The oil and gas industries are “a bedrock of local public finances in hundreds of counties across the United States,” said Daniel Raimi, a fellow at Resources for the Future and lecturer at the Gerald R. Ford Center for Public Policy at the University of Michigan.
“When you look at the raw numbers, the contribution of fossil fuels to government revenues in the United States is roughly the same as our wages paid to individuals who work in those same industries,” said Raimi, during a Nov. 16 webinar, organized by the National Academies of Sciences, Engineering and Medicine. The event, titled “Climate Conversations: Future of Fossil Fuels” draws from the report Accelerating Decarbonization in the United States.
“For every dollar in wages lost associated with the energy transition, you’re probably looking at about a $1 in public revenue lost for schools, and roads, and public services,” Raimi continued. “This is a really big deal that I think should be on the same level as jobs.”
Decarbonizing the transportation and energy sectors is quickly becoming a strategy for cities and states as they develop and adopt climate action plans. COP28, the recent United Nations climate summit in Dubai adopted language calling for “transitioning away from fossil fuels,” signaling a clear direction away from coal, oil and natural gas, which has been powering the planet for at least a century. Beyond fuel sources, petrochemicals are a key piece of the manufacturing of everything from clothes to cars.
“We absolutely need a shift to a net-zero emissions system, but it’s going to be challenging. Because fossil fuels are ubiquitous, and they exist at scale that’s kind of hard to comprehend when you really wrap your head around it,” said Raimi, underscoring the gravity and monumental nature of the transition away from fossil fuels.
Which is why communities at all levels need to be planning for this shift, in part, to ensure that it happens; but also, so that entire communities — and government funding — is not lost in the wake.
“We are on this very profound policy revolution. And that policy revolution has a lot of promises. It also is missing some really key pieces if we want to think about this idea of a pretty rapid phase down of fossil fuels.” said Julia Haggerty, associate professor of geography in the department of Earth Sciences at Montana State University, on the panel. Haggerty has conducted research in the ways rural communities are shifting economic and policy directions.
Experts like Haggerty and Raimi have called for a “just transition” away from fossil fuels, which includes areas like economic development and workforce training particularly for those areas where the oil and gas sector plays a strong role in local and regional economies.
A just transition, said Raimi is, “one where as the energy system changes, the people and places who are most dependent on fossil fuels for economic well-being, are kept whole. That they’re not disproportionately impacted.”
The transition is aligned with not just sustainability, but opportunities for these communities to flourish, said Haggerty.
“In general, this transition will create many more jobs than it will destroy,” she added. “That said … it is not a one-to-one replacement kind of scenario, particularly in those places with lots of dependence.”
Economic opportunity is already growing in numerous parts of the country and economy that have embarked on the clean energy transition, said Raimi.
However, “it’s not necessarily benefiting the fossil fuel regions of the United States,” he added. Even if those communities are also “aware of the downside risks.”
“They’re aware of the truck traffic. They’re aware of the air pollution. They’re aware of the water pollution. They don’t like it,” said Raimi. “And so if there are other opportunities for those regions to prosper, for those people to prosper, without all of the baggage and bad stuff that comes with fossil fuels, I think people are going to be onboard with that.”
