A county-by-county study maps the effects of the energy transition on employment

A new analysis by MIT researchers shows the places in the United States where jobs are most tied to fossil fuels. The research could help policymakers better identify and support areas affected over time by the shift to renewable energy.

Although many of the most potentially affected locations are experiencing intensive drilling and mining operations, the study also measures how areas dependent on other industries, such as heavy industry, could experience changes. The research examines the entire United States, county by county.

“Our result is that you see a higher carbon footprint for jobs in places that drill for oil, mine for coal, and drill for natural gas, which is evident in our maps,” says Christopher Knittel, an economist at MIT Sloan School of. Lead and co-author a new article detailing the results.

“But we also see high carbon footprints in areas where we do a lot of manufacturing, which is more likely to be overlooked by policymakers when considering the impact of the transition to a zero-carbon economy on job.”

So while some areas of the United States known for their fossil fuel production would certainly be affected – including West Texas, the Powder River Basin in Montana and Wyoming, parts of the Appalachian Mountains, etc. – various industrial areas in the Great Plains and Midwest could be affected. employment is also changing.

The paper entitled “Assessing the distribution of employment vulnerability to the energy transition using employment carbon footprints” is published in Proceedings of the National Academy of Sciences.

The authors are Kailin Graham, a master’s student in MIT’s Technology and Policy program and graduate research assistant at MIT’s Center for Energy and Environmental Policy Research; and Knittel, the George P. Shultz Professor at MIT Sloan.

“Our results are unique in that we cover almost the entire US economy and take into account impacts on places that produce fossil fuels, but also on places that consume a lot of coal, oil or natural gas as energy,” explains Graham. “This approach gives us a much more complete picture of where communities could be impacted and how support should be targeted.”

Target adjustment

The current study stems from previous research conducted by Knittel, measuring carbon footprints at the household level across the United States. The new project takes a conceptually similar approach, but for jobs in a given county. To conduct the study, researchers used multiple data sources measuring businesses’ energy consumption, as well as detailed employment data from the U.S. Census Bureau.

The study takes advantage of changes in energy supply and demand over time to estimate the extent to which a full range of jobs, not just those related to energy production, are linked to use of fossil fuels. The sectors considered in the study represent 86% of US employment and 94% of US emissions, with the exception of the transportation sector.

The Inflation Reduction Act, passed by Congress and signed into law by President Joe Biden in August 2022, is the first federal legislation to provide an economic buffer to regions impacted by the transition away from fossil fuels. The law provides expanded tax credits for economic projects located in areas of “energy communities,” defined largely as places where employment or tax revenues from the fossil fuel sector are high and unemployment is high. pupil. Areas with recently closed or downsized coal mines or power plants are also eligible.

Graham and Knittel measured the “employment carbon footprint” (ECF) of every county in the United States, producing new results. Of more than 3,000 counties in the United States, researchers found that 124 of them are in the 90th percentile or higher in ECF, but do not qualify for help from the Inflation Reduction Act. Another 79 counties are eligible for Inflation Reduction Act assistance, while still being in the bottom 20 percent nationally in terms of FEC.

These differences may not seem colossal, but the results identify real communities potentially excluded from federal policy and highlight the need for retargeting of these programs. Graham and Knittel’s research provides an accurate way to assess the industrial composition of U.S. countries, which could potentially help target economic aid programs.

“The impact of the energy transition on jobs will not only be felt where oil and natural gas are drilled, but also throughout the value chain of the products we make in the United States,” says Knittel. “It’s a larger problem, but still focused.”

Graham adds: “It is important for policymakers to understand these economy-wide employment impacts. Our goal in providing this data is to help policymakers incorporate these considerations into future policies such as the Inflation Reduction Act.

Adapt the policy

Graham and Knittel are still evaluating what the best policy measures might be to help parts of the United States adapt to moving away from fossil fuels.

“What we haven’t necessarily come full circle on is the right way to develop policy that takes these factors into account,” Knittel says. “The Inflation Reduction Act is the first policy to reflect on a (fair) energy transition because it provides subsidies for energy-dependent countries.” But with sufficient political support, additional policy measures in this area could be considered.

One thing that is clear from the study data is that many U.S. countries are in diverse situations, so there may not be a single approach to encouraging economic growth while transitioning to energy clean.

What works best for West Texas or Wyoming might not work for local economies more focused on manufacturing. And even among primary energy production areas, there may be distinctions between those drilling for oil or natural gas and those producing coal, based on the particular economic characteristics of those fuels. The study includes detailed data on each county, characterizing its industrial portfolio, which can help tailor approaches to a range of economic situations.

“The next step is to use this data more specifically to design policies to protect these communities,” says Knittel.

This story is republished courtesy of MIT News (web.mit.edu/newsoffice/), a popular site that covers news about MIT research, innovation and education.