Purpose
- Investigates the causes of economic imbalances.
- Investigates the effect of the global financial system and/or the monetary system in fostering a sustainable economy.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.
Summary
In this project, Brookings scholar Adele Morris worked with the Partnership for Responsible Growth (PRG) on their field-based listening sessions with community development and economic transition leaders in coal-reliant communities. She also conducted research and engagement on the issues independent of the PRG. This is Brookings’ second proposal to the Walker Foundation for this two-part project in which Morris will incorporate her findings from this work into a policy brief. The goal is to inform the provisions of carbon tax legislation that could provide funding for assistance to these workers and communities.
Photos of some of the miners being treated for black lung and silicosis.
Description
This memo summarizes the work from October 2020 through January 2021 under the grant beginning July 1, 2020. The goal remains to inform the provisions of carbon tax or other legislation that could provide funding for assistance to coal-reliant workers and communities. A small percentage of the revenue from a federal carbon tax in the United States could help meet the needs of already-stressed coalfield communities. Given that these resources could be many times larger than amounts previously proposed for coal worker and community support, the potential allocation and governance of these funds is important and novel.
As Adele Morris wrote in her report covering March 2020 through September 2020, “I participated in a series of local/regional meetings in both eastern and western coal communities, and I have maintained contact with a number of people I met through those travels.”
She presented her paper with Noah Kaufman (Columbia University) and Siddhi Doshi (Brookings), “The Risk of Fiscal Collapse in Coal-Reliant Communities,” at a May 2020 meeting of the National Bureau of Economic Research (NBER). She and her coauthors revised the paper significantly for publication in a prestigious new journal. They first released the new paper, called “Revenue at Risk in Coal-Reliant Counties” as NBER Working paper No. 27307, issued in June 2020. It is now out in the journal Environmental and Energy Policy and the Economy, volume 2, Kotchen, Stock, and Wolfram eds. 2021.
The new paper builds on the earlier work to include econometric estimates on how the revenue to coal-reliant counties would change with an end to coal production in their jurisdictions. When extrapolated outside the sample, their regression analysis of 27 coal-reliant counties suggests that the demise of coal could lower these counties’ revenue by about 20%. This does not account for the potential downward spiral of other revenues and economic activity as the collapse of the dominant industry erodes the tax base.
The paper attracted the attention of the press, stakeholders, and others involved in climate policy. Morris has heard from reporters both in Appalachia and Wyoming, and the paper has also been cited in other academic literature and books, including Appalachian Fall: Dispatches from Coal Country on What's Ailing America by Jeff Young. Additionally, Morris spoke at an event hosted by the Atlantic Council on the challenges of the transition away from coal and she is giving a seminar this week for the Environmental Defense Fund staff on the paper. Further, she has spoken with Hill staffers about the potential benefits for coal workers and communities that could be included in climate legislation.
Morris is continuing work on a paper that analyzes the challenges facing the Black Lung Disability Trust Fund (BLDTF). The BLDTF is funded by an excise tax on nearly all coal produced in the United States. As U.S. coal production falls, two factors undermine the fiscal health of the program: more coal companies go bankrupt, ceding their liabilities to the government, and federal revenues from the coal excise tax fall. Projected revenues for the program suggest the program will accrue increasing amounts of debt owing to both declining coal production and a decrease in the excise tax rate currently scheduled for 2021. If the United States adopts significant policies to reduce greenhouse gas emissions in the power sector, coal consumption and production will fall more dramatically than they have already, worsening shortfalls in the BLDTF. This raises the question of whether the climate policy can or should ameliorate deficits in the BLDTF, and if so how. This is the question the paper addresses.
Morris plans to finalize the black lung paper and publish it and a related shorter piece on the Brookings website this spring. She expects it to also appear on the Urban-Brookings Tax Policy Center website. Progress on this paper was slower than expected owing to the demands of the revising the earlier version for journal publication, Congressional and public outreach, and legislation that modified the BLDTF tax rates that necessitates revising their estimates.
After this paper, Morris plans to move on to writing about other challenges facing coal-reliant communities and workers. She has not yet decided the specific future topics because the literature and policy discussions are changing rapidly.
Her work to advise the Dialogue at the Pontifical Academy of the Sciences (Casina Pio IV in the Vatican) on “The Energy Transition and Care for Our Common Home” as it relates to “principles for a just transition pertaining to carbon pricing” remains on hold owing to schedule changes related to the pandemic.
Purpose
This project will allow further research to be conducted, which will contribute directly to the Walker Foundation’s purposes:
• it investigates the underlying causes of economic imbalances, such as depressions, recessions, and unemployment, and the factors which contribute thereto;
• it investigates causes tending to destroy or impair the free-enterprise system;
• it explores market-based solutions; and
• it investigates approaches that can be applied to solving economic imbalances that may affect the United States and challenges to the free enterprise system.
The project is serving these objectives by exploring a range of pragmatic approaches to ameliorate the disproportionate impacts that a carbon tax will have on those reliant on the coal industry.
Scope
Under this grant, Morris has participated in a series of local/regional meetings in both eastern and western coal communities organized by the Partnership for Responsible Growth (PRG). She is actively informing policymakers, journalists, and stakeholders on transition issues.
Amount Approved$25,000.00
on 7/1/2019
(Check sent: 7/29/2019)
