For the United States to meet its carbon pollution–free electricity goals by 2030, the country will have to end its reliance on coal and is making progress toward doing so. In the last decade, coal is no longer the US’s primary fuel source for electricity generation and now trails renewables, natural gas, and nuclear. However, the end of coal threatens economic security, employment, and quality of life in thousands of coal-dependent communities across the country. To ensure these communities aren’t left behind from the transition to renewable and other energy sources, prioritizing investments and supports to them is a national necessity.
The 2022 Inflation Reduction Act (IRA) appropriated billions of dollars across numerous federal programs, tax credits, and investments for place-based economic diversification and development assistance in communities affected by the coal industry’s decline. Experts suggest nearly 1 in 7 census tracts could be eligible for IRA assistance because of coal mine closures, and 1 in 10 could be eligible because of coal plant closures.
Because the rollout of IRA dollars will continue throughout this decade, it’s too early to assess the effectiveness of these investments in coal communities. But an earlier competitive grant-based program—the Economic Development Administration’s (EDA’s) Coal Communities Commitment program (CCC)—can inform the IRA’s implementation and support more equitable investments in coal country.
Three insights from the implementation of the Coal Communities Commitment program
Funded to support COVID-19 recovery through the American Rescue Plan Act, the CCC promised to expand opportunities for coal communities by investing in economic diversification, job creation, capital infrastructure, workforce development, and reemployment programs. Since 2021, more than $550 million has been allocated to more than 100 coal community projects, and all awards are now in various stages of implementation.
To assess how equitably CCC money was spent, I compared EDA administrative data on grant awards and beneficiaries with the US Departments of Energy and Agriculture and the Census Bureau data about coal power stations, mines, and community characteristics. My analysis surfaced three insights about investment gaps and capacity challenges many coal communities may face when applying for and implementing federal and philanthropic investments.
Nearly half ($237.8 million) of CCC dollars was disbursed through five Build Back Better Regional Challenge grants to multicounty coalitions for initiative-level, long-term investments. The EDA allocated the remaining funds through their Economic Adjustment Assistance program to support discrete project-level grants.
Three-fourths of these project-level CCC awards went to built capital and related investments in critical infrastructure, with the majority going to water and sewer infrastructure (36 projects), capital projects (17), and road construction (12). Just five awards directly linked project metrics to workforce development activities, and only one project supported long-term, sustainable community financial capital through a revolving loan fund.
Most built infrastructure and capital investment projects went to small, rural counties with fewer than 10,000 people. In contrast, most human capital projects—including technical assistance programs, workforce development initiatives, and long-range research and planning investments—went to counties that are more metropolitan, with more than 50,000 people.
Among counties with a poverty rate of 20 percent or higher from 1989 to 2019—known as persistent poverty counties—where at least one coal plant or mine is located (or counties that closely border a plant or mine in an adjacent county), a large majority did not receive a CCC award (77 percent).
Rural and persistent poverty communities need investments in capacity building
The rollout of project-level CCC dollars through the Economic Adjustment Assistance program—EDA’s most flexible funding program—comports with expert recommendations for greater community flexibility to use funding for a broad range of locally defined needs. Yet still, most of the smallest rural awardees used the CCC to address basic infrastructure challenges, and most coal regions experiencing persistent poverty received no CCC investments at all.
This disparity is likely because of capacity and technical expertise gaps that make strategic project planning and onerous federal application requirements prohibitively difficult for many rural communities. Even with significant program flexibility, transformational human capital and planning investments are out of reach for many of the smallest and poorest places that are beset with long-standing basic critical infrastructure challenges, as other Urban research has found. Worse, the true need among the least resourced and lowest capacity communities is yet unknown, as most lack the resources to competitively apply for federal investments at all.
If the least resourced coal communities don’t have the capacity to access the investments they need the most, the promise of a just transition will fail. Currently, some funders do target on-ramp supports to low-capacity communities with assistance to become more competitive for funding applications—such as the Just Transition Fund’s Federal Access Center, the Southwestern Pennsylvania Municipal Project Hub, and the Environmental Protection Agency’s Promoting Readiness and Enhancing Proficiency to Advance Reporting and Data and Thriving Communities Technical Assistance Center programs. These investments are vital, but much more is needed. For the least resourced communities experiencing persistent decline, economic development experts recommend sustained capacity building and direct revenue infusions for at least 10 years (PDF).
Despite historic federal funding to support a just transition for coal and other energy communities, there still lacks a strong mandate for broad, visionary research and evaluation strategies to build a robust evidence base about what works. This base must also include insights about the contexts and needs in “counterfactual” communities that are unsuccessful with their applications or lack capacity and resources to develop them at all, as well as generalities among the few rural and low-capacity places that successfully secure and implement these funds.
Policy-relevant, actionable research is urgently needed to build this evidence base. As IRA and philanthropic investments continue to roll out, federal policymakers and philanthropic funders should consider these insights from the Coal Communities Commitment program to inform more equitable investments in coal country.
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