Just Transition says economic transition for coal communities will be long-term, and state should make long-term commitment
Committee believes the communities that continue to thrive will be those that have clear visions for the future and the ability to achieve those visions
Communities such as Moffat County and the City of Craig that have thrived off of coal-based energy for decades will look much different in the near future thanks to the transition away from coal by 2040.
After focusing heavily on the workers and their families in Part I of the Just Transition rough draft, the advisory committee spent significant time on coal communities and how they’ll transition away from coal.
“We believe the communities that continue to thrive will be those that have clear visions for the future and the ability to achieve those visions,” the advisory committee said in the rough draft. “Our recommendations prioritize community resilience, economic diversity, equity, creation of local wealth, long-term business development and expansion, and stable jobs that pay living wages and provide good benefits.”
In total, the advisory committee came up with five recommendations for coal communities and their transitions away from coal in the near future. The recommendations are:
- Assist affected communities with the creation of local transition plans that pivot from resource extraction to new industry sectors that provide living wages and an adequate tax base.
- Align and coordinate existing State programs to support local transition plans and facilitate the growth of existing businesses while attracting new industries and businesses.
- Invest in local physical and community infrastructure to maintain and improve quality of life and critical services.
- Establish a state-wide independent investment intermediary focused on leading and structuring investments in coal transition communities, consistent with their established local transition plans.
- Establish a state-wide investment fund focused on making investments in coal transition communities, in collaboration with those communities and consistent with their local transition plans. The purpose of the fund is to lower risk for other investors and to provide a mechanism for long-term investments in these communities.
What exactly is a local transition plan? According to the advisory committee’s rough draft to the state, it centers around communities pivoting from resource extraction to new industry sectors that can provide living wages and an adequate tax base.
The advisory committee cited communities needing adequate and consistent funding and staffing to implement those changes, all while coming up with a transition plan of their own.
“What is true for workers is also true for communities — successful transitions start with careful planning, and starting early is critical,” the advisory committee said. “Planning should be driven at the local level and should reflect local visions and aspirations, and capitalize on unique local strengths. Once again, the State of Colorado should be an effective and supportive partner.
“…Our recommendation is for the state to meet each community where it is in the process and work with it to build toward success.”
The problem with that statement though is that the advisory committee puts the onus back on the communities that will be affected to come up with their own transition plan to fit their own individual needs. Failure to come up with a local plan could, in turn, cause the state to stop working with communities, which could prove catastrophic.
“We believe this early work is so critical that the State should not move forward in partnership with a community until it has a local community transition plan in place,” the advisory committee said. “By all means, the State should provide technical and financial assistance and mentoring to help communities — and regions — develop and agree on their plans and strategies. But it should not move forward with further assistance until that plan is complete.”
Aside from communities needing to come up with local transition plans to continue receiving support from the state, the advisory committee is suggesting that the state assist those communities affected by the transition by investing in physical and community infrastructure to maintain and improve quality of life and critical services. The state should maximize the benefit of these investments by requiring labor standards, domestic content requirements, labor agreements, community benefit agreements, local hiring, and other provisions that provide direct benefit to the workforce in the community.
“A community’s physical and cultural assets are key components of that appeal — the ability to reach one’s markets by road, rail or air — or broadband — as well as quality schools, higher education and apprenticeship programs, a wide rage of quality healthcare services, and other community assets such as parks, arts facilities, and recreational opportunities,” the advisory committee said. “These investments in infrastructure must be forward-thinking and prepare communities for the economic opportunities of the future, not the past.”
With the COVID-19 pandemic hampering not on the state’s budget but local budgets as well, how could the state possibly take on that financial burden moving forward? The committee cited Sentate Bill 19-236, defined as “Energy Impact Bonds” and also referred to as “securitization,” which is a debt refinancing mechanism for coal plants that can lead to significant savings that can then be used for both impacted communities and workers.
“Whatever the strategy, we urge the State not to skimp in this area,” the advisory committee said. “Economic development professionals tell us that, dollar-for-dollar, these are among the best investments a community (and a state) can make in its long-term economic vitality and in attracting employers who will stay for the long-term.”
Unfortunately, many of the recommendations for coal communities from the advisory committee will cost quite a bit of money, not only for the state but local communities as well. In these times of uncertainty in the midst of a global pandemic, fiscal issues could be significant hurdles.
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