Phasing Out Coal in Germany and Appalachia: Lessons Learned from Similar Experiences?

East Germany and West Virginia are currently undergoing a transformation from a local economy that is dependent on the extraction of fossil resources, in particular different forms of coal, to an economic structure that cannot depend on the income from this natural resource any longer. What are the experiences of the affected communities? How are the local grievances dealt with and social needs addressed? And, can we identify best practices and learn from these different but shared experiences? This seminar will present initial findings from three months of field work in the United States and offer insights into the key similarities and crucial differences, successful models of regional development, as well as recommendations to manage structural change successfully via a just transition.

Event Summary:

Coal is a major polluter, and phasing out coal is surprisingly hard. In light of the recent COP 26 and the resistance of coal-producing nations to transition away from coal, what makes people in coal regions in particular resist coal phase outs? What can be done to ensure an equitable transition in these regions?

Why study Lusatia and West Virginia?

• Both regions are undergoing transitions from coal dependency to new economic structures. However, this dependency on coal has already been fading for some time (at least since the 1980s).
• Both regions have lower development indicators in their national contexts than other regions.
• Both regions have experienced political swings to the extreme right after many decades of center-left politics.
• The coal producing regions span across multiple states. Lusatia spans Brandenburg and Saxony, and Appalachia spans from the southwest of Pennsylvania all the way to Kentucky and Tennessee.
• Both regions are also supported by organizations that include multilevel actors. In Germany, this includes the regional development organization for Lusatia and the federal organization that negotiated the coal phase out (the Kohlekommission). In West Virginia the Appalachian Regional Commission (ARC) includes representatives from the local, state, and federal level.

Some regional differences

• In Lusatia, miners use open-cast mining to extract lignite, or brown coal, which is dirtier and less efficient than other coal types. Traditionally in West Virginia, anthracite was extracted through deep-cast mining. West Virginia transitioned to mountaintop removal mining in the 1980s, which is more similar to open-cast mining.
• West Virginia has a much lower level of development, and therefore a much higher need for development, than Lusatia. This extends from education, to infrastructure, to internet access. The mountainous terrain and lower population density of West Virginia also makes the cost of building infrastructure much higher.
• The process of phasing out coal is predominantly market-based. Coal is too expensive to be a competitive energy product on the international mining. In the United States, the decision to phase out coal so far has been market driven. In Germany, on the other hand, the decision to phase out coal was political.

The case of Lusatia

• After World War II, Lusatia became the most important industry region in the German Democratic Republic. After 1990, the demand for local coal decreased as industry left eastern Germany, and the Zeitgeist in Germany was already looking to more environmentally friendly energy sources.
• Despite its shortcomings, the Kohlekommission made sure to involve relevant stakeholders throughout levels of government, academic experts, local groups, climate experts and activists, and industry stakeholders. The compromise that resulted from the commission is that Germany will phase out coal by 2035 (ideally by 2030). The compromise includes compensation schemes for the operators and renaturalization processes.
• We can already identify some successes in the east German coal phase out process. They include new industry sectors, investment in higher education (especially around Cottbus), and a growing tourism sector.
• Some failures include a not fully just transition and a turn in the electorate to feelings of disenfranchisement and political extremism.

The case of West Virginia

• West Virginia is known as coal country; there is a strong cultural connection to the history of coal mining, which has been in the region for over 100 years.
• However, due to market factors, the energy production in West Virginia transitioned to fracking and natural gas. While there are some jobs still in coal mining, the industry only employs about 13,000-20,000 workers in a state of 2 million people.
• Failures of the coal transition include economic decline and ghost towns where the industry was once thriving, as well as a dire opioid crisis.
• However, there are some successes. As an example, Morgantown worked to reorient their economy toward education and healthcare.
• Few initiatives expand beyond administrative units. The ARC is the overarching institution, but in general there is little collaboration between localities. Federal funds for regional development are difficult to access.
• Successes are often driven by anchor investors, usually wealthy local families who want to see the region succeed or other industries who need to build up and access talent.
• The coal identity is a reality, but it is less important than a general resistance to outsiders. There is a distrust in politics and a centrally-planned transitions, likely in response to state capture by industry.

Lessons learned

• Investment in infrastructure, especially roads, internet, and public transportation are vital for a just transition. We can already see the benefits of this in Germany during the COVID-19 pandemic. Already-existing infrastructure drew people from cities to places like Cottbus. The same has not happened in West Virginia.
• We need to encourage the already-existing entrepreneurial spirit in West Virginia, but make it easier to access federal funds for reinvestment.
• German-American policy learning can move both regions forward. There are a variety of initiatives that bring together with similar experiences but differing expertise can raise the understanding for both countries on how to build a just transition.

Supported by the DAAD with funds from the Federal Foreign Office (FF)