In this issue

The best way to predict the future is to create it.

– Abraham Lincoln

Under the radar for many, and most recently obscured by the ravages of Covid-19, the landscape for future jobs may be dramatically improving for the long term. 

Green and sustainably oriented companies are not only delivering on their ESG mandate, but other tangible dividends are providing a shot in the arm for the American worker and the communities that sorely need new purpose. We can see now how the promise of a new infrastructure for a new age goes way beyond merely saving the planet.

According to the U.S. Bureau of Labor Statistics (9/20) two of the three fastest growing occupations projected over the next 10 years are jobs that didn’t even exist not too long ago:

#1 – Wind Turbine Service Technicians; and

#3 – Solar Photovoltaic Installers

(Nurse practitioners was #2)

Jobs like these in sustainably oriented companies now represent a powerful new resource for the middle class, with both white and blue-collar standing to benefit, mostly with good pay and benefits. And just in time, as jobs are being lost in the traditional energy sector due to technology and mechanical advancements. And investors who are lining up are winning as well.

In this issue of the Socially Inspired Investor (SII) we continue to focus on how the nature of Work and Jobs is changing. In our Podcast his month our host Pat O’Neil talks with Yana Kravtsova, Executive Vice President, Communication, Public and Environmental Affairs at Enviva LP., a leader in alternative energy producing wood pellets. Enviva is an example of a company that is providing new jobs, retraining opportunities and even conversions of old coal-based power plants. 

The Spotlight on section poses the question to leaders in the ESG Investing community, “How is the nature of work changing as companies move toward a more socially and environmentally sustainable world? “, and our Basic Investing section continues to build your foundation.

We wish you a happy and healthy New Year. 

How is the nature of work changing as companies move toward a more socially and environmentally sustainable world?

We reached out to leading experts in the ESG investing industry to find out their responses, and this is what we found…

QUESTIONHow is the nature of work changing as companies move toward a more socially and environmentally sustainable world?

ANSWERChristina Shim, Managing Director, Commercial Innovation Practice, Americas at Palladium: Make it Possible

ANSWERIt is impossible to untangle this with the changes we’ve all experienced as a result of the pandemic. The nature of ‘what’ work is vs ‘how’ work is accomplished has fundamentally shifted in the past 10 months. As companies continue to evolve towards sustainability progress for trends and reasons beyond Covid, the essential mandate of their business and model is slowly forced to adapt as well. This includes the need to integrate greater diversity and inclusion in the workforce. It includes understanding and creating transparency and traceability in supply chain. At its essence, it’s about embedding sustainability – financial, social, environmental – all into the core of the company’s strategy and operations. This is no longer a nice to have – it’s a must have.  

QUESTIONHow is the nature of work changing as companies move toward a more socially and environmentally sustainable world?

ANSWERRabo Garba, Senior Consultant at Ernst & Young

ANSWEREvents of 2020 accelerated trends in sustainability and technology adoption. Companies and individuals seem to have a greater focus on systemic issues that affect society and the environment. Demand is developing for individuals that understand complex supply chains and can identify innovative business models, partnerships, and technology applications to extend decarbonization efforts beyond a company’s operations. Manipulating and understanding large data sets is critical and must be combined with new insights to solve structural problems created by our current systems.

ANSWER(These remarks are solely my own. Not representative of my employer or any other affiliated institution or organization)

QUESTIONHow is the nature of work changing as companies move toward a more socially and environmentally sustainable world?

ANSWERPaul Ellis, Sustainable Finance Consultant & Host of The Sustainable Finance Podcast 

ANSWERThe COVID-19 pandemic has exposed the changing nature of work in the U.S. economy as a physical and transition Climate Risk with far-reaching social and financial implications. Front-line healthcare and service workers are at significantly higher physical risk while earning less for their labor than those of us in WFH jobs with more flexible childcare and family care options. Many public/private sector companies are struggling to retain experienced staff, with some better prepared than others to meet these challenges. In 2020 the pandemic has sent a “loud and clear” message regarding the need for more and better public/private policy partnerships regarding the nature of work if we want to “Build Back Better”.      

QUESTIONHow is the nature of work changing as companies move toward a more socially and environmentally sustainable world?

ANSWERDoug Willmore, Chief Executive Officer – World Tree

ANSWERAt World Tree, we have found that our mission and values have become more important than ever. We have many potential employees that search us out specifically because of what we do and how we are doing it. Finally, I think the rest of the world is moving to what World Tree has been for many years – a virtual company. While we have an office in LA, almost all of our employees work virtually around the hemisphere. Being able to live wherever they want, work wherever they want, and not having to commute is a huge attraction to current and potential employees.

Renewable Energy Job Boom Creates Economic Opportunity As Coal Industry Slumps

Originally published 4.22.19

Renewable energy jobs are booming across America, creating stable and high-wage employment for blue-collar workers in some of the country’s most fossil fuel-heavy states, just as the coal industry is poised for another downturn.

Economics are driving both sides of this equation: Building new renewable energy is cheaper than running existing coal plants and prices get cheaper every year. By 2025, almost every existing coal plant in the United States will cost more to operate than building replacement wind and solar within 35 miles of each plant.

Multiple states and utilities are setting 100% clean energy goals, creating new demand for workers to build solar panels and wind turbines. Planning for the inevitable coal-to-clean economic transition can create new economic opportunities in every corner of the country – and some forward-thinking policymakers are already heeding this lesson.

Engineers and technicians lower the rotor and blades off of the turbine at NREL’s National Wind… [+]DENNIS SCHROEDER/NATIONAL RENEWABLE ENERGY LABORATORY

Fast-growing renewable energy jobs offer higher wages

The renewable energy industry has become a major U.S. employer. E2’s recent Clean Jobs America report found nearly 3.3 million Americans working in clean energy – outnumbering fossil fuel workers by 3-to-1. Nearly 335,000 people work in the solar industry and more than 111,000 work in the wind industry, compared to 211,000 working in coal mining or other fossil fuel extraction. Clean energy employment grew 3.6% in 2018, adding 110,000 net new jobs (4.2% of all jobs added nationally in 2018), and employers expect 6% job growth in 2019.

E2 reports the fastest-growing jobs across 12 states were in renewable energy during 2018, and renewable energy is already the fastest-growing source of new U.S. electricity generation, leading the U.S. Bureau of Labor Statistics to forecast America’s two fastest-growing jobs through 2026 will be solar installer (105% growth) and wind technician (96% growth).

Green jobs grow in red states

But the best aspect of renewable energy job growth is that it doesn’t matter how states voted in the last election. The American Wind Energy Association identifies wind farms and manufacturing facilities in all 50 states and 69% of congressional districts (78% of GOP districts, 62% of Democratic districts) paying more than $1 billion in state/local taxes and landowner leases, and supporting 24,000 manufacturing or supply chain jobs across 42 states.

Congressional districts with operational wind projects and wind manufacturing facilities

Congressional districts with operational wind projects and wind manufacturing facilitiesAMERICAN WIND ENERGY ASSOCIATION

The Solar Foundation reports solar jobs increased in 29 states during 2018 with more than 20% job growth in Alabama, Alaska, Florida, Illinois, Kansas, Montana, North Dakota, and Wyoming. While solar jobs fell 3% nationally due to Trump administration panel import tariffs, the solar industry added nearly 150,000 news jobs since 2010 and expects employment to increase 7% in 2019.

2018 solar jobs growth by state

2018 solar jobs growth by stateTHE SOLAR FOUNDATION

Coal jobs headed for another slump

Meanwhile, the Trump administration’s efforts helped coal mining jobs rebound to 52,000 in 2018, after falling from 86,000 in 2009 to 50,000 at the start of 2017. This is welcome news for the workers and communities that depend upon coal mining, but underlying data indicate this may be a short-lived respite.

U.S. coal consumption fell 4% in 2018 to its lowest point in 39 years due to accelerating coal plant closures and reduced coal plant utilization. The electric power sector represented 93% of total U.S. coal consumption from 2007 to 2018, but over that period 68 GW of coal-fired generation (out of 313 GW in 2007) retired, capped by 13 GW of retirements in 2018.

As a result, U.S. coal production – and the mining jobs depending on it – declined from 1,145 million tons in 2007 to 756 million tons in 2018. The production downswing isn’t going away: The U.S. Energy Information Administration (EIA) reports U.S. production is down 8.4% so far in 2019, and forecasts output will fall 72 million tons in 2019 and 44 million tons in 2020.

Coal mining’s one bright spot has been exports, which increased since Trump took office on increased overseas demand, buoying employment. But EIA reports exports began falling in the second half of 2018 and forecasts exports will fall 8% in 2019 as international prices remain well below the mark required for U.S. coal to be competitive globally.

Even Wyoming’s Powder River Basin (PRB), the country’s largest coal-producing region, is facing this new reality. The PRB has produced 400 million tons of coal annually, but could see output fall to 175 million tons within 10 years, risking 13,000 coal-dependent jobs. Coal’s headwinds led Moody’s Investor Service to forecast long-term decline for the region’s economy, and the state’s largest newspaper urged lawmakers to prepare for coal’s downturn and “pivot our state’s economy away from this volatile industry.”

Job growth from green energy even in the reddest states

Fortunately, the coal-to-clean transition is creating opportunities to replace lost jobs and cut consumer costs while expanding the tax base in coal-dependent communities – if policymakers embrace the “coal cost crossover.”

In 2018, simply running 74% of existing U.S. coal-fired generation cost more than replacing those plants with new wind or solar generation within 35 miles. As solar and wind prices keep falling, that number will jump to 86% by 2025, even as federal renewable energy tax credits phase out.

Cost of operating existing coal-fired power plants compared with building new wind or solar within... [+] 35 miles, 2018-2025

Cost of operating existing coal-fired power plants compared with building new wind or solar within… [+]ENERGY INNOVATION/VIBRANT CLEAN ENERGY

While renewables jobs can’t directly replace every coal job, expanding wind and solar demand is creating new economic transition opportunities for coal power plant and mine workers along with communities in which they live.

Clean energy jobs offer higher wages than the national average, and are widely available to workers without college degrees, according to new Brookings Institution research. Landing a clean energy job can equal an 8%-19% increase in income, and 45% of all workers in clean energy production (e.g. electricians, installers, repairers, and power plant operators) have only a high school diploma, while still receiving higher wages than similarly educated peers in other industries.

Mean hourly wages by clean energy economy sector, 2016

Mean hourly wages by clean energy economy sector, 2016THE BROOKINGS INSTITUTION

This economic evolution is coming into focus for many of the country’s most coal-dependent communities. Wind now provides a quarter or more of total electricity in five Great Plains states  and is one of the cheapest new generation options across most of the central U.S. – including the PRB, where America’s largest wind farm is under development with $5 billion in new potential investment.  Wind will also be cost-competitive and offer employment opportunities across the country’s second and third largest coal-producing regions, the Appalachian and Illinois Basins, by 2025.

Map of the levelized cost of energy for U.S. wind projects in 2018 using VCE dataset

Map of the levelized cost of energy for U.S. wind projects in 2018 using VCE datasetENERGY INNOVATION/VIBRANT CLEAN ENERGY

But renewable energy’s job-creation potential is most acute with solar, which will be cost-competitive across most of the U.S. by 2025. This means solar installations could save money and create jobs that don’t require advanced degrees in most coal-dependent communities.

Map of the levelized cost of energy for U.S. solar photovoltaic projects from 2018 to 2025 using VCE... [+] dataset

Map of the levelized cost of energy for U.S. solar photovoltaic projects from 2018 to 2025 using VCE… [+]ENERGY INNOVATION/VIBRANT CLEAN ENERGY

Starting the coal-to-clean economic transition

Any coal plant that costs more than new renewables and any coal mine depending upon plants in danger of closing should be a wake-up call for policymakers that an opportunity for productive transition exists in their region.

Several states are responding with smart policy, including coal securitization legislation signed into law in New Mexico and introduced in Colorado’s state legislature to help utilities retire uneconomic coal generation and begin economic transitions in coal-dependent communities.

Solar is particularly well-suited for closed coal mines or contaminated land. Federal funds are “re-energizing” a former Virginia coal mine into a solar farm to power nearby data centers, while Washington state’s largest coal mine and an adjacent coal-fired power plant slated to close by 2025 are being converted to solar.

Existing grid infrastructure at closed coal plants makes them particularly attractive for new renewables. In Massachusetts, one closed coal plant is being converted into a solar-plus-storage facility, while another is becoming a hub for the booming offshore wind market. And in Illinois, legislation has been introduced to convert uneconomic coal plants into solar-plus-storage facilities.

Building stronger communities by going all-in on clean energy jobs

Doubling down on coal is a bad economic bet, and while industry job losses have recently stabilized, they’re about to fall once again – perhaps for good. By artificially propping up uneconomic power plants or the mines that feed them, policymakers are gambling with coal-dependent communities’ futures.

By comparison, going all-in on clean energy jobs is a much smarter bet for economic growth, especially in coal-dependent regions. By looking honestly at America’s new energy economics, policymakers can up the ante for stronger communities.

The upskilling economy: 7 companies investing millions of dollars in retraining American workers so they can find better jobs

Originally published 11.2.20

  • As the coronavirus pandemic continues, millions of unemployed Americans are likely trying to upskill or reskill themselves (learn additional or new skills) to land in-demand jobs. 
  • By 2022, 54% of all employees will require significant upskilling due to automation and AI, according to the World Economic Forum. 
  • Several companies including JPMorgan, Accenture, and Verizon have already launched million and billion dollar programs to help Americans upskill. 

Within a few short weeks of the onset of the coronavirus pandemic, millions of Americans in sectors like hospitality, retail, and fitness lost their jobs. 

Facing limited job prospects as the pandemic drags on, many people are likely retraining themselves right now, looking for ways to upskill, add new skills, or reskill, retrain themselves in a new area.

Indeed, digital upskilling has increased during the pandemic as millions of Americans look for in-demand jobs, Reuters reported

The pandemic is accelerating the need for workers to upskill, a trend that has been growing for the last several years amid the rise of automation and AI.

In fact, by 2022, 54% of all employees will require significant upskilling, according to the World Economic Forum, which calls the phenomenon “the Fourth Industrial Revolution.” One-quarter of American jobs are at a high risk of automation by 2030, The Brookings Institute reported.

It’s a problem not only for workers, but for employers. 

As JPMorgan CEO Jamie Dimon wrote in a 2019 statement, “The new world of work is about skills, not necessarily degrees. Unfortunately, too many people are stuck in low-skill jobs that have no future and too many businesses cannot find the skilled workers they need.” 

To help prepare Americans for the changing job landscape, and to fill roles in booming sectors, multiple companies have taken it upon themselves to launch programs to upskill and reskill Americans. 

Here are seven firms that have invested large amounts of money in workforce development programs over the past two years.

Earlier this month, Verizon announced a $44 million upskilling program.

The telecommunications giant is rolling out a plan to help Americans impacted by the coronavirus land in-demand jobs. 

People who are Black or Latinx (a gender-neutral alternative to Latino or Latina), unemployed, or without a four-year-degree will be given priority admissions into the program that will train students to get jobs like junior cloud practitioner, junior web developer, IT help desk technician, and digital marketing analyst. 

In June, Bank of America announced a $1 billion commitment to help combat racial injustice, which included a program to upskill and reskill thousands of Americans.

The financial institution will be partnering with high schools and community colleges to train young adults for in-demand jobs. 

In Sept. 2019, PwC announced a $3 billion commitment to upskill all 275,000 of its employees.

“If you opt in, OK, we will not leave you behind. I can’t guarantee you the specific job that you have or want to have. But I can guarantee you you’re going to have employment here,” PwC global chairman Bob Moritz told Business Insider

In July 2019, Amazon announced a $700 million investment to retrain one third of its US workforce.

The retail giant announced it will help employees in non-technical roles, such as warehouse associates, to move into more technical IT roles. 

In June 2019, Accenture said it would be spending nearly $1 billion each year to retrain its workers.

The professional services firm committed to retrain nearly every worker at risk of losing a job to automation, using a large portion of the nearly $1 billion the firm spends on training each year, The Wall Street Journal reported.

In March 2019, JPMorgan announced a $350 million upskilling initiative.

The 2019 announcement builds on the financial firm’s original $250 million commitment made to upskilling in 2013. 

“Preparing America’s workforce to meet the demands of a changing economy is both an ambitious and an urgent challenge,” Jennie Sparandara, head of workforce initiatives at JPMorgan Chase said in a statement.

In March 2018, AT&T invested $1 billion to retrain nearly half of its workforce.

The telecommunications provider started a massive retraining effort, called Future Ready, after discovering that nearly half of its 250,000 employees lacked the skills needed to keep the company competitive, CNBC reported.

Post Covid-19 Lessons For A More Sustainable World

There has been discussion for many years about how the nature of work would change as companies moved toward a more socially and environmentally sustainable world. Yet, year after year, frankly little changed. Then the Covid-19 pandemic hit. To help fight the pandemic, for most of 2020, employees around the world have been forced to work remotely and many ideas surrounding the nature of work have been revised.

Now that access to a vaccine is imminent, we will soon emerge from our home offices and have a great opportunity to take a major step forward re-envisioning how we conduct our work.

Surprise, remote work – works:

Long commutes, dense traffic, and smog are not particularly sustainable but until now we did not think we had an alternative. According to Owl Labs, a firm that tracks remote work, prior to the pandemic 44% of global companies did not permit any remote work whatsoever. Now those same companies have found ways to remain productive remotely, and many will choose to permit greater remote work going forward. Video conferencing will become a standard practice reducing the need for commuting into a centralized office.

Location is not what it used to be

Since the beginning of civilization, cities have formed to promote and facilitate trade and other commercial activities. This process accelerated during the industrial revolution as businesses became increasingly specialized. With specialization came an increasing need for businesses to locate near other businesses that represented other components of their production or supply chain. Since communications were either in person or via hard copy documentation, collocation made communication and coordination easier and increased efficiency. As a result, large numbers of businesses naturally pooled together in specific geographical areas, thus creating large cities.

This trend continued unabated until technology began to make it possible to easily communicate and coordinate with others over long distances. However, with huge legacy investments in personnel and infrastructure, de-centralization created a fear of disruption and businesses have, until now, been naturally slow to make changes. During Covid-19 however, businesses were forced to learn how to operate remotely, and building on that success, the process of commercial decentralization will likely accelerate. This will ultimately reduce city densities and the noise, light, and heat pollution that goes with them, as well as providing a better quality of life for employees.

We can be more efficient

The personnel management culture of most businesses has long revolved around the notion, originally rooted in the manufacturing process, that everyone shows up at a given time to work together, so the boss can ensure every employee is productive.

However, a few months before the pandemic, Professor Prithwiraj Choudhury, the Lumry Family Associate Professor at Harvard Business School, published a prescient article in the Harvard Business Review on working remotely in which he reported on research he had done which indicated “work output increased by 4.4% after transition to WFA” (Work from Anywhere). Supportive academic work like this, as well as newfound confidence derived from the practical experience of implementing remote work protocols will likely drive an increased adoption of remote work as an accepted practice.

Summary

The lessons learned during the Covid pandemic provide us several useful tools:

  1. Working remotely can be as or more productive,
  2. We can collectively reduce our office building footprint,
  3. We can save travel for key meetings by using video conferencing in lieu of routine meetings.

Hopefully, we can and will ultimately be able to use the lessons learned as a common point of reference for moving toward a more socially and environmentally sustainable world.

Daniel T. Allen

Ensuring a Fair Transition for US Fossil Fuel Workers in Economic Recovery

Originally published 5.19.20

Long before the coronavirus (COVID-19) hit and oil prices collapsed, the U.S. fossil fuel industry and its workers were vulnerable. Threats included increasing cost-competitiveness of renewable energy compared to fossil fuels, investor concerns about financial risks and stranded assets, and a changing policy landscape (at state and local levels at least) seeking to meet decarbonization goals.

The U.S. coal industry in particular entered 2020 as a shadow of what it used to be, with employment its lowest in decades and companies struggling to avoid bankruptcy. The industry has been driven to the brink in the last decade by record low gas prices and steady addition of wind and solar.

Now, with the economy spiraling into recession and millions of people getting laid off, accelerating the transition to a low-carbon, resilient economy while ensuring the transition is fair for fossil fuel workers is more urgent than ever.

The coronavirus outbreak has dampened oil demand as cars, trucks, trains and airplanes sit idle. Despite a recent OPEC agreement to cut production, oil prices have crashed to levels where U.S. shale oil companies cannot make profit and are laying off thousands of workers. Last month U.S. oil prices went into negative territory for the first time. More oil and gas jobs are likely to be lost if prices stay this low for a prolonged period. Similarly, declining electricity demand is further weakening U.S. coal demand, leading Moody’s to forecast significant closures and bankruptcies within the coal industry.

In response to COVID-19, the fossil fuel industry is seeking financial relief as well as deregulation of climate and energy policy. The coal industry, for instance, is requesting relief from taxes that support abandoned mine cleanup and workers suffering from black lung disease. While the fossil fuel industry was left out of the $2.2 trillion phase three stimulus bill, the industry will likely continue making these requests in the next phase of stimulus plans. The Trump administration is mulling a bail out of the oil industry to help it survive a historic drop in prices.

In forthcoming stimulus packages, it would be a mistake to spend federal dollars on fossil fuel assets. This would lock in inefficient and polluting infrastructure for decades and slow down the low-carbon transition at great expense to the planet’s health, its people and the economy. Furthermore, analysts argue that COVID-19 highlights pre-existing malaise in the fossil fuel industry and that the disease’s economic impacts are only going to bring forward peak demand for first coal, and then oil and gas.

This doesn’t mean that all coal mines, oil and gas wells, and fossil-fueled power plants are closing tomorrow. But it creates space for policymakers to start crafting strategies to diversify fossil fuel-based economies and retrain workers for different industries and occupations.

As federal lawmakers race to prepare economic rescue plans, both low-carbon investments and a fair transition for the nation’s fossil fuel workers should be central components. Investment in low-carbon infrastructure and industries can create jobs and boost economic activity at a time when the U.S. economy needs it the most. For instance, every $1 million in spending creates approximately eight full-time-equivalent jobs in energy efficiency and renewables, nearly three times the number of jobs created in fossil fuels.

And strong policies to protect fossil fuel workers and their communities will ensure their livelihoods as we gradually phase out fossil fuel use. Absent such policies, workers are likely to face job losses and falling incomes, while communities will face declining state and local budgets to provide essential services. This will only increase political resistance to the low-carbon transition.

A Fair Transition Framework to Guide U.S. Economic Recovery

Support for fossil fuel workers and communities should cover income, training and relocation for workers facing job loss, as well as transition programs to help diversify economic activity in communities currently reliant on fossil fuels. In developing and implementing these programs, four points should guide federal policymakers to improve justice and equity outcomes.

1. Consider the “megatrends” of automation and digitization.

Automation and digitization are fundamentally reshaping the nature of work and the job market. Increasingly these trends intersect with the low-carbon transition and amplify the disruption in carbon-intensive industries.

The mining industry, for example, has been moving towards automation for many years and this has been one of the factors causing job loss in U.S. coal mining. At just over 50,000 workers, U.S. coal mining hit a new low in 2019 and is expected to contract further this year. Automation has impacted the oil and gas industry too, with technology taking the place of labor in drilling operations and rig management and monitoring.

The low-carbon sector is not going to be immune from the impacts of automation either. Automation and digital technologies are affecting sectors such as transport, buildings and industry, which are major end-users of energy, in ways that reduce energy consumption, increase efficiency, and contribute substantially to climate and environmental protection. These trends can lead to lower labor intensity across the energy system, raising questions about workers and communities dependent on those jobs.

The economic downturn caused by the coronavirus could accelerate automation as employers look to maintain their bottom lines. One study found that 88% of easily automated jobs lost in the United States since the 1980s disappeared within a year of a recession.

Policymakers should take these “megatrends” into account when planning a fair transition and provide adequate safety nets and training opportunities to help workers left behind. One option put forward would require companies receiving public subsidies from state or local governments to conduct technology impact assessments estimating the number of jobs automation might eliminate, the type and number of jobs it would create, and informing a plan to retrain impacted workers. This can help address some of automation’s adverse impact on workers, while preserving automation’s benefits in terms of increasing productivity and cost savings.

2. Plan proactively and include all carbon-intensive industries.

So far, the fair transition conversation has focused on the coal industry, with good reason. An abundance of cheap shale gas and the ascendance of renewables has led to widespread job cuts in the U.S. coal industry. However, what is happening in coal may be a harbinger for other carbon-intensive industries as the low-carbon transition and other global trends pick up.

For instance, the shift to electric vehicles, which require fewer parts and workers to build, is expected to disrupt the auto industry. Already, the abrupt decline in oil demand as COVID-19 forces people to stay home is pushing small oil and gas producers out of business.

Proactive transition planning for industries like oil and gas will provide time for workers to build skills needed to transfer to other industries. Companies, either on their own or as a requirement by the government in exchange for receiving public subsidies, can also shore up pensions and remediation funds while they remain profitable, and policymakers would have time to find ways to pay for transition costs (for instance, by converting fossil fuel subsidies to fair transition funds).

In the near-term, using stimulus money to hire laid off fossil workers to clean up abandoned oil and gas wells and coal ash ponds would be one way to provide local jobs for workers while also addressing a growing environmental problem.

The city of Chicago is also a potential model. In addition to committing to 100% clean energy — similar to a number of other countries, states and cities around the world, including Canada and Colorado — Chicago is developing a fair transition plan identifying strategies, milestones and a timeline for an equitable low-carbon transition. Among other things, Chicago intends to leverage its significant procurement power to invest in companies that hire and retain displaced fossil fuel workers and traditionally marginalized workers to manufacture clean energy infrastructure at a prevailing wage with comprehensive benefits.

3. Ditch the assumption that all fossil fuel workers can find clean energy jobs.

News articles touting how clean energy jobs are surpassing fossil fuel jobs can create the illusion that the low-carbon sector will employ most displaced fossil fuel workers. Clean energy jobs are indeed creating significant economic opportunities. Still, policymakers need to account for differences in skills, geography and even timing when thinking about replacement jobs for displaced fossil fuel workers.

Losses in coal mining jobs are concentrated in West Virginia, Kentucky, Wyoming and Montana. Solar and wind jobs, on the other hand, are concentrated in California, Texas, Florida, Colorado and New York, which collectively account for 45% of the national total.

The wages and quality of low-carbon job opportunities will also be important to transitioning workers. As of now, union representation for fossil fuel workers is higher than for renewable energy workers. This is perhaps not surprising given that the fossil fuel industry has been around a lot longer. In moving to non-unionized workplaces, fossil fuel workers could face lower-paid jobs with fewer benefits or guarantees of working conditions.

Job quality is especially important in today’s political climate, when millions of job losses pressure policymakers to direct stimulus money toward shovel-ready projects that can create immediate jobs.

COVID-19 has highlighted the pitfalls of low-wage jobs that provide no benefits. Policymakers should pass an economic stimulus package that not only delivers a cleaner, more resilient U.S. economy but also provides secure, quality jobs — with living wages, benefits and opportunities for training and advancement.

4. Take bottom-up approaches to investing in communities.

There is no universal blueprint for a fair transition, and what works in one community may not work in another. Given the scope of the challenge, governments at all levels need to engage, but their roles may vary.

The federal government should partner with state and local policymakers to identify locally appropriate priorities for fossil fuel workers and support regionally-led actions. Federal funds and grants should be flexible enough that states and localities can allocate the resources according to their local challenges and needs. The federal government should also incentivize bottom-up solutions driven by partnerships between state and local governments, unions, businesses, and colleges and universities. This will help align education and workforce training with regional and local economic development and with local businesses’ specific needs.

The resulting diverse range of transition programs can further enable communities to share and learn from experiences of both successful transitions and failed experiments to restructuring regional economies.

The existing federal Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) grants give Congressional funding to communities losing coal mining jobs, especially in Appalachia. Projects identified under local and regional economic development plans and collaboratively produced by diverse groups of stakeholders receive priority funding. Congress could consider expanding the POWER initiative beyond the coal industry to other energy industries and regions perceived to be in decline, and adjust the level of funding to match the scale of the challenge.

Any transition is challenging, creating winners and losers. However, a well-managed transition, which includes early planning, broad stakeholder involvement, financial commitment and political will, can mitigate many of the challenges. More importantly, a fair transition for fossil fuel workers can create a more inclusive economy while putting the United States on a path to decarbonization.