As the United States pursues a transition away from coal toward more sustainable energy sources, many workers will be displaced, potentially facing economic and social devastation. To minimize these effects, the United States must pursue a just transition from coal, one that protects coal-reliant individuals and communities as the economy shifts toward more sustainable means of energy production.
Due to a combination of economic and political forces, a transition away from coal (whether just or not) is already underway in the United States. According to the World Bank, the country’s coal mining employment has been on the decline for a century, falling from approximately 800,000 workers in 1919 to fewer than 50,000 by 2021. According to the U.S. Department of Energy’s 2022 Energy and Employment Report, coal electricity employed just under 71,000 workers in 2021, approximately 9,000 fewer than were employed in 2019. Energy sources such as natural gas and renewables are increasingly meeting the United States’ needs, replacing the market for coal. In a recent open letter to a constituent, West Virginia Senator Joe Manchin conceded that “despite our best efforts to the contrary, the [coal] industry has consistently declined under both Democratic and Republican administrations. Even President Trump, who promised to bring back all the coal jobs, could not stop the decline.”
As the industry has decayed, coal regions have nearly universally experienced negative economic outcomes, including sustained economic dislocation, high unemployment, declines in household income, and worsening measures of community well-being.
The decline in coal industry employment is not unique to the United States. In the past decade, approximately 2 million coal mining jobs have been eliminated globally. As other countries have navigated this transition, their strategies can help inform domestic policy in the United States.
Germany’s Ruhr region was once the economic pillar of West Germany due in large part to its production of hard coal. By 2018, coal production had fully stopped in the region.
This government-led transition was initially met by fierce resistance from mining companies, politicians, and unions. After experiencing opposition to federally implemented development projects, the German government shifted its approach to a more participatory model, prioritizing coordination between policies on the national, state, and regional levels and allowing cities to develop their own local development strategies. This approach proved to be immensely successful.
In the Ruhr, redevelopment focused on physical regeneration and education infrastructure. In 1965, the region did not have a single university; by 2014, it was home to 22 universities serving over 250,000 students. Higher education enhanced the attractiveness of the region and allowed residents to adapt to new labor market conditions.
The region also focused on the redevelopment of former industrial sites. One former mine complex was converted into a memorial, earning it a spot on the UNESCO World Heritage List. These programs transformed former industrial spaces into landmarks and cultural sites, conserving the mining heritage of the region while signaling a shift away from the economy of the past. This change in regional identity led to an increase in a new industry: tourism. International tourism in the region nearly doubled between 1990 and 2012.
The government acknowledged the disproportionate burdens the transition placed on the mining communities, granting workers generous social security and long-term welfare benefits. In the late 1980s, a government-backed roundtable developed customized individual reemployment strategies for each affected worker. Early retirement was available for those who had worked as miners for 25 years or more, while those with fewer years in the industry were guaranteed alternative employment.
Another important aspect of the Ruhr’s transition was its focus on transportation systems. Prior to transition, the urban structures of the Ruhr area were concentrated around mining activities with insufficient transport infrastructure for commuting outside of each individual city. As the Ruhr region developed its transit infrastructure, it benefitted from its central European location and established a strong logistics sector along with improved connectivity for displaced workers.
The Polish transition was not motivated by environment ideals, but rather by economic necessity. After the fall of the Soviet Union, Poland began pursuing a policy of reducing coal mining employment and closing unprofitable mines.
In 1993, Poland introduced social protection instruments for displaced coal miners. Early retirement was available to underground mine workers who were near retirement age and provided the equivalent of 50 percent of the displaced miners’ salaries for up to three years in either monthly installments or a single lump-sum payment. For those ineligible for early retirement, voluntary redundancy benefits were available in monthly payments for a maximum of two years. In 1998, the government created “golden handshakes,” a single lump-sum payment available to miners with five years of work experience.
Unfortunately, lump sum payments were unsuccessful in creating long-term economic stability for recipients. After leaving mining, many households of beneficiaries who received lump-sum payments were in a worse economic situation than they had been when working in the mines. By the time of a 2004 survey, nearly 30 percent of lump-sum beneficiary households stated that they were “able to only meet their most basic needs.”
Historically, coal mining was a core economic driver of the United Kingdom, at one point employing over 10 percent of the male working population of coalfield regions. These regions relied on a small number of large coal companies to provide jobs.
To address the need for new businesses and entrepreneurship as mines closed, the government established the Regional Growth Fund to provide no-interest loans to entrepreneurs and employers through a combination of public and private funds. By 2015, five years into its implementation, the program had created or saved 141,000 jobs for an average cost of £11,000 per job.
The government also developed the National Coalfields Program, which redeveloped abandoned and contaminated coal mining sites into residential and commercial space. By the conclusion of the program, it had successfully remediated 107 sites. The Sheffield Advanced Manufacturing Park, a new technology and innovation hub, is one example that succeeded in diversifying the local economy.
These programs, while successful, came too late for many of the individuals affected by mine closures (many of the transition policies directed at coalfield communities came 15 years after pit closures). Additionally, while the United Kingdom did provide some compensation to directly affected workers, those payments did not address the ripple effects of industry shifts on coalfield communities at large.
The bulk of just transition action in the United States has been at the state level. Colorado and New Mexico each launched statutory just transition initiatives in 2019. New York assembled a Just Transition Working Group in 2020 and earlier this year, West Virginia’s legislature established a grant institution that will support retraining for miners as well as the creation of recreation facilities.
However, many of the most coal-reliant states have failed to support their residents in the transition from coal. The World Bank found that only four counties in the Appalachian region had managed to sustain economic viability and sustained population growth through the transition from coal.
There is a need for a cohesive federal just transition framework that allows for state- and local-level input and program design. The experiences of Germany, Poland, and the United Kingdom can help inform these policies.
First, support and redevelopment programs must precede or coincide with coal facility closures to be effective. In the United Kingdom, support came too late for many individual workers.
Second, financial support for individual workers is best given in long-term installment payments rather than a lump sum. In Poland, lump sum payments failed to establish lasting economic security for displaced workers and their families.
Third, compensation and retraining for individual workers are both incredibly important, and must be accompanied by community-wide economic transformation. In the Ruhr, this transformation included a new focus on higher education institutions and tourism with a focus on the region’s coal mining history.
Fourth, leaders should emphasize the reality of economic forces leading to the decline of coal, rather than environmental restrictions. One study found that community resistance to transitions is more common when populations blame environmental regulation rather than markets and price competition from alternative energy sources such as natural gas.
Finally, a successful just transition should include federal funding and input from a variety of stakeholders, including workers, employers, and community leaders. Germany’s transition from coal encountered fierce resistance until the government adopted a polycentric approach that allowed local government influence and equal voices for workers and companies.
While the United States is unique, its challenges in ensuring a just transition from coal are not. The experiences of other countries as they’ve navigated the change can prevent the United States from making similar mistakes and allow it to replicate successes.
