RHODELL, WV -JULY 01: Main Street in this small coal camp town is almost deserted. (Photo by Michael ... [+]
Cloé Zhao’s movie Nomadland (based on Jessica Bruder’s novel) is receiving rave reviews. It also has important implications for the climate debate.
The movie is about a blue-collar worker, Fern, who gets laid off in 2011 from the U.S. Gypsum plant in Empire, Nevada (because the great recession has shut down the sheetrock plant). Fern is rendered houseless (not homeless, as she insists), and she moves from state to state in her white van picking up part-time jobs and staying at various R.V. parks. The movie shows the shared experiences of many people, mostly older, who suffered from the 2007-2009 recession. With meager social safety nets (despite several years of holding steady jobs), they face tremendous economic hardship (and health crises in some cases). The movie vividly reveals the economic challenges from economic shocks arising from business cycles and globalization encountered by the less visible America (a scenario that has been replayed in the COVID-19 recession). Yet, it shows their resilience, optimism, dignity, and a sense of shared destiny.
Nomadland could provide a glimpse into future politics unless decarbonization processes are made equitable. In the last 12 months, several countries and companies have announced net zero emission commitments. This is excellent news, given the gravity of the climate crisis. Many politicians claim that decarbonization will lead to prosperity. Well, not quite. Economic transitions create winners and losers. Think of the economic transformation (including the emergence of the “rust belt”) brought about by international trade and capital flows. In the absence of mechanisms to share gains and provide cushion against economic costs, such transformations can ignite opposition. In part, the forces of populism that are gathering strength in several countries have resulted from improperly managed globalization.
“Just Transition”: A Moral and Political Necessity
Globalization-inspired economic disruption (which caused Fern to lose her job) is a trailer for another movie: decarbonization. For the last two centuries, economic systems have relied on cheap fossil fuels. As the world moves away from fossil fuels – which it should–the ensuing economic dislocation could ignite a backlash. As we discuss below, this is why “just transition” policies should be a top political priority in climate policy design.
Without “just transition,” decarbonization policies will likely inflict severe costs on fossil-fuel industries. Companies will go bankrupt, workers will lose jobs, and pensioners will no longer receive company-guaranteed benefits. With reduced purchasing power, local businesses will close and downtowns will be boarded up. Serious social and public health challenges will emerge.
In many areas, the decarbonization challenges will be accentuated by indefensible business and government practices. Take the case of Blackjewel coal company which has filed for bankruptcy. Blackjewel was in the news previously when its workers in Harlan County, Kentucky, stopped a coal train to demand their back wages. Now, in the bankruptcy proceedings, Blackjewel wants to shed its responsibility for reclaiming coal mines. But without proper reclamation, exhausted mines will become pollution hotspots and vulnerable to landslides. Real estate will become unattractive to outside investors.
Can Philanthropy Help Poor Communities?
Scholars suggest that non-profits emerge to address the twin failures of markets and states to provide goods and services. Think of food banks, homeless shelters, free healthcare facilities and legal clinics run by nonprofits. Corporate and individual philanthropy is an important source of nonprofit funding. But are philanthropists focusing their funding on non-profits working in the various Nomadlands? A recent article by Professors Boodoo, Henriques, and Husted documents that U.S. corporate foundations tend to fund healthcare services and healthcare non-profits in richer counties. Thus, instead of correcting market and government failures, corporate philanthropy might accentuate them.
Of course, not all philanthropists favor big city, celebrity-endorsed non-profits. Contrast the philanthropy models of Jeff Bezos and MacKenzie Scott. The former tends to fund big projects managed by national-level non-profits, while the latter prioritizes small grants spread over among a large number of local organizations.
“Just Transition” and the Biden Presidency
Several groups have become vocal on the subject of “just transition.” In June 2020, these groups established the National Economic Transition Platform in order to support coal mining communities. Recently, a coalition of diverse groups from Appalachia to the Navajo Nation in Arizona has demanded that President Biden establish the White House Office of Economic Transition.
President Biden acknowledges that a “just transition” must accompany decarbonization. On January 27, he issued an Executive Order on “Tackling the Climate Crisis at Home and Abroad.” The order noted: “Mining and power plant workers drove the industrial revolution and the economic growth that followed, and have been essential to the growth of the United States. As the nation shifts to a clean energy economy, Federal leadership is essential to foster economic revitalization of and investment in these communities...” In this order, he also established the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization.
However, when it comes to budget outlays, “just transition” funding continues to be small. For example, in the $2.3 trillion American Jobs Plan, funding for fossil fuel and natural resource dependent communities amounts to $31 billion (1.3%). This includes $16 billion for reclamation, $5 billion for Brownfield and Superfund remediation, and $10 billion for the Civilian Climate Corps.
Climate critics tend to blame all economic problems on decarbonization. In reality, the decline of coal is due to the availability of shale gas, not environmental laws. A vigorous and visible “just transition” policy will create the moral and political capital for accelerated decarbonization. As President Biden negotiates his infrastructure and climate plans with Congress, he must place “just transition” among his top priorities.
