working paper

The Economic Benefits of the New Climate Economy in Rural America

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Benefits to Economically Disadvantaged Communities

Federal investment in the seven areas of the new climate economy could help create employment and increase economic activity in economically disadvantaged rural counties, helping to revitalize these areas while providing climate benefits. About 52 percent of all rural counties are economically disadvantaged, defined as “at risk” and “distressed” counties by the Economic Innovation Group’s DCI. In 2019, these economically disadvantaged rural counties accounted for 43 percent of all rural county employment.

Table 12 | Annual Economic Benefits for Economically Disadvantaged Rural Counties

Investment Areas

Jobs Created

Value Added ($, millions)

Employee Compensation ($, millions)

Combined State, Federal, and Local Tax Revenue ($, millions)

Renewable energy

12,700

$1,416

$68,344

$216

Energy efficiency

10,800

$1,046

$575

$5

Transmission, distribution, and storage

20,300

$2,370

$1,278

$149

Remediation of abandoned fossil fuel sites

9,800

$1,341

$638

$109

Tree restoration on federal lands

3700

$188

$133

$5

Tree restoration on non-federal lands

37,100

$1,885

$1,345

$102

Wildfire risk management including downstream impacts

24,000

$1,640

$1,267

$96

All investment areas

118,500

$9,888

$5,920

$685

Source: WRI authors and BW Research.

The new climate economy opportunities described here could create over 118,000 jobs per year in these counties, resulting in over $9.8 billion added to these rural economies annually, including $5.9 billion in employee compensation and $685 million in total tax revenues (Table 12). Economically disadvantaged rural counties in California, Texas, New Mexico, Missouri, and Kentucky stand to benefit the most in terms of total jobs supported by federal investment in the seven focus areas of this analysis. While this job creation is significant, representing approximately 45 percent of job creation potential from investment in the seven areas of the new climate economy, more needs to be done to ensure economic benefits reach the areas where they are most needed.

The investment in the policies and opportunities modeled in this analysis represent only the first steps toward creating economic opportunities in economically disadvantaged rural counties. As suggested by the White House Environmental Justice Advisory Council (WHEJAC 2021), federal policies and initiatives will need to include measures specifically designed to ensure that investments and benefits reach these disadvantaged communities. This could include workforce training programs in the energy and land sectors with employment guarantees, measures to make clean energy affordable for low-income households, grant programs to support local businesses and nonprofit organizations, and requirements that new program designs be collaborative, inclusive, and accessible to all workers.

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