Supporting Energy Transition Workers and Communities

An energy transition that is fair for workers and communities will not happen organically. Working people have too often felt the pain of shifts in technology. We can’t leave workers or communities behind as these changes happen in our economy, which are also the changes necessary to avoid the worst impacts of climate change. Prioritizing and targeting federal resources to workers and communities in places impacted by this shift needs to be a deliberate choice. 

The Inflation Reduction Act provides some of this needed investment, particularly by driving clean energy investments into communities impacted by energy transition. This includes the Energy Communities Credit (referenced in the Clean Energy Jobs section), which provides a bonus tax credit to drive clean energy investments to energy communities where, among other possible metrics, a coal mine or coal-fired power plant has recently closed. Communities are eligible if they are in census tracts in which a coal mine has closed after December 31, 1999; where a coal-fired electric generating unit closed after December 31, 2009;  or a census tract which directly adjoins an impacted census tract.

Additionally, the law provides over $10 billion in financing for rural renewable energy investments through the U.S. Department of Agriculture. The Inflation Reduction Act will also drive clean energy manufacturing alongside these clean energy investments. The law also revives the Section 48C qualified advanced energy property credit with a $4 billion set aside for energy transition communities. This investment will help establish, expand, or retool clean and advanced energy, vehicle, and technology factories in states and regions—like West Virginia, Pennsylvania, and Colorado—that have faced job loss and economic devastation due to plant or mine closures.  

The Inflation Reduction Act also creates a new program within DOE’s Loan Programs Office to help decarbonize and re-use existing energy infrastructure: the Energy Infrastructure Reinvestment (EIR) Program.  Funded at $5 billion, the reinvestment criteria is broad, including nearly any activity lowering emissions—everything from reducing emissions from continuing operations, to fully redeveloping energy facilities for a different economic purpose. If targeted the right way, this financing could support economic redevelopment in communities impacted by energy transition: it explicitly supports local community benefits and the acceleration of land remediation efforts.

In addition to driving needed clean energy and manufacturing investments into these communities, the Inflation Reduction Act permanently extends the Black Lung Excise Tax to maintain the funding that provides critical benefits to miners and families. The Black Lung Excise Tax supports the Black Lung Disability Trust Fund (BLDTF) and is paid by coal companies at the current rate of $0.55/ ton of surface-mined coal, and $1.10/ ton of coal mined underground. The BLDTF pays for medical benefits and provides a small monthly living stipend to coal miners who are disabled by black lung disease, and to their surviving dependents. 

All of these provisions will leverage and build upon investments already made in the BIL. The addition of the clean energy and manufacturing provisions in the Inflation Reduction Act adds to the BIL’s strong focus on environmental remediation and provides funding for clean energy deployment, manufacturing, and economic support for communities impacted by energy transition.

However, some critical support for workers and communities was not included in the Inflation Reduction Act, including funding for dislocated workers, and additional funding for the Economic Development Administration. More must be done to provide meaningful support for workers who have borne and will continue to bear the brunt of job loss in this energy transition: workers dislocated from coal mines, coal power plants, and oil refineries.