Blanketed by freshly fallen snow, mountains of the Teton Range loomed above as I explored the picturesque town of Jackson, Wyoming. A native Bostonian, I had no experience in the heart of the country, but that week I wasn’t the only outsider wandering Jackson’s icy streets. In November 2018, experts from all over the world gathered in Jackson to attend the Jackson Hole Center for Global Affairs Forum with one common goal: to identify the challenges and opportunities for coal communities worldwide as they transition their economies away from coal.  

While Jackson enjoys reliable revenue from tourism, approximately 30 percent of Wyoming’s economy depends on mining, which directly and indirectly employs more than 17,000 citizens. However, under pressure from evolving energy market economics and international climate change concerns, Wyoming is just one of hundreds of coal communities worldwide now facing the challenges of energy and economic diversification. While current national policy has propped up the coal sector with middling success, Wyoming faces the same threat as resource-based economies all over the world: Diversify or fail.

The Tale of Two Coal Communities: Wyoming and Shanxi Province

In Wyoming’s northeast, the mountains of the Powder River Basin sit above the Cowboy State’s most valuable resource: coal. The top coal-producing state since 1986, Wyoming/Montana Powder River Basin provides about 40 percent of the nation’s coal. Due to technological advancements, and shallow and wide coal seams, Wyoming’s coal is relatively cheap to extract. It also burns cleaner and produces more energy per ton than other coal varieties. Unfortunately for Wyoming, coal-fired power plant operations around the United States continue to dwindle as demand for renewables and natural gas rise.

As domestic and international demand for coal drops, Wyoming coal companies are cutting employee benefits or laying off workers. In 2015, Wyoming experienced the highest U.S. unemployment spike. In the following year, approximately 500 coal miners were laid off in one day. With many coal communities facing financial collapse, Wyoming industries, governments, and workers are searching at home and abroad for models for diversifying their local economy.

On the other side of the world, China’s Shanxi Province has been a coal king for decades, producing 3.45 billion tons in 2017, far exceeding the 2.81 billion tons the country consumed. Han Wenke, a member of China’s National Development and Reform Commission’s Energy Research Institute, reported in a presentation that 80 percent of Shanxi Province’s economic performance depends on coal and coal-related industries.

The Chinese central government is reining in coal production in Shanxi and other coal producing provinces in a three-year action plan targeting air pollution amidst a national Blue Sky Protection War. For Shanxi’s coal-driven economy, the stringent air quality standards have prompted the need for energy resource transition and economic diversification. Also driving Shanxi’s green transition are other environmental concerns, such as severe soil and aquifer pollution, that have made old mining areas unfit for farming and construction.

As China continues to remedy this by promoting renewable energy, 1 million coal workers lost their jobs within the nation’s coal industry, with an additional 1 million workers expected to be laid off by 2020. In coal-dependent communities in Shanxi and Inner Mongolia, where almost half of all coal mines were “suspended or partially suspended,” the energy transition has been particularly difficult for older workers. Facing layoffs, these workers seek the same solution as miners in Wyoming: a just transition.

Looking Forward: Green and Just Transitions

A growing number of coal community advocates, like the Just Transition Fund and Kentuckians for the Commonwealth, push for companies and governments to support “just transitions” that ensure social and economic security of communities most affected by climate change mitigation. Just transition efforts have taken different forms in communities worldwide, but they involve two primary elements: developing green energy sources and safeguarding individual livelihoods.

Both Shanxi and Wyoming are seeking to optimize renewable energy generation while successfully diversifying. Touted as a coal community transition success story, Shanxi Province closed 36 mines in 2018. That same year, the province increased total installed wind and solar power capacities by 30 percent, increasing wind and solar generation by 40 percent. These changes are the results of strong local and national political efforts.

While China struggles to safeguard the livelihoods of coal workers, many state-owned enterprises (SOEs) strive to maintain elements from traditional “iron rice bowl” security measures for workers. Layoff trends vary by region and company, says Duan Hongxia from the Institute for Environment and Sustainable Development, but Shanxi has taken steps to ensure coal miner security. According to Dr. Duan, the provincial government supports training and re-employment, such as mine reclamation jobs or subsidies for individuals to start their own businesses. Even ride-share companies like DiDi have partnered with coal companies to hire laid off coal miners as drivers, says Duan. While this kind of safety net does not help all unemployed coal workers, according to Han Wenke, “the case of Shanxi proves that policy and institutional factors can address the challenges and opportunities facing energy transition.”

Wyoming can draw several lessons from Shanxi, such as investing in renewable energy development and infrastructure. Wyoming has massive renewable energy potential. The state is ranked seventh in the nation for renewable wind potential, but is currently crippling the nascent industry by taxing wind power generation. With the lowest population of all states, Wyoming’s renewable energy must be exported across state lines to be financially viable. Therefore, the state needs to invest not only in renewable energy development and commercialization, but also extensive transmission lines. Wyoming is missing out on its natural gas potential as well. The sixth largest producer of natural gas in the United States, the Cowboy State can prioritize developing infrastructure that enables natural gas, not coal, to fill the gaps left by intermittent wind and solar power

According to Daniel Slane, former Chairman of the U.S.-China Commission, infrastructure development has been viewed as a “spending bill, not an investment” by Wyoming’s Republican state congress members. NREL reports that besides investment, the state lacks renewable energy portfolio standards and energy credits that could incentivize consumers and companies to invest in solar and other renewables. In contrast, China has long supported its renewable energy sector.

Like Shanxi, Wyoming should also seek to provide security for local coal workers, creating policies, incentives, and programs that support the development of alternative industries. Travis Deti, Executive Director of the Wyoming Mining Association, sees big potential in uranium, trona, and bentonite clay, to safeguard Wyoming’s extractive resources economy. In addition to working with groups like Just Transition Fund, Wyoming should also consider passing laws like Colorado’s Energy Impact Assistance Act HB17 – 1339 that, if passed, will provide assistance to help mitigate the impacts of power plant retirements on Colorado workers and communities.

With threats of economic slowdown and fears of social unrest, Shanxi and Wyoming are not alone in their struggles to realize renewable energy potential while protecting the security of coal industry employees. While painful, these transitions are inevitable. Policymakers and industry leaders in the United States and abroad must effectively integrate economic development, climate change science, and human security to ensure that green and just transitions will become the new norm for coal communities all over the world.