The energy transition as fiscal rupture: Public services and resilience pathways in a coal company town

Abstract

In fossil-fuel dependent communities and regions, decarbonization of the U.S. energy system has triggered processes of deindustrialization and economic restructuring. Recent scholarship has emphasized the risks associated with fiscal dependence on fossil fuel revenue for such areas, however, the specific ways fiscal risk affects local conditions have not yet been described. This paper responds to calls for increased attention to social and economic disruptions experienced in legacy fossil fuel communities. We apply community resilience and transition theory to a case study of the fiscal impacts of the coal transition in Colstrip, Montana, USA. Our mixed-methods approach incorporates historical narrative, fiscal data, and policy analysis with key informant interviews. The study observes the historical decision-nodes leading to present-day dependence and characterizes the resulting fiscal impact of the coal industry decline and decision-making environment regarding public services and infrastructure. We find that local government's fiscal dependence on coal revenue contributes to path dependencies in service provision which undermine community resilience and development potential in the context of transitional rupture. The fiscal policy landscape creates a fragmented and uncoordinated decision-making environment that drains limited resources and capacity and creates barriers to consensus-building. This research highlights the need for formal transition impact assessments to support decision-making in place-based transitions and provides a starting template for an associated public revenue analysis.