Quantifying the economy-wide job impacts from coal-fired power plants: two different cases in China and the United States

A new CGS study in Applied Energy examines the employment effects of coal-fired power plant openings and closures in China and the U.S., offering insights to support a just transition to clean energy and address related social and economic challenges.

Abstract

Ensuring a swift transition from coal to clean energy is crucial for capping global temperature increases at 1.5°C. However, this transition poses significant economic and social risks to specific regions and communities, leading to job losses not only at retired plants and along the supply chain but also across entire local economies. Thus, there is a critical need to scrutinize the magnitude and distribution of economy-wide employment impacts resulting from the closure of coal-fired power plants at a granular level. This paper focuses on China and the United States, the world’s largest coal consumers, exploring shared and distinct opportunities to address the challenges of a just transition, backed by empirical evidence. Observing differing trends in coal power capacity between the two countries, we evaluated economy-wide employment impacts at the county level by simulating the opening of one coal plant in China and the closure of one plant in the United States by using both traditional economic models (excluding spillover effects) and spatial models (controlling for spillover effects). Our results revealed that in China, the deployment of coal-fired power increased economy-wide employment, including both the local job creation of coal-fired power plants and the neighboring counties’ employment. On the other hand, closing one coal plant in the United States had either not significant impacts on individual county employment or a positive impact on county cluster employment, suggesting potentially less-than-expected social risks from coal plants closure with important policy support on just transition.