A just clean energy transition for New York state – proposals include protection of pension benefits for displaced workers

On November 13,  the Political Economy Research Institute (PERI) at the University of Massachusetts published a new study by authors Robert Pollin, Heidi Garrett-Peltier and Jeannette Wicks-Lim, all well-established experts on the job creation benefits of renewable energy.  Clean Energy Investments for New York State: An Economic Framework for Promoting Climate Stabilization and Expanding Good Job Opportunities    examines the benefits of large-scale investments in renewable energy and energy efficiency for New York State, and proposes a Just Transition policy framework to support such clean energy investments. Their analysis is based on an estimate of a 40 percent decline  in production activity and employment in fossil fuel industries in New York State as of 2030. They examine the labour market and present detailed statistics about the compensation and benefits, unionization, educational qualifications, gender and race of the small percentage (0.15 percent) of the total state workforce who worked in fossil fuel dependent industries in 2014.

In Chapter 8, they  propose a Just Transition program guaranteeing pensions and reemployment, as well as providing income, training and relocation support for workers. They also propose support for fossil-fuel dependent communities, primarily through channeling new clean energy investments to the affected communities.  The report cites the model of the Worker and Community Transition program that operated through the U.S. Department of Energy from 1994 – 2004.

Because of the level of detail in the report, (including information about the unfunded pension liabilities of the relevant companies), the authors are able to make very specific policy recommendations and also provide cost estimates. For example, they call on the State government to mandate full funding of pensions via state law, or through coordination with the federal Pen­sion Benefit Guarantee Corporation (PBGC), to the extent that companies could be prohibited from paying dividends or financing share buybacks,  or the state (in cooperation with PBGC) could place liens on company assets when pension funds are underfunded.

The report estimates a total cost of approximately $18 million per year to fund 100 percent compensation insurance for five years,  retraining for 2 years, and relocation support for workers. This is based on an average of  $270,000 – $300,000 per worker per year, for  the estimated  67 displaced workers likely to be eligible.

Interesting context for this report appears in an interview with Robert Pollin in the  Albany Times Union, “N.Y. must try harder to become a clean energy beacon.

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