtedlocally,whichinturncanmakethose

policiesmoreenduringacrosspolicalcycles(29–31).

Fourth,policye?ortsaresmall,relavetonotonlytheneedsofworkersandcommuniesbut

alsothescaleofinvestment?owitransformthephysicalenergysystem.Forexample,

federalincenvestospeeddeploofcleanenergyintheIn?aonReduconActmaycost

$1.2trillionoverthenext10yars(32),whereasfederalprogramsfocusedonfossilfuel–

dependentcommuniesaremallerbyroughlytwoordersofmagnitude(seeTable1).Similarly,

nofederalprogramsupportsstateandlocalgovernmentbudgetsthatreceivetensofbillionsof

dollarsannuallyfromfossilfuelextraconandinfrastructure(11).

Finally,withonlyalvidencebaseonwhatstrategieso?erthemostpromising

approaches,thedesigplace-basedpoliciestosupportfossilfuelcommunieshasbeen

drivenprimariytheoriesofchangeandpolicalexpediencies.Suchalackofanalysisand

evidencecreatsanenormousopportunityforscholars.

TheOpportunityforAddionalScholarship

Amodestbutgrowingbodyofresearchexaminesstrategiesforbuildingeconomicresiliencein

fossilfuel–dependentcommunies.Insightsincludetheimportanceofproacveplanningfor

futuretransions(33,34)andtheneedtoempowerlocalcommuniestoensurethatpoliciesat

estteorfederallevelsupport,ratherthandictate,localprioriesandpreferences(17).

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Scholarshavealsobeguntoestablishcrucialbaselinedata,suchastheemploymentand

economicoutcomesofdisplacedfossilfuelworkers(35–37).

Sll,muchmoreresearchisneededtoidenfyandevaluatetangiblestrategiesthatceto

meetthechallengesfacingtheeconomiesoffossilfuel–dependentregions.Notably,the

disciplineofeconomicshas,withsomeimportantexcepons(e.g.,38),focusedonthe

limitaonsofplace-basedpoliciesratherthandesigningbeerstrategiestosupporttheselocal

economies.Thankfully,economistsandotherscholarsarenowfocusingmoreaenonon

theseissuesdueinparttotheuniquechallengesposedbytheenergytransionandabeer

understandingofthelimitsofcapitalandlabormobility(4,5,39).

Theremainderofthissecondescribeshownewscholarshipcanhelppolicymakersbeer

idenfyandmigateriskstolocaleconomies.Aswithanyemergingresearchprogram,new

areaswillalsoarise,leadingtoadynamicaccumulaonofknowledgeandbestpracces.

First,researchisneededtobeerunderstandthenatureandscaleoftheforthcoming

challengesfacingfossilfuel–dependenteconomies.Fiscalrisksareonekeyexample.Thelossof

dominantindustriescancreatedownwardspiralsoferodinglocaltaxbasesandincreased

di?cultyraisingpublicfunds(15,40),degradingthepuservicesthatarevitaltofuture

economicdevelopmentandcommunitywelbeing.Insil-fuel-richstatesthatlackincome

taxes(e.g.,TexasandWyoming)orbroad-basedtaxesaltogether(e.g.,Alaska),balancingstate

budgetswithoutnewpublic?nancestructuresmayrquirescalingbackessenalservices.

Moreworkisalsoneededtobeercharacterizethechallengesfacedbyfossilfuelworkers,

includingassessingthetransferabilityoftheirexperseandskillstoneweconomicsectors

(41,42).Researcherscanalsocharacterizethecostsandbene?tsofdecommissioningfossilfuel

infrastructure,thescaleandcharofsocialsafetynetsupportsthatmaybeneeded,and

muchmore.

Abeerunderstandingofthseissueswillenableresearcherstoevaluatestrategiestobuild

economicresilienceinfossilfuel–dependentregions.TheraofnewprogramsintheUnited

Statesandaroundtheworldo?eropportuniesforscholarstodrawinsightsfrompolicy

successesandfailureWithouttheabilitytoconductrandomizedcontrolledtrials—typically

thegoldstandardfoishingcausaonbetweenpoliciesandoutcomes—scholarscanuse

casestudyandquasi-erimentalapproachestoassessthee?ecvenessofpoliciestosupport

theseeconomandtheirpotenaltoscaleup.Exisngprograms,whichlargelyfocuson

deployingcleaenergytechnologiesandtheirsupplychains,shouldenableresearchersto

assessthedegreetowhichtheseindustriescano?erhigh-qualityemploymentopportuniesto

transioningwokersandcommuniesandalsothelimitaonsofsuchstrategies.Researchon

howtheseprogramsin?uencepublicperceponsofthegovernmentandtheenergytransion

maybevaluableindesigningmoredurablepolicystrategies.

Researchcanalsodrawlessonsfromdi?erentmesandplaces.Thechallengeoftransforming

ewrld’senergysystemisunprecedented,sohistoryprovidesnoperfectanaloguefor

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guidance.Yet,arobustliteratureexistsontheeconomicandgovernancerisksfacedbynatural-

resource-dependenteconomies(43),alongwithagrowingbodyofworkthatassessesthe

consequencesofmajoreconomicshocksandpoliciesdesignedtomigatethem(16,.

Governmentshavelongexperimentedwithplace-basedeconomicpolicies,includingal

e?orts,suchastheTennesseeValleyAuthority,AppalachianRegionalCommission,andGf

OpportunityZones(46–48).Otherpolicies,suchasEmpowermentZonesandtheNewMarkets

TaxCredit,havetargetedselectcommuniesspreadacrossthecountry(49,50).Outsideofthe

UnitedStates,governmentsinEurope,theMiddleEast,andelsewherearepursuinge?ortsto

supportfossilfuel–dependentregionsandboosteconomicresilience(51,52).Insightsfromeach

oftheseexperiencesmaybeapplicabletothecontemporarymoment,whetheascreave

soluonsorcauonarytales.

Eventhebest-designedstrategieswillfailwithoutsu?cientdesireandcapacityforsuccessful

implementaon,especiallyatthelocallevels,whereadministravelimitaonsmaybemost

acute(53,54).Scholarshipshouldthereforefocusonnotonlytheresourcesorincenve

providedtoeconomicactorsbutalsothemoste?ecvestructuresforimplemenngdurable

andinclusivestrategies.

Becausefossilfuel–dependentcommuniesacrosstheitedStates(andmanymorearound

theworld)di?erbygeographic,socioeconomic,policandotherfactors,aone-size-?ts-all

policyapproachisunlikelytosucceed,andpolicyassessmentsmaynotgeneralizefromone

placetoanother.Instead,successfulstrategiesandassessmentswillneedtounderstandthe

relevantpolicycontexts,thenassessstrategiestatcancatertothe?nancialandtechnical

resources,alongwiththelocalstrengthsandprioriesofa?ectedcommunies;researchers

shouldseektounderstandtheselocalprioriesratherthanimposing“top-down”visions

(29,55).Achievingthesegoalswillrequirestrongesbetweentheacademicandpraconer

communies,includingpolicyenentfromscholarsandtransparencyfrompolicymakers.

Today’sScholarshipCanInforFuturePolicyDesign

Evenarapidtransiontoanet-zeroemissionsenergysystemwilllikelytakedecades.Speed

mustremainaprioritygiventhedangersposedtosocietybytheconnuedemissionsof

greenhousegasesantherpollutants.Yet,thesedecadeswillprovidemetodevelop

strategies,learnfrokesandsuccesses,andadaptpolicytosupportfossilfuel–

dependentcommuniThisprocessoflearningandadapngwillrequireconnuedaenon

fromthescholy,philanthropic,government,andNGOcommuniesfordecadestocome.

Majornewe?otsfromeachofthesegroupsareneededtoensurethattheenergytransion

doesnotleavebehindthepeopleandplacesthathavepoweredtheUSandglobaleconomyfor

morethanacenury.

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