Highlights

• Rural America can reap significant benefits from investments made in the new climate economy, including measures to advance clean energy systems, remediate abandoned fossil fuel production sites, restore trees to the landscape, and reduce the risk of catastrophic wildfire. Collectively, these actions can create new economic opportunities in rural places while addressing climate change.
• This working paper presents a detailed analysis of the rural economic impact of federal policies that invest in the new climate economy, including information about the geographic and sectoral distribution of those investments.
• The opportunities analyzed here would require US$55 billion in annual federal investment nationwide for five years, of which nearly $15 billion per year would flow to rural counties. This rural investment could support nearly 260,000 rural jobs that would last for five years (a total of 1.3 million job-years) across the country, if complementary measures were adopted to ensure that a minimum share of funding reaches rural counties. It would also generate $21.7 billion per year in overall value added to rural economies, including $12.9 billion in rural employee compensation and $1.6 billion in local, state, and federal tax revenues.
• Every $1 million invested through the new climate economy pathways included in this analysis would generate 17.5 jobs and $1.5 million in value added in rural economies.
• Nearly 45 percent of all rural jobs created by these federal investments would accrue to economically disadvantaged rural counties. Federal investments must specifically prioritize equity in distribution to ensure that these benefits reach rural communities in need.

Context

Rural America faces the dual challenges of lagging economic growth and increasingly severe impacts from climate change. These challenges have been highlighted by economic losses from the COVID-19 pandemic, which has exacerbated existing inequalities and infrastructure needs, alongside catastrophic wildfires and severe weather linked to climate change.

Addressing both challenges at once will require federal investment in building a new climate economy for rural America—one that reduces greenhouse gas emissions to net zero while creating jobs, uplifting economically disadvantaged communities, and enhancing ecosystem services. Prospective investments in the new climate economy have already garnered broad support from federal policymakers and rural voters alike, but strong federal policy has yet to be enacted. The current push by Congress and the Biden administration to invest in the country’s ailing infrastructure and tackle the climate crisis represents the most promising political moment in years to amplify the new climate economy in rural America.

Federal investment in the new climate economy can create jobs, bolster rural economies, and contribute significantly to addressing the climate crisis. Specific investment opportunities evaluated in this paper include the following:

• Developing renewable energy resources
• Making homes and industries more energy efficient
• Building infrastructure for clean energy transmission, distribution, and storage
• Cleaning up abandoned fossil fuel infrastructure
• Restoring trees on federal lands through reforestation and restocking degraded forests
• Restoring trees on private, state, and local lands through reforestation, restocking, and agroforestry systems
• Reducing the risk of catastrophic wildfire through prescribed burning and biomass removal

While not comprehensive, these opportunities are intended to be representative of key needs for investment in the new climate economy. They are the subject of analysis in this working paper.

About This Working Paper

This working paper estimates the potential economic benefits in rural America from federal investments that support a new climate economy. Our assessment uses input-output modeling to estimate direct, indirect, and induced job creation in rural counties from specific federal investments across seven pathways, including opportunities in the energy and land sectors (Table ES-1). We also estimate the associated value added to rural economies, including total employee compensation and additional tax revenues to federal, state, and local governments. Based on these results, we analyze the distribution of rural economic benefits across the United States and the proportion of these benefits likely to accrue to economically disadvantaged rural communities, defined as counties identified as distressed and at risk by the Economic Innovation Group’s Distressed Communities Index.

We discuss federal policies that could catalyze investments in the new climate economy. The policies presented here could help rebuild U.S. infrastructure in a way that creates jobs, supports economically disadvantaged communities, and addresses climate impacts. While this discussion is targeted at federal lawmakers, state and local policymakers may also find value in these proposals.

Our analysis goes beyond most other published economic analyses of decarbonization policies by segmenting federal investment between rural and urban counties for specific opportunities in both the energy and land sectors, informed by interviews with practitioners and industry experts as well as qualitative case studies. The result is a detailed picture of how federal investments would be distributed across rural counties, including consideration of economically disadvantaged communities. This granularity reflects our understanding that good federal policy requires an intimate knowledge of how investments will translate into economic benefits across sectors and geographies.

Table ES-1 | Rural Economic Impacts by Investment Area (Each Year for First Five Years)

Source: WRI authors and BW Research.

Note: Delaware, the District of Columbia, New Jersey, and Rhode Island do not have any rural counties as defined by the U.S. Department of Agriculture.

This working paper is part of New Climate Economy, a project of the Global Commission on the Economy and Climate, which seeks to enhance our global and national understanding of how climate policy can help unlock economic and social benefits. This paper estimates overall economic benefits only.

The Rural Economic Opportunity

We evaluate the impact of $55 billion per year in federal investment in seven areas of the new climate economy over five years. An estimated $14.9 billion of that investment would be directed to rural America. That investment would support nearly 260,000 direct, indirect, and induced jobs in rural counties for at least five years (a total of 1.3 million job-years) and 740,000 jobs in the country as a whole for at least five years (a total of 3.7 million job-years). This equates to 17.5 jobs created per $1 million invested in rural counties, compared with 13.5 jobs created per $1 million nationally.

This level of investment would also add $21.7 billion per year to rural economies for the first five years—$1.46 for every dollar invested. This includes $12.9 billion in employee compensation and $1.6 billion in federal, state, and local tax revenues. Table ES-1 shows the distribution of economic benefits across the seven investment areas in the new climate economy. In absolute terms, rural counties in California, Texas, New Mexico, Missouri, and Wyoming stand to gain the most in terms of job creation each year for the first five years (Figure ES-1).

Of the 260,000 rural jobs created by this investment, over 118,000—nearly 45 percent of all rural jobs—would accrue to economically disadvantaged rural counties. These counties would benefit from $9.8 billion added to their economies annually, including $5.9 billion in total employee compensation and $685 million in total taxes.

The Policy Opportunity

The federal government has an opportunity to enact and expand policies that will drive investments in the new climate economy, creating jobs and bolstering rural economies in the process. Fully activating the opportunities analyzed in this paper would require a suite of federal policies, which could support a larger federal plan for rebuilding infrastructure and mitigating climate change. Policy opportunities for the new climate economy are shown in Table ES-2. They include policies that can positively impact the nation as a whole as well as policies specifically tailored to rural areas.

Rural America faces dual challenges from flagging economic vitality, exacerbated by the pandemic, and climate change, which is already affecting rural livelihoods (Hales et al. 2014; see Box 1 for a definition of rural America). Efforts to rebuild resilient rural communities would benefit from strategic federal investment that supports both deep decarbonization and the creation of good-paying jobs (Mulligan et al. 2020; Saha and Jaeger 2020). These investments could help usher in a new climate economy for the United States that would achieve economic growth by dealing with the risks associated with climate change (NCE 2018).

There is increasing interest in rebooting struggling rural communities by making strategic investments in the new climate economy. The Biden administration’s American Jobs Plan would target 40 percent of clean infrastructure investments in disadvantaged communities, which have experienced disproportionate levels of pollution, chronic disinvestment, and lack of access to economic opportunities. Many rural communities are likely to fall into this category. Legislative proposals to invest in rural areas to combat climate change and generate economic opportunities for underserved communities also abound. For example, the Climate Stewardship Act, introduced in the Senate in April 2021, would invest billions of dollars in U.S. Department of Agriculture (USDA) programs to restore trees and native vegetation on working lands while prioritizing investments and job opportunities for disadvantaged communities. The proposed American Jobs in Energy Manufacturing Act of 2021 would incentivize domestic manufacturing of clean energy technologies, with targeted investments in rural communities that have witnessed a decline in manufacturing and traditional energy jobs.

There is also increasing evidence that rural Americans support the new climate economy. In a national survey, 54 percent of rural voters said that taking action on climate change was “very” or “pretty” important, with policies that reduce pollution from power plants, incentivize the contribution that agriculture can make to mitigation, and strengthen rural communities against extreme weather events receiving high levels of support (Bonnie et al. 2020). Despite their support for climate action, however, rural voters report feeling “isolated” from the climate policy conversation and feel that many climate policies do not allow rural areas to benefit.

Federal policymakers need to ensure that rural voices are included in U.S. climate policy discussions. Not only do rural voters and rural states wield significant influence on the outcomes of national elections, but rural America matters a lot to the fate of U.S. climate policy. Farmers, ranchers, and forest owners manage large segments of American lands that hold enormous opportunities for mitigation. Natural and working lands currently remove about 800 megatons of carbon dioxide (MtCO₂) per year, or 12 percent of U.S. greenhouse gas (GHG) emissions (EPA 2021), and could remove an additional 540 MtCO₂ annually—equal to current emissions from U.S. agriculture—if trees were restored to ecologically suitable lands, primarily in rural areas (Mulligan et al. 2020). Rural areas are also crucial for clean energy development: 99 percent of all onshore wind capacity in the country is located in rural areas, as is the majority of utility-scale solar capacity (Seigner et al. 2021). Rural communities are, therefore, essential to building robust, equitable, and durable climate policies that harness the power of rural America to address climate change.

This paper aims to support rural-centric climate policy discussions by evaluating the potential economic benefits of federal investment in rural America, including benefits that accrue specifically to economically disadvantaged rural communities.

1.1 Declining Economic Opportunities in Rural America

While urban areas are not uniformly prosperous and rural areas are not uniformly poor, rural America as a whole has been slipping behind its urban counterpart for several decades on metrics including income, educational attainment, access to infrastructure, and job growth (Figure 1). As the United States has urbanized, young people and money have flowed to urban areas, where jobs and educational opportunities tend to exist, while the rural workforce has grown older and less able to access lucrative jobs (Andrews and Reiblich 2020). Simultaneously, traditionally rural industries like farming, mining, and manufacturing have seen workforces shrink due to mechanization and globalization. Boom-and-bust cycles and the transition toward low-carbon energy production have also left rural fossil fuel workers and communities with shrinking economic opportunities (Kopparam 2020). The closure of coal-fired power plants, for instance, has adversely impacted local communities, many of which are in rural areas, that rely on coal plants for tax revenues and jobs (Morris et al. 2019). Adding to economic pain, rural wages have stagnated for the past 50 years across all skill levels and demographics (Ziliak 2019).

Rural households, and particularly low-income households, have higher energy costs, but many cannot afford to invest in energy efficiency upgrades such as weatherization or efficient appliances that can bring savings. Rural households have a median energy burden—percentage of income spent on energy—of 4.4 percent, compared with 3.3 percent for urban households, and low-income households face energy burdens almost three times greater than high-income households (Ross et al. 2018). Electric cooperatives, which serve much of rural America, are often strapped for cash, hindering investment in clean energy programs that can benefit their communities.

In addition, climate change has already begun to affect rural livelihoods. Changing precipitation and temperature patterns are impacting crop growth and distribution of timber species, and these effects are projected to only increase. For rural areas dependent on recreation and tourism, climate change impacts like unpredictable snowfall and sea-level rise harm the resources and activities that draw visitors to the area (Hales et al. 2014). The devastating 2020 wildfire season in the western United States emphasized the increased threat of wildfire that accompanies a hotter, drier climate and endangers rural forest-adjacent communities.

Due in part to existing vulnerabilities, the COVID-19 pandemic has been particularly injurious for the economic health of rural areas. When the pandemic hit in 2020, rural employment had not yet fully recovered from the 2008–09 Great Recession, while urban areas had experienced a 9 percent growth relative to pre-recession levels (Kopparam 2020). The slowdown in economic activity hit some rural areas severely given their higher reliance on industries such as farming, mining, food processing, and tourism, which are highly susceptible to pandemic-induced closures (Mueller et al. 2021). The pandemic has also hit rural communities disproportionately hard in key clean energy employment sectors including efficiency and renewable energy generation, with rural counties shedding more jobs as a share of total employment relative to their urban counterparts (Saha and Cyrs 2021).

Federal support for economic recovery in these communities is now a top priority, especially where these investments can simultaneously address the threat of climate change. Since rural areas tend to have higher poverty rates, have fewer employment opportunities, and be more susceptible to labor market shocks compared with urban areas, federal recovery policies should be designed to address rural communities’ specific challenges and opportunities (Mueller et al. 2021). With state and local governments in many cases experiencing economic shocks in the wake of the pandemic and being forced to cut spending, a failure by the federal government to deliver substantial support to rural communities either directly or through subnational governments risks delaying economic recovery for years to come.

1.1 New Climate Economy Opportunities in Rural America

Investments in the new climate economy are both environmentally and economically sound prospects, with the potential to stimulate job growth and pave the way for long-term economic recovery from the COVID-19 pandemic (Saha and Jaeger 2020; E2 2020). Already, clean energy jobs make up a significant share of total employment in many rural communities (Figure 2), and this trend can be dramatically reinforced and expanded upon during the current decade. By one estimate, 600 gigawatts (GW) of new wind and solar projects projected to be built between 2020 and 2030 could generate US$220 billion in economic benefits, primarily in rural areas, which host 99 percent of onshore wind and a growing share of utility-scale solar projects (Seigner 2021). Energy efficiency improvements can reduce rural households’ energy burdens by 25 percent, representing more than $400 in annual household savings (Ross et al. 2018). Restoration of trees and other natural ecosystems, which are concentrated in rural areas, generated $9.5 billion annually in direct output and an additional $15 billion in indirect spending prior to the pandemic (BenDor et al. 2015).

Clean energy occupations pay higher wages and pose lower formal educational barriers to entry than most jobs nationwide, offering an inclusive economic opportunity for rural workers (Muro et al. 2019). However, not all clean energy jobs offer higher pay or are more unionized than fossil fuel jobs, so policies must ensure a fair transition for fossil fuel workers and communities adversely impacted by the shift to a low-carbon economy.

Taken together, federal investment opportunities analyzed in this paper can make a meaningful contribution to addressing rural economic distress and the climate crisis. The investments considered here, however, will likely not be sufficient on their own to recruit and train the workforce necessary to implement new climate economy pathways. The policies recommended here will also need to include mechanisms to ensure that jobs created provide minimal barriers to entry, are well-paid, offer opportunities for stable employment and benefits, and support unionization. These components will help ensure that the new climate economy will not just create jobs, but sustain worker and community well-being and create equitable opportunities for all.

This analysis focuses on seven opportunities for federal investment across the United States that present significant potential for both rural job creation and emissions mitigation:

• Renewable energy
  • Construction of wind, solar, and other renewable energy resources
• Energy efficiency improvements
  • Technologies and processes that reduce energy consumption, lower energy bills, and decrease emissions in residential, commercial, and industrial buildings
• Energy transmission, distribution, and storage
  • High-voltage transmission lines to integrate the growing share of renewable energy and accommodate increasing demand on the grid from electrification
  • Distribution networks that allow two-way communication between consumers and providers and enable new technologies that reduce cost and save electricity
  • Energy storage technologies to improve grid reliability, meet peak energy demand, and smooth the effects of variable energy resources
• Environmental remediation of abandoned fossil fuel infrastructure
  • Cleaning up abandoned coal mines
  • Plugging and restoring orphaned oil and gas wells
• Tree restoration on federal lands
  • Reforestation on ecologically appropriate federally owned lands by replanting native, climate-resilient species or enhancing natural regeneration
  • Restocking standing federal forests to natural densities where trees have been lost to disease, harvest, or natural disaster by planting trees and/or promoting natural regrowth
• Tree restoration on non-federal lands
  • Reforestation on ecologically appropriate state, local, or private lands by replanting or enhancing natural regeneration
  • Restocking standing non-federal forests as described above
  • Integrating trees into pasture while maintaining livestock production through silvopasture systems
  • Integrating trees into cropland while maintaining crop production through agroforestry systems, including alley cropping systems and windbreaks
• Wildfire risk management
  • Prescribed low-intensity burning
  • Selective thinning of small-diameter trees or other mechanical treatments designed to reduce fuel loads

These opportunities were selected based on three key criteria:

1. Providing significant potential for emissions mitigation and/or increasing resilience in rural communities
2. Offering an attractive return on investment by creating jobs and stimulating economic activity
3. Requiring federal investment to reach the scale needed to provide public benefits

The opportunities described above represent key investment needs for the new climate economy but are not meant to be comprehensive. Other strategies that may reduce emissions and create economic opportunities in rural communities include investments in electric vehicle manufacturing and infrastructure, carbon removal infrastructure like carbon dioxide pipelines and geologic storage wells, and technologies to reduce GHG emissions from agricultural operations, among others. Given its exploratory nature, this initial analysis considers only a limited set of clean energy and land sector decarbonization scenarios. Future work will explore federal investment in additional areas and the potential economic impact on rural communities.

This assessment quantifies the potential economic benefits of federal investments in seven areas of the new climate economy in rural counties. We evaluated and identified opportunities with significant climate benefits and job creation potential, and then determined investment levels required to scale up or expand each opportunity in rural counties. For opportunities in the energy sector, we modeled the economic impacts from an illustrative portfolio of renewable energy, energy efficiency, and transmission, distribution, and storage (TDS) policies and programs. We determined investment needs based on a review of historical funding for existing policies and additional funding needs derived from expert consultation and proposed legislation. We also estimated the leverage effect of federal investment in renewable energy, energy efficiency, and TDS scenarios, and the model includes assumed additional state, local government, and private sector spending. It is important to note though that our leverage assumptions are very conservative and the economic impacts for the three energy sectors result primarily from federal investment. For full detail on the investment level and leverage assumed for each program and policy contained in renewable energy, energy efficiency, and TDS analyses, refer to Appendix J.

The investment needs associated with environmental remediation for abandoned fossil fuel infrastructure are based on total cost of remediation and restoration activities as opposed to specific policies. For full detail on the investment level assumed for orphaned oil and gas wells and abandoned coal mines, refer to Appendix J.

For opportunities in the land sector, we estimated investment needs based on the total cost of achieving desired results across ecologically suitable areas without displacing food or fiber production, rather than basing inputs on specific policies. This analysis derived modeling inputs from county-level data on acreage of opportunity for each land sector pathway; and average cost of implementation per acre. Restocking opportunities were considered only in eastern states with low risk of wildfire and without the concerns of excessive fuel loads that are present in western forests. For more information on methodologies for deriving opportunity acreage and cost, see Appendix K.

Table 1 summarizes the federal investment amounts in the seven areas of the new climate economy, including the assumed rural shares.

Subsequently, BW Research, commissioned by World Resources Institute, used the Economic Impact Analysis for Planning (IMPLAN) input-output economic model to estimate the direct, indirect, and induced effects on jobs; economic value added; employee compensation (e.g., wages, salaries); and local, state, and federal taxes generated nationally and in rural counties. See the glossary for definitions.

We estimate economic impacts in the energy sector for the first five years of robust federal clean energy spending while those in the land sector are distributed over 20 years. This longer time horizon for investment in tree restoration and wildfire mitigation reflects the need for long-term forest management to ensure forest health and tree survival for reforestation and restocking projects, and adequate mitigation of wildfire risk.

We assumed that for each of the seven investment areas, a certain share of the modeled federal investment went to rural counties. We determined this based on a number of factors including existing clean energy county-level labor trends, historical geographic funding patterns, and the geography of a given sector (e.g., location of abandoned coal mines, documented orphan oil and gas wells, or federal forests). For programs targeting rural areas specifically, we allocated the entire federal investment to rural counties in the state. Finally, for the renewable energy, energy efficiency, and TDS sectors only, we made an additional assumption that at least 15 percent of modeled investment would flow to rural counties. We used 15 percent as a modeling construct for the minimum share going to rural areas. This assumption is intended to illustrate the potential if federal investments were allocated to rural areas at a more equitable level; however, it is likely that targeted complementary policies would be required to ensure that funding actually reaches certain regions. At the same time, a rural allocation of funds could be even higher than this minimum share, driven by policy goals to advance racial and economic equity within rural areas and between rural and urban areas. A more detailed description of these methodologies can be found in Appendix J.

To assess the impact of new climate economy investments on economically disadvantaged rural communities, we used the Economic Innovation Group’s Distressed Communities Index (DCI), which uses aggregated employment and wealth metrics to identify economically disadvantaged rural counties (Figure 3). DCI sorts U.S. counties into five quintiles using seven metrics: poverty rate, percent of adults that have not graduated high school, percent of unoccupied housing units controlled for vacation homes, median household income, change in number of employees working in the county from 2014 to 2018, change in number of establishments located in the county from 2014 to 2018, and percent of adults ages 25–54 that are not in the workforce. In this paper, we focus on rural counties in the fourth (at-risk counties) and fifth (distressed counties) quintiles of the DCI to highlight the economic impacts of federal investment on those rural counties. The DCI, and by extension this paper, does not include components for race and public health associated with pollution. Further research should investigate the potential impact of investment on communities and workers of color as well as environmental justice communities.¹

Our analysis primarily examines benefits from federal investments in rural areas and our leverage assumptions for private sector investment are conservative. In reality, though, any of the investment areas we analyzed, including renewable energy and TDS, also experience high levels of private investment. For those, our results may represent only a portion of the job creation and economic benefits that can be realized in the coming years. Despite this, federal investments have a major role to play in catalyzing economic growth and creating rural jobs for all sectors in the new climate economy.

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.

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.

The U.S. pathway to a low-carbon future has gained significant momentum as the Biden administration and Congress resume work toward ambitious climate goals. This analysis shows that rural America stands to benefit significantly from federal investment in seven key areas of the new climate economy. Of a total of $55 billion in annual federal investment in the new climate economy, an estimated $14.9 billion flowing specifically to rural communities would create the following:

• Nearly 260,000 rural jobs that would last for at least five years (a total of 1.3 million job-years), spread across every region of the country
• $21.7 billion per year in value added to rural economies, including $12.9 billion in employee compensation and $1.6 billion in local, state, and federal tax revenues
• 118,500 rural jobs annually and added value of $9.8 billion per year specifically in economically disadvantaged communities
• Approximately 17.5 jobs and $1.5 million in value added in rural counties for every $1 million in federal investment

For the new climate economy to support economic growth and vitality across the United States, federal policymakers will need to ensure that national climate policies address the needs and priorities of rural communities as well as urban ones. These decisions will ultimately determine how fast clean industries grow and the extent to which the resulting economic benefits are well distributed. Federal policy proposals highlighted in our analysis provide a roadmap that can facilitate the development of thriving rural economies.

Our analysis focuses only on direct economic impacts, but these benefits will be further amplified by reductions in emissions that damage people’s health and contribute to climate change. Further research on the economic benefits of investments in the new climate economy in areas not covered in this paper—including electric vehicle manufacturing and infrastructure development, carbon removal infrastructure like carbon dioxide pipelines and geologic storage wells, and technologies to reduce greenhouse gas emissions from agricultural operations—could paint a more comprehensive picture of potential benefits accruing to rural America. Finally, deeper analysis of how federal policies can specifically target underserved rural communities and communities and workers of color is needed.

The new climate economy can help bridge the rural-urban divide by bringing economic opportunities to regions and communities eager for jobs and economic growth while helping the nation meet the ambitious decarbonization goals that can help unlock a prosperous future for all.

agroforestry: Agroforestry encompasses practices that combine agriculture and trees to produce benefits such as improved soil health, diversified farm revenue (USFS 2012), improved livestock health (NAC n.d.), improved water quality, and increased carbon sequestration (Montagnini and Nair 2004). Specific agroforestry practices include silvopasture, alley cropping, and windbreaks or riparian buffers.

direct effects: Direct effects represent the initial change in earnings or jobs created by new input activities in the initially changed industries. This is the first round of impacts. An example of a direct effect are the jobs created in the heating, ventilation, and air conditioning (HVAC) industry to make efficiency upgrades targeted by a federal program.

employee compensation: This is the total value of payroll and includes wages or salaries, additional benefits, and payroll taxes. Employee compensation is one of the four components of gross domestic product. The other elements are proprietor income, taxes on production and imports, and other property income.

indirect effects: Indirect effects are those throughout the supply chain resulting from the direct change. This is the second round of impacts. An example of an indirect effect are the jobs created at a high-efficiency boiler manufacturer when an HVAC installation firm purchases its products.

induced effects: Induced effects result from the new earnings created by the direct and indirect effects. These earnings are injected into the economy when workers spend their incomes on any kind of good or service in the region.

private financing: This refers to debt-leveraged funding from financial institutions. The money paid out by financial institutions creates the initial construction impacts.

reforestation: Reforestation describes the process of planting trees or naturally regenerating trees on previously forested land. Reforestation does not include replanting trees after they have been logged for commercial use.

renewable: A source of energy is renewable if it comes from natural sources or processes, like wind and solar, and is constantly replenished.

restocking: Restocking describes the practice of increasing the density of existing forests and/or replanting trees after they have been harvested. Restocking differs from reforestation in that restocking takes place in established forests to restore areas where trees have been lost due to disease, environmental factors, or harvesting.

rural counties: A county is defined as rural according to the U.S. Department of Agriculture 2013 Rural-Urban Continuum Codes. Rural counties fall on the spectrum of scores from 4 to 9.

taxes on production and imports (TOPI): These include the total value of sales, excise, property, and severance taxes; customs duties; motor vehicle licenses; and special assessments. Subsidies are subtracted. They do not include profit taxes. In some instances, TOPI are negative, implying that the value of subsidies is greater than the taxes generated by the industry.

total economic investment: The amount of money infused into the economy after private financing leverage and investments are considered.

tree restoration: Tree restoration describes a set of practices that restores healthy forests and tree cover to historically forested areas. These practices include reforestation and restocking degraded forests and establishing agroforestry systems (see above).

urban communities: A county is defined as urban according to the U.S. Department of Agriculture 2013 Rural-Urban Continuum Codes. Urban counties fall on the spectrum of scores from 1 to 3.

value added: This represents the difference between total output and the cost of intermediate inputs (consumption of goods and services purchased from other industries or imported). Value added is equivalent to an industry’s contribution to gross domestic product.

wildfire risk management: Wildfire risk management involves forest management strategies that mimic the effects of wildfire by thinning overstocked forests and/or using prescribed burns to reduce ground-level fuels. While fuel treatments such as thinning and prescribed burning do diminish carbon stored in forests, they are intended to prevent a far greater release of carbon from high-intensity conflagrations that kill all trees in a stand (Dore et al. 2010).

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We would like to thank those that provided valuable inputs, insights, and feedback for this paper, including Juan-Carlos Altamirano, James Barrett, Tyson Bertone-Riggs, Lori Bird, Christine Cadigan, Aimée Christensen, Susan Cook-Patton, Christina Deconcini, David Dreher, Margaret Farrell, Todd Gartner, Kareem Hammoud, Heidi Huber-Stearns, Joel Jaeger, Claire Jahns, Lesley Jantarasami, Keefe Keeley, James W. Kirby Jr., Zach Knight, Arjun Krishnaswami, Dan Lashof, Ruth McCormick, Kerry Metlen, Ugbaad Kosar, Jillian Neuberger, Luke Plant, Daniel Raimi, Martha Rogers, Andrew Sand, Rebecca Shively, Mary Shoemaker, Clea Schumer, Marek Smith, Rachel Smith, Lowell Ungar, John Watts, and Patrick Whitty.

We also wish to thank BW Research Partnership, especially Philip Jordan and Mitchell Schirch, for conducting the economic impact assessment demonstrating the potential for job creation and other economic benefits in rural America.

Thanks also to Kenan Fikri and Kennedy O’Dell from Economic Innovation Group for providing data and documentation behind their Distressed Communities Index in support of our assessment.

Finally, thanks to Bill Dugan, Emily Matthews, Emilia Suarez, Rosie Ettenheim, Romain Warnault, and Sarah DeLucia for providing production, design, and editing support; Matt Herbert, Molly Bergen. and Carrie Dellesky for providing communications and engagement support; and Matthew Cronin for providing overall project support.

This project was made possible through the generous support of Ruth McCormick Tankersley Charitable Trust.

Devashree Saha is a senior associate at WRI.Contact: devashree.saha@wri.org

Alex Rudee was a manager in WRI’s U.S. Climate Initiative.

Haley Leslie-Bole is a research analyst in the WRI Climate Program.Contact: haley.leslie-bole@wri.org

Tom Cyrs is a research associate in the WRI Climate Program.Contact: tom.cyrs@wri.org

1. 1Environmental justice communities are those most impacted by environmental risks and harms. They face a disproportionate exposure to environmental hazards.
2. 2While the full federal investment and corresponding economic benefits for the new climate economy were modeled over a five-year period, the land sector pathways (including tree restoration on federal lands, tree restoration on non-federal lands, and wildfire risk mitigation) offer the opportunity for more extended federal investment and economic benefits. The benefits for these pathways were modeled over a 20-year period. For all pathways, annual job creation and other economic benefits would be expected to extend for as long as federal investments continue.
3. 3The REAP program offers guaranteed loans and grants to rural businesses and farms for qualifying energy projects, including wind, solar, and biomass generation.
4. 4Land is deemed suitable for reforestation where significant forest cover occurred prior to European settlement but current canopy cover is less than 25 percent, as described by Cook-Patton et al. (2020). Forest land is deemed suitable for restocking where canopy cover exceeds 25 percent (to avoid double-counting with reforestation opportunities) but current basal area stocking levels are below 60 percent, the minimum level at which the U.S. Forest Service considers forest land to be fully stocked.
5. 5We estimated the potential for carbon removal from tree restoration using methods consistent with Mulligan et al. (2020). Potential from reforestation was derived from Cook-Patton et al. (2020), while potential from restocking uses area data from the U.S. Forest Service (2021), sequestration rates from Hoover and Heath (2011), and additional potential estimates from Sohngen (2018). Mulligan et al. (2020) estimate the full opportunity for carbon removal to be achievable within 20 years, so we estimated the potential in 2030 to be one-half of the full opportunity.
6. 6We assessed suitability for reforestation and restocking opportunities and their corresponding carbon removal potential in the same way as for tree restoration on federal lands. We assumed pasture land was suitable for silvopasture wherever it historically supported forest cover (Cook-Patton et al. 2020), with the carbon removal potential estimated using sequestration factors from COMET-Planner (Swan et al. 2015). We determined land suitability and carbon removal potential associated with other agroforestry systems, such as alley cropping and windbreaks, according to the methodology from Fargione et al. (2018).