Policy Options to Enable an Equitable Energy Transition

Daniel Raimi, Resources for the FutureAs the United States undergoes an unprecedented shift away from carbon-intensive energy sources and towards a clean energy future, federal policy will play a major role in supporting workers and regions that are affected, including low-income, rural, and minority communities. The transition to clean energy will have particularly significant implications for people and places where coal, oil, and natural gas serve as a major driver of jobs and economic activity, and where consumers may be especially burdened by changes in the energy system.This report lays out a variety of proposals to help enable an equitable energy transition. It is not intended to be a comprehensive strategy, but instead offers a menu of options that policymakers can choose among to enable this transition while enhancing energy equity and resilience, reducing environmental damages, spurring clean energy innovation, and supporting economic and workforce development in vulnerable communities.To download and read the full report, including references, please click "Download" above.1.1 Key PrinciplesIn the weeks, months, and years ahead, policymakers in the United States and around the world will make decisions about which policies to implement to support an equitable energy transition. The following principles will be essential to guide any successful transition strategy, regardless of the specific policies that are ultimately chosen:There is no silver bullet or one-size-fits-all solution. Because of the required scale and speed of the energy transition, multiple policy types will be needed to adequately support communities affected by a shift away from coal, oil, and natural gas. What’s more, affected communities differ widely in their histories, demographics, geographies, politics, and more. As a result, the federal government will need to use different tools in different contexts: the solutions that make sense for coal mining communities in Appalachia will differ from those in southwestern oil communities, low-income rural communities, environmental justice communities, and others.Two-way engagement with communities and intergovernmental coordination will be critical. Because solutions will vary widely, and because local stakeholders have the best understanding of what their communities need, federal policy must engage early and often with local leaders, businesses, civil society, and other stakeholders. This engagement will need to be a true dialogue, where federal policy is guided by local priorities, and local stakeholders in turn have a clear understanding of federal capabilities. In addition, deep and consistent engagement with local communities will be essential to overcome any distrust that stakeholders may feel toward federal intervention. To accomplish this crucial task, the federal government will need to coordinate across multiple agencies and with local, state, and tribal governments. Multiple options exist for structuring this engagement, but regardless of the mechanisms employed, federal efforts will need to be guided by local priorities, with substantive involvement from local communities, and also be perceived as guided by those priorities.Adaptive management, informed by research, will be needed. It is not possible to anticipate every aspect of how an energy transition will affect different workers and communities in the decades ahead. To effectively address new challenges and to seize new opportunities, policy efforts will need to adapt as new information becomes available. To facilitate this adaptation, federal funding for applied research, including data gathering and socioeconomic analysis, will be a critical input to guide policy changes over time.1.2 Scope of This AnalysisThis analysis recognizes that a transition to clean energy will affect the entire nation (and world) but focuses on four groups for whom the transition will have significant implications:those in communities whose economies have relied heavily on coal, oil, and natural gas as drivers of employment, prosperity, and public revenue;those who face challenges accessing reliable, affordable energy, both today and in the future;those who have faced historical environmental and energy injustices; andthose who, absent policy intervention, may not benefit from the rise of cleaner and more efficient energy technologies.As noted above, this analysis is not intended to be comprehensive. Instead, it offers a menu of options that policymakers may choose from to reduce greenhouse gas and other emissions while supporting an equitable energy transition. The specific proposals were selected by the authors and organized by the editor.For each policy proposal, authors draw from the available evidence to assess policy design and estimate policy outcomes. These outcomes are focused on implementation costs and timeline, along with estimates of benefits, including environmental, employment, economic, and other effects. Where relevant, we reference the relevant sections of US Code to identify which proposals are authorized under current law and which would require new legislative authority. Finally, we reference recently proposed (and in some cases, enacted) legislation that would implement some version of the policy under consideration.1.3 LimitationsThis analysis has several limitations. First—as noted above—it is not intended to be comprehensive. To ensure an equitable energy transition, additional policies will likely be needed, and careful consideration would need to be paid to the timing, sequencing, and interactions of multiple policies.Second, because it is broad in scope, it does not provide granular detail on policy design or implementation in most cases. Effective implementation and administration of the proposals included here would require careful consideration by policymakers in coordination with the relevant executive branch agencies.Third, for some programs, evidence on the likely employment, economic, environmental, or other outcomes is limited. In these cases, we provide directional and qualitative assessments on the policy outcomes, based on the judgments of the authors.Finally, because many of the proposals included here are currently under consideration in Congress and may be the subject of legislation in the weeks ahead, the authors believe it is valuable to share this analysis before it has undergone formal peer review. The document has been reviewed by all the authors, but each proposal is the product of the authors listed and is not necessarily endorsed by all authors.1.4. Programs ExaminedIn the sections that follow, we discuss 35 policy proposals (Table 1) spanning six major categories:energy infrastructure and resilience;environmental remediation;economic development;workforce;manufacturing and innovation; andother topics.Each section is introduced by one or more authors with expertise on the relevant topic, who provide context for how each policy type can play a useful role in supporting an equitable transition to a clean energy future.For brevity’s sake, we use abbreviations for major federal agencies and offices:DOC = Department of CommerceDOE = Department of EnergyDOI = Department of InteriorDOL = Department of LaborEPA = Environmental Protection AgencyFCC = Federal Communications CommissionFERC = Federal Energy Regulatory CommissionGAO = Government Accountability OfficeGSA = General Services AdministrationHUD = Housing and Urban DevelopmentHHS = Health and Human ServicesIRS = Internal Revenue ServiceUSDA = US Department of Agriculture