A Proposal for Managed Change in Coal Sector

Instead of waging a battle in Congress or courts over the future of the U.S. coal industry, one man suggests a federal buyout that could provide a well-financed 10-year transition to new businesses and new jobs in coal country.

Instead of waging a battle in Congress or courts over the future of the U.S. coal industry, one man suggests a federal buyout that could provide a well-financed 10-year transition to new businesses and new jobs in coal country.

The politics of climate change and the market forces turning away from coal-fired electricity will play an outsized role in the 2016 presidential election. But one man says there is a smart compromise that could put everybody on the same side.

In an op-ed published by The Washington Post, Stephen Kass says the issue of what to do about coal could lose its grimy political messiness if the federal government stepped in to buy out the industry and retrain workers for new jobs.

Stephen Kass, a New York lawyer and professor, says the federal government should buy out the coal industry and retrain coal workers for other jobs. 

Stephen Kass, a New York lawyer and professor, says the federal government should buy out the coal industry and retrain coal workers for other jobs. 

Sound far-fetched or socialistic? Kass, who heads a New York Bar Association task force on climate adaptation, says it is neither. Coal companies, he says, are barely hanging because of competition from lower-priced natural gas and the growing viability of wind and solar power. Coal industry workers may find themselves out of work and willing to accept help finding new skills and new job opportunities.

This strategy, Kass argues, offers more upside than a prolonged battle to sidetrack President Obama’s Clean Power Plan, which is now stymied in court, but even if implemented would fall short of meeting climate goals agreed to by 195 nations, including the United States, in Paris.

The Kass plan would close down the coal industry over a 10-year period, providing a gentler glide path than sudden plant closures, and giving workers and communities a fixed date for pursuing a new path.

In his op-ed. Kass didn’t explicitly make the point, but could have that a 10-year transition could be a perfect pivot for manufacturers to swoop in to take advantage of a skilled, but soon-to-be unemployed work force with federal money to give them the training for new jobs.

Kass says his plan eclipses liberal and conservative ideology. “Coal plant operators and institutional investors, as well as their lenders, are locked into deteriorating (and most fully depreciated) assets that are losing the competition against natural gas and renewable energy – and facing increased regulation of pollutants independent of climate change initiatives,” he wrote. “These parties might welcome a graceful exit.”

“Even unions, faced with declining jobs and wages in the coal sector, might support a well-financed and carefully designed program to enable workers to pay off mortgages, car loans and medical or college bills and prepare for a more productive future in other energy-sector jobs." 

Agreeing to such an approach would require a level of bipartisanship in Washington that seems unattainable at the moment. But Kass implies a proactive government stance on inevitable change – which can have devastating effects on a significant swath of America – is a worthy ambition that can satisfy liberal and conservative policy appetites. Liberals would see the coal industry shut down without dumping coal workers in the slag heap. Conservatives would respect that business owners received fair compensation for their assets and red-leaning states wouldn’t be left high and dry.

The federal government would score a win by keeping its pledge to reduce greenhouse gas emissions and provide a replicable example of how a government can manage a market to achieve an environmental objective without imperiling corporate, regional of personal economies.

This is an idea unlikely to pop up on the campaign stump this summer and fall, but it could be a policy option dropped on the table for a new President and the next Congress.