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Obama's Not Really Waging a War on Coal — But China Is

The Chinese government plans to close mines, shutter power plants, and slow steel production, but provide aid to dislocated workers. The situation in the United States is a little different.

by Jake Bleiberg
Mar 2 2016, 6:15pm

Imagen por Michael Reynolds/EPA

Roughly 1.3 million Chinese workers will climb out of mines in the coming years and file out of coal-fired power plants for the last time. Some 500,000 colleagues, laid off from the steel sector, will join them. Together this mass will face the uncertainty of China's shifting economy and effort to turn towards cleaner energy.

But those forced out of work by their government's war on coal can also expect aid in transitioning to new jobs. Yin Weimin, the country's minister for human resources and social security, said on Monday that 100 billion Chinese Yuan ($15.27 billion) would be set aside to help dislocated workers.

While this sounds like a lot of money, Elizabeth Economy, an expert on China with the Council on Foreign Relation, said that the challenge facing the world's largest producer of coal is similar to that facing the United States, the world's second.

"In this regard, China is not very different from the United States, workers are being laid off and they have families to support," said Economy. "The question is what are [government leaders] going to do with the money. If it's a one-time payment, it's not going to last very long, and workers will be asking, 'What about our pensions?'"

'The coal industry is going to make a very big comeback.'

The 1.8 million layoffs have been announced as China is trying to ease pollution and shift to a more consumer-driven economy by ceasing overproduction of manufactured goods. The plan is to cut 500 million tons of coal production capacity by 2020, but there is no set timeframe for the layoffs. Economy warned that there could be wide gaps between the economic messages Beijing sends abroad and what happens domestically. And, she added, the central government risks political fallout from the mass layoffs in the state-run coal sector.

The bitter politics of shifting away from coal are familiar in the United States, where many communities wholly depend of the industry, Republicans, and some Democrats have branded the White House's energy and climate change policies as a war on coal. Indeed, US coal production is on the downturn, but unlike China's central government-driven cuts, the American coal industry is losing jobs not just because of government regulations, but because of market conditions — and its own anti-labor policies.

Ten years ago, coal power plants provided roughly 50 percent of America's electricity, as they did for several previous decades. Today, they produce around 35 percent. The turn to other energy forms — along with the rise of less labor-intensive mining techniques, like mountaintop removal mining — have winnowed the ranks of coal miners.

According to Republicans, from congressional majority leader Mitch McConnell to Donald Trump, Obama is to blame.

"Obama has decimated the coal industry, and we're going to bring the coal industry back," Trump said at a Super Tuesday rally in Louisville, Kentucky, part of McConnell's district. "The coal industry is going to make a very big comeback."

Related: Air Pollution Kills 5.5 Million People a Year — Over Half of Them in China, India

But even a Republican government would likely struggle to restore coal, as its decade-long decline is not merely the result of a battle plans drawn up in the White House. Rather, a combination of federal and state policies, the Sierra Club's hard fought and well funded push to kick coal, and competition from wind, solar and natural gas, which dropped 63 percent in price between 2007 and 2012 (the most recent year for which government data is available), have come together to devastate the sector.

"It's politically expedient for the Republicans to point the finger at a Democratic president, but the reality is that a massive grassroots movement combined with market forces have been the real drivers of change," said Mary Anne Hitt who heads the Sierra Club's Beyond Coal campaign.

In 2013, more Americans worked in the solar sector than in coal mines, according to an industry survey and the US Bureau of Labor Statistics. As in China, the mass layoffs from coal raise tough questions about how American workers will transition and what will become of their pensions, as coal company after coal company files for bankruptcy.

The Obama administration's so-called Power+ program to provide aid to struggling coal communities has received bipartisan support and partial funding. Among the parts not funded by the US Congress is an aid package for the United Mine Workers of America's (UMWA) pension and medical funds, which are threatened by the bankruptcy filing of several coal companies. Earlier this month, the Washington Post reported that Mitch McConnell — who has had repeated public clashes with the union — blocked financial assistance to the funds, which the UMWA states "provide pensions and medical care to just under 100,000 retired miners, widows, and dependents."

A spokesperson for the Senator, who called Obama's regulatory regime "heartless," did not respond to a request for comment.

Ranping Song, who tracks the Chinese economy and environment for the World Resources Institute, said that it remains to be seen how effectively China manages reorienting 1.8 million coal and steel workers, but that it is doing so out of simple necessity.

"From an economic point of view, from an environmental point of view, there are no other ways forward," said Song.  

Related: Obama Halts New Coal Mining Leases on Federal Lands

Follow Jake Bleiberg on Twitter: @JZBleiberg

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