Energy

Embracing Renewable Energy for Sustainable Job Growth in West Virginia
Jingpeng Shao
Brown University
Author
 
Anna Corradi
Phillip Squires
Elizabeth Yeh
Editors
Spring 2018

Examining the intersection of climate change and rise of populism in West Virginia, this essay evaluates policies and represents recommendations to address the demand for quality jobs and long-term transition towards sustainable energy.

Introduction

 

The dependency on coal for energy generation lies at the intersection of two crucial issues that have come to define international political economy in the 21st Century–climate change and the rise of populism–thus illustrating the deep dissatisfaction with economic liberalization and globalization. In the US, coal lost its position as the dominant source of electricity generation for the first time in 2016 (30.4%) when it was surpassed by natural gas (33.8%) (EIA, 2017). This has contributed to a long-term trend of decline in coal employment, which began after the end of the Second World War and created a substantial source of economic, social, and political woes for the mid-Appalachian region known as the ‘Coal Country’. While campaigning for the 2016 presidential election, Donald Trump proclaimed, “We’re going to put the miners back to work,” to a cheering crowd waving “Trump Digs Coal” signs in Charleston, West Virginia (C-Span - Trump, 2016). His landslide success in the state, beating Hillary Clinton’s 26.2% with 67.9% of the popular vote in November 2016, in part reflects the appeal of his vow to end the liberals’ “War on Coal,” which has allegedly destroyed jobs and with them the prosperity of the region. On the same day, West Virginians elected Democrat Jim Justice, who had promised to embrace coal and echoed Trump’s “jobs, jobs, jobs,” as governor. Such rhetoric has two main implications: that West Virginia’s fortunes are tied to coal, and that the decline of coal can be reversed. However, these are only myths and carry no fact-based weight. West Virginia’s economic woes are complex and must be addressed with a multitude of approaches. Instead of viewing renewable energy in a negative light and trying to dismiss it, the state should consider it as a viable source of job creation for the region.

Dismantling the Environmental Protection Agency and related regulations such as the Clean Power Plan, all of which are meant to be combating climate change, is not the panacea when addressing the long-neglected demand for jobs in the region. In fact, it will lead to greater long-term woes with marginal short-term benefits. Instead, policymakers must embrace the shift in energy that is essential for climate change mitigation by transitioning to the sustainable energy sector and by investing in job creation to help people adapt to the movement towards a low-carbon economy. More specifically, instead of resuscitating coal mines and opening coal power plants, West Virginian legislators should first remove regulations that discourage renewable energy, then stimulate the demand for renewable energy and related jobs (such as energy efficiency) (GPO, 2011), and finally invest in (re)training programs to help unemployed (coal) workers. For any policy to be successfully executed, it must respect and understand the values and hardships of the region, as it confronts the two aforementioned myths. Therefore, this paper will begin by examining the two relevant problems in the international political economy: climate change and the rise of populism in the heart of the “Coal Country,” namely West Virginia. Such contextualization will provide the objectives and the evaluation criteria for the policies that will be compared. From those assessments, a set of policies recommendation will be constructed for legislators, with the goal of simultaneously addressing the demand for quality jobs and the long-term need to transition towards sustainable energy.

 

Climate Change and the Clean Power Plan

Climate change is an inherently global problem, one caused by greenhouse gas emissions (carbon dioxide, methane, nitrous oxide, perfluorocarbons, sulfur hexafluoride, and nitrogen trifluoride etc.) emitted across the world. Thus, this phenomenon has global repercussions, such as rising sea levels and more frequent extreme weather events (Tanner and Allouche, 2011). The transition to low-carbon energy, which focuses on limiting greenhouse gas concentrations in the atmosphere (Frankfurt, 2017), is crucial to climate change mitigation. The 2015 Paris Agreement, with the overall objective of restricting the global temperature rise to below 2 degrees Celsius compared to pre-industrial levels, is an important milestone in the international cooperation that is crucial in combating climate change. A successful execution, however, depends entirely on the ability of member nations to stay committed to their reduction promises.

Under President Obama, the US committed to reducing its greenhouse gas emissions by 26-28% below 2005 levels by 2025. The energy sector, accounting for 31% of emissions, is the most influential sector in terms of US greenhouse gas emissions. The Clean Power Plan (CPP) of the Environmental Protection Agency (under section 111(b) of the Clean Air Act) is a key component of this effort, one that encourages the shift towards less polluting sources of energy. However, it is also portrayed as driving the “War on Coal.” To reach the overall goal of 32% reduction (compared to 2005 levels) in carbon dioxide pollution from American power plants, the act stipulates state-specific targets for carbon emission reduction. West Virginia’s target is to reduce carbon dioxide emissions from 72,319 thousand short tons in 2012 to 51,325 thousand short tons (only considering existing sources) or to 51,857 thousand short tons (considering both existing and new sources). That translates into a significant challenge: either a 37% reduction in carbon dioxide emissions per megawatt-hour (“rate-based” target), or a 29% reduction in total emissions from existing sources (a “mass-based” target, which is recommended by the West Virginia Department of Environmental Protection’s Feasibility Report) (Van Nostrand, Hansen, and James, 2016). Under the CPP, each state chooses the combination of compliance measures necessary to achieve the goal, such as improving efficiency of existing power plants (“heat rate improvements” in the case of coal power plants), increasing the use of natural gas, increasing the use of renewable sources (hydropower, wind, solar), and reducing the demand for electricity. Thus, it is essential to focus on how increasing renewable sources of energy can be a possible source of sustainable job creation in West Virginia.

In addition to legal challenges that immediately attempted to halt the enforcement of the Clean Power Plan, the executive order issued by President Trump on March 28, 2017 rolled back on the Obama-era climate change policies, including the CPP. The country was told such action was being taken in the name of energy independence, and the miners were told: “You’re going back to work.”(Davenport and Rubin, 2017) Absolving the US, the second largest carbon dioxide polluter in the world, from their commitment to climate change mitigation threatens to unravel the multilateral agreements in the global fight against climate change. Other countries also had to face a tradeoff between short-term economic development, and finding sustainable climate change solutions. This is particularly true for China and India (the first and third largest polluters), which have been dependent on coal as an inexpensive source of energy for moving their massive populations out of poverty. West Virginia is an example of the challenges faced in transitioning away from coal as a source of energy once the industry and infrastructures are established.

 

Coal Country and Populism

     West Virginia’s coal has helped power the country since the Industrial Revolution, and the resulting period of prosperity bound coal to the regional identity. The dual myth – that the decline of coal is reversible and that coal still determines the prospects of West Virginia – continues to prevail at the heart of the Coal Country. These pervasive notions must be considered when designing and implementing policy that emphasizes a shift away from coal. Patrick Hickey, a political science professor at West Virginia University, reflects on the appealing rhetoric of the War on Coal: “It is political suicide to tell citizens the truth about coal.” (Dlouhy and Natter, 2017)

Since World War II, the coal industry has experienced dramatic transformations that have led to a decreasing demand for labor. For instance, modern extraction techniques, such as “mountaintop-removal mining” and new machinery, have replaced the traditional pickaxes and shovels. Furthermore, coal operators and contractors have decreased from 250,266 in 1979 to 98,505 in 2015 despite steady output of coal (MSHA, 2015).

In the past decade, the rise of cheap natural gas due to hydraulic fracturing (commonly known as “fracking”) has further decreased demand for coal miners. The changing relative prices of coal and natural gas have contributed to this market-driven shift from coal to natural gas. Between 2000 and 2008, natural gas was significantly more expensive than coal. However, with the onslaught of natural gas extracted from shale formations, the gap in prices has narrowed significantly since 2009 (EIA, 2016). Coal was the largest source for electricity generation until 2016, when natural gas (33.8% of US generation share or 1,380,295 gigawatt hours) surpassed coal (30.4% or 1,240,108 gigawatt hours) (EIA, 2017). By contrast, in 2011 natural gas accounted for 24.7% (or 1,013,689 gigawatt hours) and coal accounted for 42.3% (or 1,733,430 gigawatt hours). Because of the long time horizons of power plant construction and retirement (beyond the four year term of one president), these results illustrate the long-term trends in the energy generation industry. The US Energy Information Administration reported that American power companies have retired and converted 13,000 megawatts of coal-power plants, and plan to retire or convert 8,000 megawatts of coal-fired power plants by the end of 2017 (many without regards for recent changes in regulation) (EIA, 2017). This demonstrates how the Clean Power Plan is not, as Trump has argued, the sole or even the biggest culprit for the decline of coal. In fact, the CPP was never meaningfully enacted due to the Supreme Court’s decision to block implementation during the litigation of West Virginia v. EPA (Tsand and Wyatt, 2017). In the absence of real implementation, there is little basis for the argument that CPP has had any direct impact on the decline of coal. In other words, the CPP has been wrongly framed as the culprit of the socioeconomic problems associated with the decline of coal by certain politicians resorting to demagogic rhetoric. The realities of cheap natural gas with decreasing market demand for coal and increasing international support for clean energy cannot be easily reversed.

Furthermore, the demand for coal outside of West Virginia also influences the West Virginian coal industry because it exports a significant amount of the coal it produces; in 2014, around half (50 million short tons) were shipped to other states and around one-third (34 million short tons) were exported internationally (EIA, 2017). Coal has long been the largest commodity the state exports by value: 25.3% (or $1.278 billion) in 2016, despite a 25.8% decrease since 2015 (which is consistent with past years) (US Census, 2017). The decrease can be partially attributed to the weaker international demand, especially from China, where the government is prioritizing and heavily investing in sustainable energy development in addition to cutting back on coal (Frankfurt, 2017). These industry-wide trends contradict the narrative of some politicians blaming job loss primarily on environmental regulations such as the Clean Power Plan.

The second persisting myth is how West Virginia is tied to coal. For the last 25 years, coal has accounted for less than 5% of the state’s workforce (Cohen, 2016). Nevertheless, the cultural symbolism of coal remains incredibly influential and poignant for the community where, “even if you’re not directly connected to the industry, you may know family members or relatives or ancestors who were.” (Dlouhy and Natter, 2017) To West Virginians, the job of a coal miner once signified, and continues to evoke, a stable middle-class yearly income of $85,000 with many benefits. Being a unionized salary, this was the norm for the coal miners of previous generations, under the United Mine Workers of America (Tabuchi, 2017). The widening income inequality within the industry between the executives and the coal workers has also contributed to the sense of loss and nostalgia for the blue-collar workers of ‘Coal Country,’ which is exacerbated by the replacement of unionized long-term contracts with low pay short-term contracts (Tabuchi, 2017). When the middle-class loses the hope and security that accompanies a well-paying long-term job, populism branded with “jobs” swells quickly.

Coal miners and their communities are proud of their heritage and identity, embracing their status as the soldiers powering America. Even an infamous Hillary Clinton quote promoting her $30 billion program for coal workers incorporated praise for coal miners: “Because we're going to put a lot of coal miners and coal companies out of business, right? And we're going to make it clear that we don't want to forget those people. Those people labored in those mines for generations, losing their health, often losing their lives to turn on our lights and power our factories.” (C-Span – Clinton, 2016) Her failed effort to reconcile the declining coal industry with opportunities in the renewable energy sector shows the importance of effectively communicating and convincing not only the coal community, but also blue-collar America, that the coal industry will be supported.

 

Policy Objectives and Criteria

 

For long-term prosperity in West Virginia, policymakers should consider renewable energy as a possible solution in order to simultaneously address the need for climate change mitigation and the demand for sustainable jobs as highlighted by the rise of populism.

Without sufficient job creation, climate change efforts could fail to address the (potentially negative) impact on the greater economy, as pointed out by Dr. David Montgomery’s critique of a PERI study on EPA regulations, during the Senate Committee Hearing on Green Jobs and Trade: “the critical error, epitomized by PERI, and common to all the studies in the genre, is their failure to balance the jobs lost in the rest of the economy against those that may be gained as a result of the specific mandated investments… It ignores the increase in the cost of electricity caused by this policy and the effect of that higher cost on household real incomes, wages, productivity, investment in other sectors and economic growth.” (GPO, 2011) Environmental regulations could force policymakers to choose climate change mitigation over economic needs, which would put additional stress on an already sensitive economic situation.

West Virginia will likely face the same challenge of dependency on a declining fossil-fuel industry (coal today) again in the future if steps towards renewable energy are not taken. Complying with environmental regulations such as the CPP is only the first step towards long term sustainability, as these policies may continue to perpetuate the dependence on relatively cleaner but non-renewable energy sources such as natural gas or “clean coal.” (Van Nostrand, Hansen, and James, 2016) Natural gas has already begun replacing coal across the nation and within West Virginia, as the state’s existing energy infrastructure and geographic location help make natural gas development significantly cheaper than renewable energy development. Still, the fundamental issue of long-term sustainability in energy generation can only be resolved by a shift (however gradual) towards renewable energy by shifting both market dynamics and state policy.

Kate Gordon, the Vice President for Energy Policy at The Center for American Progress Action Fund, presents a strong long-term view: “‘green jobs’ stands for much more than just the jobs themselves. It stands for a whole new set of industries and investments that will make us as a country more competitive and our economy more sustainable in the long term.” (GPO, 2011) Without addressing the constituents’ economic and job demands in West Virginia, which have already contributed to the hopelessness and frustration of the community, populism will continue to rise and undermine the political will to participate in international cooperation for climate change mitigation. Success in creating desirable and sustainable jobs for the disenfranchised blue-collar workers can demonstrate the viability of a low-carbon economy and increase the appeal of combating climate change mitigation.

 

Policy Evaluation and Recommendation

 

Given West Virginia’s status as the fourth largest energy producing state (producing 4.6% of US electricity in 2013), its dependency on coal for generating 94% of that power in 2015, and the greater shift away from coal, there is significant space and potential for sustainable job creation in the renewable energy industry. In neighboring Ohio, which also has a history rooted in coal, there has already been significant progress made in the energy transition. The city of Toledo transformed itself into a center for solar innovation and production, thereby creating over 6,000 jobs (GPO, 2011).

In order for there to be an increase in renewable energy investment, the demand for clean energy must be stimulated. The initial steps can be taken by removing the limits placed on net metering, and by allowing more distributed generation that would incentivize installations for renewable energy generation by individuals. The net metering system for solar energy systems’ owners calculates and charges their net usage of electricity, allowing for the excess electricity that these owners contribute to the grid to partially cancel out the electricity that they consume from the grid in the form of issued credits. Policymakers can work towards re-instituting its renewable portfolio standards by requiring investor-owned electric utilities and large retail suppliers to acquire 25% of electricity from alternative and renewable sources by 2025 (for which it became the first state to repeal in 2015) (EIA, 2017). Tax cuts, subsidies, and even loans and investment (perhaps with a combination of private and public funds) for larger utility-scale renewable energy projects can also be considered. However, measures must be taken to ensure long-term viability and responsible use of taxpayer money, and to confirm that incentives are not distorted. This first component of directly stimulating development in the renewable energy sector was missing in Hillary Clinton’s $30 billion “Plan for Revitalizing Coal Communities,” though it does share a similar recommendation for the following retraining program (Clinton, 2015).

Secondly, West Virginian workers must be empowered to capitalize on job opportunities in growing renewable energy industries. Investing in retraining initiatives will bridge the gap between employers and employees by improving the skills of the overall labor pool. The success of such action is hopeful: on a smaller scale, the Coalfield Development Corporation’s programs have already demonstrated measurable success. They provide retraining to unemployed coal miners in different sectors: for instance, its “ReWire Appalachia” program uses the 33-6-3 model (33 hours of paid labor, 6 hours of higher education class time, and 3 hours of life-skills mentorship), and focuses on community-based solar projects, and could triple the amount of solar power in West Virginia (Coalfield, 2017). The impact of such program on boosting the solar industry and on empowering unemployed coal miners is indicative of a great initiative that should be scaled up with the support of West Virginia legislators. Regarding the criticism of the costliness of job training programs, cost projections can significantly differ depending on implementation (Louie and Pearce, 2016). Collaboration with potential employers in developing training programs with in-demand skills would also boost the effectiveness of the retraining program. This would not necessarily mean that taxpayers are funding training for certain companies, as long as there is a sufficiently large and diverse number of employers.

As West Virginia faces economic challenges and transitional pressures, legislators should consider renewable energy as a potential source of job creation and economic growth. West Virginia has historically been one of the nation’s leaders in energy production. Therefore, rather than relinquish this position as a result of the decline in the coal industry, state officials should understand that fossil fuel sources, such as coal and natural gas, despite their low cost, do not represent the future of energy production and will likely be displaced by renewable energy sources. Thus, investing in clean energy development and retraining programs for present and future unemployed coal workers will allow West Virginia to maintain its status as a key energy producer for the US. However, state leaders must first push back against the dual myths, i.e. that West Virginia’s fortunes are tied to coal and the decline of coal can be reversed, which continually create resistance against alternative sources of energy. Once the myths are properly understood as such, climate change mitigation and the need for sustainable jobs can be transformed into two complementary pieces working together for West Virginia’s benefit. Together, they can create both long-term prosperity and a positive impact on climate change mitigation.

Endnotes


3 The other important is adaptation, which focuses on adjusting to the adverse effects of climate change – especially important given how climate change impacts different regions unequally, often exacerbating preexisting poverty. 4 Granted, the poverty and need for electricity cannot be overlooked.

5 This uses controlled explosions on mountains to expose coal seams.

6 I do not agree with the entirety of his statement and was not able to evaluate the economic models.
7 Multiple variations of “Clean Coal” exist, including the aforementioned “heat rate improvements,” the more recent carbon capture and storage technologies that have pushed some coal companies to support the Paris Agreement.

8 The only source of industry investment funding is private, which could limit the scale at which demand for renewable energy can be stimulated.

 

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