What a Federal Just Transition Strategy Should Look Like

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The following is an article written by Jillian Neuberger, legislative engagement associate at the World Resources Institute, and Devashree Saha, a senior associate at WRI.

The United States House of Representatives recently released its legislative response to the climate crisis, the Climate leadership and environmental action for the future (CLEAN) of our nation. While this proposal still has a long way to go before it becomes law, it is the first major climate bill presented to Congress since President Joe Biden took office.

In addition to provisions on climate priorities – including a national emissions reduction target, environmental justice, a clean energy standard and more – the project includes provisions for the transition of workers and communities to an economy. low carbon emission. 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 fair and equitable manner.

Tackling climate change can boost U.S. competitiveness and long-term economic success while spurring growth in new and green sectors. At the same time, it will be important to ensure that workers and communities affected by the low-carbon transition are not left behind.

Although the development of a just transition strategy is a shared obligation between both private actors and the public sector, at local, state and national levels, the federal government has a leadership role to play in defining, funding and coordination of a just transition. After all, the transition to a low-carbon economy is a national, if not a global phenomenon, and the response should be too.

Take stock

We can’t fix a problem that we can’t see. Assessing the scope and nature of the impacts on the workforce and the community of the transition from a high carbon economy to a low carbon economy is an essential first step towards planning for a future. that benefits all Americans.

Discussions around the labor impacts of a clean energy transition often focus on the coal industry, but the impacts are much broader. the Zero carbon action plan for sustainable development solutions found that around 12,000 additional workers in coal mining and related industries will face job losses each year from 2021 to 2030 as coal is phased out; in contrast, around 34,000 workers will lose their jobs each year from 2031 to 2050 as oil and gas are phased out.

Beyond the energy sector, there are a range of carbon-intensive sectors, including transport and industry, that will need to be transformed to meet climate goals. This is further complicated by the fact that the clean energy transition does not happen in a vacuum. Instead, this transition will overlap with other macroeconomic trends that may dislocate workers, such as globalization and automation.

Finally, although it is common to focus on the employment effects of a changing economy, disruptions at the community level will be severe as local tax bases shrink and spending in communities funded by it. fossil fuels are declining.

The CLEAN Future Act would begin to take stock of the transition by forcing 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 affected communities and workers. through the energy transition. The proposed studies would take a broad look at the people likely to be affected by a low-carbon transition in all sectors and geographies and inform federal strategies to effectively manage the change. This research could be based on the Academy’s study on decarbonize the American energy system, which begins to look at the policies associated with a just transition.

Understanding and assessing the full scope of the impacts of the transition will be the basis of future federal programs. The federal government can learn lessons from actions taken by international and subnational actors. For example, both Colorado and Canada have established working groups, composed of experts and stakeholders, to study the challenges posed by the shift away from coal and to propose recommendations for consideration and implementation.

Funding commensurate with the challenge

A successful transition will require significant investments in programs to support communities and workers in the public, private and not-for-profit sectors. The public sector can help workers by providing financial support for training, job search and relocation, as well as temporary “wage differential” benefits if a worker’s new job pays less. Effective strategies for economic development and diversification at the community level will also require time and resources.

Some of these programs and strategies are best executed by the federal government, in order to avoid a mishmash of responses from states. Federal investments for a just transition can be made through existing programs, with increases in federal funding levels. Existing economic development programs for coal communities can be improved to meet the full scope of the necessary transition, including the Coalition Assistance Program of the Economic Development Administration and the Opportunities Partnerships initiative. and the Workforce and Economic Revitalization (POWER) of the Appalachian Regional Commission.

Other programs can be redirected to help workers and communities affected by the energy transition. Modifying and improving the trade adjustment assistance program – which assists workers displaced by foreign trade – to cover displaced energy workers could be one such option. The approach taken by the Obama-era POWER Plus plan, which leveraged existing programs in all agencies to provide support in close partnership with coal mining communities, may be an important model for the just transition efforts of the United States. federal government in the future.

Right now, there are too many variables to say with certainty how much just transition programs would cost the federal government. But the work done by University of Massachusetts-Amherst Institute for Political Economy Researchsuggests that the total cost would be modest: $ 600 million per year to support workers and communities dependent on fossil fuels. In addition, effectively planning a just transition now could significantly reduce the long-term costs of the transition.

The CLEAN Future Act is a first step in laying the foundations for financing a just and equitable transition. The bill would establish a program that could provide eligible local governments with grants to plan for the transition, followed by annual decreasing payments to make up for lost local revenues.

Create an effective federal mechanism to ensure a just transition

The current patchwork of federal bridging programs lacks cohesion and coordination, preventing a cohesive federal response and making it harder for communities to access much-needed resources. The White House is well positioned to address this costly inefficiency and coordinate activities across agencies, while leveraging stakeholder expertise and facilitating stakeholder engagement. The CLEAN Future Act adopts this approach by creating an Energy and Economic Transition Office within the President’s executive office to coordinate and implement programming. The Director of the Bureau is leading an interagency working group to harmonize federal transitional activities.

While the leadership and vision of the federal government is essential, national programming must be designed and implemented in a way that elevates and increases the ambition and resources of state and local actors. Effective solutions will be community driven and built from the ground up. Federal investments must support local economic strategies that build on local and regional assets and that are also transparent and accountable to local communities.

There is precedent for such coordination on transitional issues in the Appalachians. Since 2015, the Appalachian Regional Commission has given more than $ 238 million to communities affected by coal decline through the POWER Initiative. While this program deploys federal funding, it does so in close partnership with affected communities who determine priorities.

The CLEAN Future Act takes this approach. The bill includes mechanisms to facilitate coordination between levels of governance, including community transition centers to support federally supported cities and workers and a stakeholder advisory committee to collaborate with members of the government. the community and other relevant actors.

Finally, while the promise of the CLEAN Future Act and executive action is encouraging and meaningful, a federal mechanism for just transition must be able to survive the current political moment. Changing political winds have derailed transition planning in the past. The Obama administration’s plan to deal with the economic and community impacts of the shift away from coal – the POWER Plus plan – was never fully realized, in part due to a change in administration.

Building a prosperous and just future and tackling climate change in a way that considers all communities requires immediate actions that will lead to quick benefits so obvious that policies can transcend political terms.

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