Community-Centered Just Transition from Fossil Fuels to Renewable Energy
By: Hannah Frizzell
The global transition from fossil fuels to renewable energy has accelerated significantly in recent years. Although the transition was initially driven by environmental concerns, this shift is now equally motivated by economic incentives. Countries such as China have heavily invested in renewable infrastructure to reduce long-term costs and enhance energy independence. Contrarily, the transition in the United States has been anything but linear. Although the West Coast has rapidly incorporated solar and wind power, the Rust Belt remains tied to the fossil fuel industry.
A “just transition” is the policy framework that supports a shift to a low-carbon, environmentally sustainable economy that is fair and inclusive. This transition in the Rust Belt continues to face multiple challenges—such as shifting federal priorities, politicizes skepticism of renewables, and structural barriers to adoption. Moreover, the fossil fuel industry not only provides employment opportunities to these communities but also funds local infrastructure, educational opportunities, and community life. Overall, this economic and societal dependence on fossil fuels creates unique obstacles for the Rust Belt communities.
For the Rust Belt to justly transition from fossil fuels to renewable energies, the policy framework must prioritize more than institutional and economic stability and must also incorporate community empowerment and place-based assessments. Strong and well-developed institutions play a vital role in establishing and implementing regulatory frameworks for clean energy and environmental policies. Political scientists theorize that successful renewable energy transitions depend not only on environmental and energy policies but on strong and effective institutions. Although economists agree that institutional stability is important to a just transition, they contend that a stable financial sector within the clean energy industry is vital. A stable financial sector permits the comprehensive framework to build its plans on a monetary foundation, allowing investors to confidently invest within the renewable regime.
The Inflation Reduction Act ("IRA") consolidates these policy dynamics into one comprehensive framework aimed at providing place-based incentives for the financial sector to invest in areas historically dependent on fossil fuel industries known as “energy communities.” Central to these incentives were the Investment Tax Credit ("ITC") and Production Tax Credit ("PTC"), through which energy projects would receive a 10% tax credit bonus that would significantly lower project costs and increase their overall value (IRC §§ 45Y and 48E). For the ITC and PTC bonuses to vest in the energy projects, companies must meet the Prevailing Wage and Apprenticeship ("PWA") requirements determined by the Secretary of Labor. The PWA required taxpayers to ensure that laborers and mechanics employed in the construction, alteration, or repair work were not paid less than the prevailing wage rate for work performed with respect to a qualified facility for the particular tax incentives. Once eligible for the base ITC or PTC, projects could also qualify for the Domestic Content Bonus. The Domestic Content Bonus is an additional tax credit that energy projects receive if they purchase American materials, such as steel, iron, solar panels, and wind towers.
Unfortunately, the IRA’s implementation is now limited due to the shift in federal leadership. The One Big, Beautiful Bill Act ("OBBB"), signed into law by President Trump, significantly weakened the IRA’s clean energy incentives. Under the IRA, energy projects commencing as late as 2031-2034 could fully qualify for ITC and PTC bonuses. However, the OBBB now imposes an accelerated phase-out, requiring clean energy projects to commence construction by the end of 2027 to receive the base credits offered by the ITC or PTC. Additionally, the OBBB severely restricts the Domestic Content Bonus. If a project obtains foreign materials from a Prohibited Foreign Entity, such as China, the project loses not only its Domestic Content Bonus but also any ITC or PTC bonuses.
Despite the OBBB’s rollback on clean energy incentives, some Rust Belt regions continue to pursue a just transition framework, placing a greater emphasis on community empowerment and place-based assessment. For example, Southern West Virginia is a region that suffered not only from a dramatic decline in coal production but also from a targeted deployment of opioids that made the region ground zero for the national opioid epidemic. While the passing of the IRA helped catalyze momentum for the clean energy development, it also required the region to expand in partnerships to support sustainable, community-trust growth.
To begin repairing this region that has been vastly affected by socioeconomic disruptions, West Virginia leaders partnered with institutional and industry leaders to transform 21 Southern West Virginia counties into a hub for clean energy jobs. This transformation is documented through the Appalachian Climate Technology (the "ACT Now") portfolio, which recognizes the unique dedication and commitment many West Virginians feel toward their state. Community-based organizations such as Coalfield Development, West Virginia Community, and West Virginia Generation have been the driving forces behind ACT Now, working to address systemic challenges for rural development from local bottom-up directives, rather than through top-down federal mandates.
The community-based organizations expanded their partnerships to private institutions, such as West Virginia University and Marshall University, as well as unions representing carpenters, mine workers, and utility workers. With this strong institutional and financial stability across the coalition, ACT was awarded the federal Build Back Better Regional Challenge ("BBBRC") grant. Key projects ACT is now pursuing include transforming abandoned mines to sustainable lands, rewiring Appalachia to expand solar energy access, and developing a LIFT Center, which is a manufacturing plant being transformed into a multi-purpose center for job training, battery research, and repurposing EV batteries for solar energy storage. ACT Now’s efforts suggest that a just transition succeeds when community empowerment and place-based assessment are central to the framework, supported by institutional and financial stability.
This article was written by PECC's Energy and Climate Law Scholar Hannah Frizzell, a law student at Elisabeth Haub School of Law at Pace University. It was originally published on December 22, 2025, in Volume 1, Issue 3 of the R.E.A.C.T. by PECC Newsletter.
Editors: Mercè Martí I Exposito, Frances Gothard, Carington Lowe