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81. Universal Representation: Systemic Benefits and the Path Ahead

Author:
Lindsay Nash
Publication Date:
08-2019
Content Type:
Journal Article
Journal:
Journal on Migration and Human Security
Institution:
Center for Migration Studies of New York
Abstract:
At a time when politics, financial considerations, and a push for expediency put pressure on the US immigration system, it can be difficult to have faith in the adjudicatory process. Case resolution quotas, directives that constrain courts’ ability to render justice in individual cases, and executive decisions that contract immigration judges’ discretion contribute to an immigration system that looks less and less like judicial adjudication of some of the highest-stakes cases in our legal system and more like a ministerial claims-processing scheme. A ray of hope exists, however, in the proliferation of public defender–style systems that offer universal representation to those facing deportation. This essay describes the genesis and expansion of the universal representation movement — a project based on the idea that indigent individuals should be entitled to counsel regardless of the apparent merits or political palatability of their case. It describes the benefits of such a program to the immigration adjudication system writ large. Beyond the oft-cited increase in success rates for individuals represented and the benefits to the communities in which such programs are located, universal representation promotes the integrity of the court system and strengthens an adjudicatory procedure that, for too long, has functioned primarily to expeditiously churn through cases. Finally, looking forward, it considers some of the challenges this movement faces as it grows and it identifies areas for further expansion.
Topic:
Immigration, Border Control, and Legal Theory
Political Geography:
United States and North America

82. Putting Americans First: A Statistical Case for Encouraging Rather than Impeding and Devaluing US Citizenship

Author:
Donald Kerwin and Robert Warren
Publication Date:
12-2019
Content Type:
Journal Article
Journal:
Journal on Migration and Human Security
Institution:
Center for Migration Studies of New York
Abstract:
This article examines the ability of immigrants to integrate and to become full Americans. Naturalization has long been recognized as a fundamental step in that process and one that contributes to the nation’s strength, cohesion, and well-being. To illustrate the continued salience of citizenship, the article compares selected characteristics of native-born citizens, naturalized citizens, legal noncitizens (most of them lawful permanent residents [LPRs]), and undocumented residents. It finds that the integration, success, and contributions of immigrants increase as they advance toward naturalization, and that naturalized citizens match or exceed the native-born by metrics such as a college education, self-employment, average personal income, and homeownership. It finds that: Naturalized citizens enjoy the same or higher levels of education, employment, work in skilled occupations, personal income, and percentage above the poverty level compared to the native-born population. At least 5.2 million current US citizens — 4.5 million children and 730,000 adults — who are living with at least one undocumented parent obtained US citizenship by birth; eliminating birthright citizenship would create a permanent underclass of US-born denizens in the future. Requiring medical insurance would negatively affect immigrants seeking admission and undocumented residents who ultimately qualify for a visa. About 51 percent of US undocumented residents older than age 18 lack health insurance. In 2017, about 1.2 million undocumented residents lived with 1.1 million eligible-to-naturalize relatives. If all the members of the latter group naturalized, they could petition for or expedite the adjustment or immigration (as LPRs) of their undocumented family members, including 890,000 “immediate relatives.” Their naturalization could put 11 percent of the US undocumented population on a path to permanent residency. The article also explores a contradiction: that the administration’s “America first” ideology obscures a set of policies that impede the naturalization process, devalue US citizenship, and prioritize denaturalization. The article documents many of the ways that the Trump administration has sought to revoke legal status, block access to permanent residence and naturalization, and deny the rights, entitlements, and benefits of citizenship to certain groups, particularly US citizen children with undocumented parents. It also offers estimates and profiles of the persons affected by these measures, and it rebuts myths that have buttressed the administration’s policies. For example, the Trump administration and restrictionist legislators have criticized the US immigration system’s emphasis on family reunification for its supposed failure to produce skilled workers. Yet the article finds that: The current immigration system, which prioritizes the admission of the nuclear family members of US citizens and LPRs, yields a legal foreign-born population that has occupational skills equal to those of the native-born population. The legal foreign-born population living in 24 US states and Washington, DC, and those from 94 source countries have higher percentages of skilled workers than the overall population of native-born workers.
Topic:
Immigration, Citizenship, and Domestic Policy
Political Geography:
United States and North America

83. DACA and the Supreme Court: How We Got to This Point, a Statistical Profile of Who Is Affected, and What the Future May Hold for DACA Beneficiaries

Author:
Daniela Alulema
Publication Date:
12-2019
Content Type:
Journal Article
Journal:
Journal on Migration and Human Security
Institution:
Center for Migration Studies of New York
Abstract:
In June 2012, the Obama administration announced the establishment of the Deferred Action for Childhood Arrivals (DACA) program, which sought to provide work authorization and a temporary reprieve from deportation to eligible undocumented young immigrants who had arrived in the United States as minors. Hundreds of thousands of youth applied for the program, which required providing extensive evidence of identity, age, residence, education, and good moral character. The program allowed its recipients to pursue higher education, to access more and better job opportunities, and to deepen their social ties in the United States. This article provides a statistical portrait of DACA recipients based on administrative data from US Citizenship and Immigration Services (USCIS) and estimates drawn from the 2017 American Community Survey (ACS) Census data. It finds the following: As of September 30, 2019, there were 652,880 active DACA recipients. Sixty-six percent of recipients are between the ages of 21 and 30. The top five countries of birth for DACA recipients are Mexico (80 percent), El Salvador (4 percent), Guatemala (3 percent), Honduras (2 percent), and Peru (1 percent). DACA recipients reside in all 50 states and Washington, DC, and in US territories including Puerto Rico, Guam, and the Virgin Islands. The top five states with the highest number of DACA recipients are California (29 percent), Texas (17 percent), Illinois (5 percent), New York (4 percent), and Florida (4 percent). Eighty-one percent of DACA recipients has lived in the United States for more than 15 years. Six percent is married to US citizens, 4 percent to lawful permanent residents (LPRs), and 13 percent to undocumented immigrants. Among US-born children younger than 18 years, 346,455 have at least one DACA parent. Fifty-five percent of DACA recipients graduated from high school, 36 percent has some college education, and 7 percent a bachelor’s degree or higher. Ninety-five percent is employed. The Trump administration rescinded the DACA program in September 2017, leaving recipients and their families in a legal limbo. Federal litigation led to a nationwide preliminary injunction and DACA’s partial reinstatement for existing recipients. At this writing, the case is before the US Supreme Court, which will determine the program’s fate. Beyond its statistical portrait, the article provides testimonies from DACA recipients who recount how the program improved their lives and their concerns over its possible termination. It also provides recommendations for Congress, local and state governments, and immigration advocates. In particular, it recommends passage of legislation that would create a path to citizenship for DACA recipients and programs and policies to support and empower young immigrants.
Topic:
Immigration, Border Control, and DACA
Political Geography:
United States and North America

84. Electric Vehicle Charging in China and the United States

Author:
David Sandlow and Anders Hove
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
At least 1.5 million electric vehicle (EV) chargers have now been installed in homes, businesses, parking garages, shopping centers and other locations around the world. The number of EV chargers is projected to grow rapidly as the electric vehicle stock grows in the years ahead. The EV charging industry is a highly dynamic sector with a wide range of approaches. The industry is emerging from infancy as electrification, mobility-as-a-service and vehicle autonomy interact to produce far-reaching changes in transportation. This report compares EV charging in the world’s two largest electric vehicle markets -- China and the United States – examining policies, technologies and business models. The report is based on more than 50 interviews with industry participants and a review of the Chinese- and English-language literature. Findings include: 1. The EV charging industries in China and the United States are developing largely independently of the other. There is little overlap among the key players in the EV charging industries in each country. 2. The policy frameworks with respect to EV charging in each country differ. The Chinese central government promotes the development of EV charging networks as a matter of national policy. It sets targets, provides funding and mandates standards. Many provincial and local governments also promote EV charging. The United States federal government plays a modest role in EV charging. Several state governments play active roles. 3. EV charging technologies in China and the US are broadly similar. In both countries, cords and plugs are the overwhelmingly dominant technology for charging electric vehicles. (Battery swapping and wireless charging have at most a minor presence.) China has one nationwide EV fast-charging standard, known as China GB/T. The US has three EV fast charging standards: CHAdeMO, SAE Combo and Tesla. 4. In both China and the United States, many types of businesses have begun to offer EV charging services, with a range of overlapping business models and approaches. A growing number of partnerships are emerging, involving independent charging companies, auto manufacturers, utilities, municipalities and others. The role of utility-owned public chargers is larger in China, especially along major long-distance driving corridors. The role of automaker EV charging networks is larger in the United States. 5. Stakeholders in each country could learn from the other. US policymakers could learn from the Chinese government’s multiyear planning with respect EV charging infrastructure, as well as China’s investment in data collection on EV charging. Chinese policymakers could learn from the United States with respect to siting of public EV chargers, as well as US demand response programs. Both countries could learn from the other with respect to EV business models. As the demand for EV charging grows in the years ahead, continued study of the similarities and differences between approaches in China and the United States can help policymakers, businesses and other stakeholders in both countries and around the world.
Topic:
Science and Technology, Infrastructure, Green Technology, and Electricity
Political Geography:
United States, China, Asia, and North America

85. Interactions between a Federal Carbon Tax and Other Climate Policies

Author:
Justin Gundlach, Ron Minsk, and Noah Kaufman
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
Putting a price on carbon is a critical part of a low-cost strategy for reducing greenhouse gas (GHG) emissions, and a national carbon tax is a rare example of a climate change policy that has found bipartisan support in the United States. In 2018, legislation establishing a carbon tax was proposed by Democrats, Republicans, and bipartisan groups of US congressmen. However, while passing a carbon tax would certainly prove a significant step toward slashing emissions, simply adding a carbon tax to current policies is unlikely to achieve an emissions target at the lowest cost. Designing a carbon tax that contributes to achieving greenhouse gas reduction targets effectively and efficiently will require an examination of whether other new policies are also needed and whether existing policies can or should be changed or eliminated. With more proposals expected in 2019, such an examination is critical to ensuring both sufficient emissions reductions and an efficient set of policies that keep costs in check for taxpayers. As part of a broader carbon tax research program at the School of International and Public Affairs Center on Global Energy Policy at Columbia University, we have developed a framework for considering the interactions between a federal carbon tax and other policies that influence greenhouse gas emissions. Toward the goal of helping to design better policies, we identify policies and programs that are “complementary” to a carbon tax or “redundant.” A policy is defined as complementary if it: enables more cost-effective reductions of carbon dioxide emissions than a carbon tax would achieve on its own; or reduces GHG emissions and achieves a separate policy objective more cost-effectively than a federal carbon tax would on its own. Conversely, a policy is defined as redundant with a federal carbon tax if it leads to additional costs to society without achieving additional emissions reduction. In developing this framework, we recognize that real-world policies often do not fall cleanly into either category and that neither specifying the framework nor making the categorizations is an exact science. It is often difficult to identify a policy’s objective or evaluate its cost-effectiveness. In addition, the extent to which a policy complements a carbon tax depends on the nature of the carbon tax. Most obviously, with a lower carbon tax rate, fewer emission reductions would be achieved, and additional policies may be needed to make up the difference between the outcome and a science-based emissions reduction target. The results of the work, highlighted in the following table, indicate a relatively large number of policies can complement a carbon tax, such as those that support innovation in low-carbon technologies, tackle behavioral barriers to more efficient energy use, or improve public infrastructure and address barriers to reducing emissions unrelated to the price-related barriers addressed by a carbon tax. Conversely, the paper identifies regulations that force entities that pay the carbon tax to take specific actions to reduce their emissions, such as Environmental Protection Agency regulations of stationary sources of carbon dioxide emissions under section 111 of the Clean Air Act, as redundant with the carbon tax. The paper does not recommend which policies should be eliminated, changed, or added but intends to provide policy makers with information that will help them make these decisions.
Topic:
Climate Change, Science and Technology, Green Technology, and Carbon Tax
Political Geography:
United States

86. Transatlantic Sanctions Policy : From the 1982 Soviet Gas Pipeline Episode to Today

Author:
Richard Nephew
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
Though many commentators have suggested that the Trump administration’s approach with respect to sanctions threats against Europe is “unprecedented,” the relative comity in US-European sanctions policymaking in recent years may be the aberration. The United States and Europe have often disagreed about whether, when, and how to impose sanctions against even common adversaries and in order to resolve mutually recognized problems. One of the most serious examples of this occurred in 1982 when the United States and its European allies broke sharply over the US decision to impose sanctions on the Soviet Union over the crackdown on the Solidarity Movement in Poland. The crisis that emerged tested the NATO Alliance, European governments, and the Reagan administration. This paper reviews the 1982 example and then sets some lessons from it against the current US-European relationship. It offers an assessment not only of the changing political, economic, and social factors that have contributed to greater compliance with US sanctions dictates on the part of Europe over the last few years, but also the relatively brittle nature of this cooperation. It underscores that, though the United States may be in a relatively predominant economic position at present, this situation may not and likely will not persist indefinitely. From this perspective, it concludes with three recommendations for how to modify current US sanctions practice in order to help manage partner concerns and avoid future crises. Adopting a process more akin to the Federal Register notice procedure for new sanctions programs. There is a yawning need for more consultation in advance of US sanctions decisions that could have major market moving and alliance shaking potential. It is not necessary, nor would it be prudent, to have a process that required public scrutiny of individual or entity asset freeze scenarios, but for other, more broad sanctions initiatives, it would help to avoid unintended consequences and ensure a more comprehensive debate. Exceptions could also be made to this rule in the event of a legitimate emergency. Establishing an independent commission to evaluate US sanctions policies and challenges. Congress should set up an independent, bipartisan commission to examine the issue of US sanctions policy now and for the next twenty-five years. Its assignment would be to evaluate how sanctions have been used in the recent past, the international operating environment for sanctions now, and the dimensions of the sanctions policy challenge in the future. Improving congressional oversight of the sanctions process. Congress should also require evaluation reports for individual sanctions regimes as a standard part of the executive branch’s use of the International Emergency Economic Powers Act (IEEPA). Of course, similar requirements ought to be considered a standard part of congressionally mandated sanctions as well.
Topic:
Foreign Policy, Sanctions, and Global Political Economy
Political Geography:
United States and Europe

87. The Risk of Fiscal Collapse in Coal-Reliant Communities

Author:
Adele Morris, Noah Kaufman, and Siddhi Doshi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
If the United States undertakes actions to address the risks of climate change, the use of coal in the power sector will decline rapidly. This presents major risks to the 53,000 US workers employed by the industry and their communities. 26 US counties are classified as “coal-mining dependent,” meaning the coal industry is a major employer. In these areas, the industry is also an important contributor to local government finances through a complex system of property, severance, sales, and income taxes; royalties and lease bonuses for production on state and federal lands; and intergovernmental transfers. While climate-related risks to corporations have received scrutiny in recent years, local governments—including coal-reliant counties—have yet to grapple with the implications of climate policies for their financial conditions. Importantly, the risks from the financial decline of coal-reliant counties extend beyond their borders, as these counties also have significant outstanding debts to the US municipal bond market that they may struggle to repay. To be sure, national climate policy in the United States is uncertain. Experts have long recommended strong policy action to reduce emissions, and for years, policy makers have largely ignored their advice. Nevertheless, with growing support by the public and policy makers, meaningful climate policy in the United States may be on the horizon, and those dependent on coal should be looking ahead to manage their risks. This paper examines the implications of a carbon-constrained future on coal-dependent local governments in the United States. It considers the outlook for US coal production over the next decade under such conditions and explores the risk this will pose for county finances. The paper also considers the responsibilities of jurisdictions to disclose these risks, particularly when they issue bonds, and the actions leaders can take to mitigate the risks. In short, the paper finds the following: ● Coal production in the United States fell by one-third between 2007 and 2017. Projections of the US energy system show this decline continuing gradually under current policies. However, even a moderately stringent climate policy could create existential risks for the coal industry, with potential declines in production of around 75 percent in the 2020s. ● A careful look at three illustrative counties shows that coal-related revenue may fund a third or more of their budgets. The exposure is compounded because school districts and other special districts within the counties also receive coal-dependent revenue. The complex system of local revenue instruments and intergovernmental transfers plus a lack of sufficiently detailed budget data makes it difficult to parse out just how reliant jurisdictions are on the coal industry. ● Estimates of the direct linkages between the coal industry and county budgets will almost certainly understate the risks because lost economic activity and jobs will have ripple effects across the economy. Case studies show that the rapid decline of a dominant industry has led to downward spirals and eventual collapses of local governments’ fiscal conditions, including the inability to raise revenue, repay debt, and/ or provide basic public services. ● Coal-dependent communities have a variety of outstanding bonds, and the risk of collapse of the coal industry threatens their ability to repay them. Despite regulations requiring disclosures to reflect risks to the financial health of municipalities, our review of the outstanding bonds indicates that municipalities are at best uneven and at worst misleading (by omission) in their characterizations of climate-related risks. Ratings reports are not much better than official statements in describing the risks associated with the exposure of some local governments to the coal industry. ● Climate policies can be combined with investments in coal-dependent communities to support their financial health. A logical source of funding for such investments would be the revenues from a price on carbon dioxide emissions, a necessary element of any cost-effective strategy for addressing the risks of climate change. A small fraction of revenue from a federal carbon price in the United States could fund billions of dollars in annual investments in the economic development of coal-dependent communities and direct assistance to coal industry workers. ● In considering reforms, several questions emerge for stakeholders. These include whether regulators should develop additional requirements for the disclosure of risks from future climate policies; whether ratings agencies should increase attention to the risks to local governments of climate policies; and whether stakeholders in the municipal bond market, such as borrowers, insurers, and underwriters, are appropriately accounting for risks to the coal industry.
Topic:
Climate Change, Energy Policy, Coal, and Domestic Policy
Political Geography:
United States

88. PG&E: Market and Policy Perspectives on the First Climate Change Bankruptcy

Author:
John Macwilliams, Sarah Lamonaca, and James Kobus
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
The Pacific Gas and Electric (PG&E) bankruptcy, which was caused by liabilities resulting from massive wildfires, has widely been called the first climate change bankruptcy. It will likely not be the last, as climate change exacerbates natural disasters, leading to more frequent and intense wildfires, storms, and flooding. Wildfires alone could become up to 900 percent more destructive in certain regions by midcentury, and utility assets will also be increasingly exposed to threats stemming from hurricanes, rising sea levels, and other climate-related events. These extreme weather events will increase costs to utility-sector stakeholders, including investor-owned utilities, state and local governments, ratepayers, and taxpayers. These risks could place financial stress on utility companies, drive up electricity rates, crowd out essential investment in renewable energy and grid upgrades, and disrupt service. In this paper, Columbia University’s Center on Global Energy Policy reviews and analyzes the PG&E bankruptcy, assesses how capital markets have reacted to the bankruptcy through the lens of valuations in the US utility sector, and discusses policy implications of California’s recent legislative response to wildfire risk. This paper examines market indicators to assess investor expectations of climate risk exposure and likely cost allocation. Neither debt nor equity markets suggest widespread concern about climate risk in the utility sector. In the absence of strong market signals to encourage climate risk mitigation, the authors find that policy frameworks are needed to ensure that companies make necessary preventative investments and to define how costs will be allocated among stakeholders. This paper also reviews a recently passed California bill aimed at achieving these objectives and the lessons and best practices it offers for other policy makers. In short, the paper finds the following: Market indicators suggest that the California wildfires and subsequent PG&E bankruptcy have not caused imminent concern about climate risks in the utility sector. Equity valuations for the sector remain strong, with a utility stock index trading at a higher-than-average premium to the market benchmark. In credit markets, regulated utilities in the United States have raised more than $50 billion of corporate debt in 2019 to date, and borrowing spreads are currently below historical averages. There are several reasons why markets may not reflect widespread climate risk to utilities, despite the scientific evidence around likely future damage. Investors may believe that cost increases from climate change will occur too far in the future to materially impact the present value of their investments. Even if investors believe that climate change risks are material to valuation, they may also believe that such risks will not be considered by other investors for some time. Investors may be viewing wildfires as a California-specific risk, though the regional skew of wildfires is likely to shift significantly in coming years. They may lack the information or modeling tools for assessing the likelihood and geographic dispersion of high-impact tail events, such as the wildfires that PG&E faced. Financial markets may also reflect the belief that the costs of climate change in the utility sector will fall predominantly on ratepayers, insurance companies, and/or taxpayers rather than investors, and therefore investors may not view themselves as materially exposed. California’s recent creation of a wildfire insurance fund with contributions from both ratepayers and companies provides important policy lessons for designing comprehensive frameworks to allocate climate damage costs. These include the strengthening of both regulatory and corporate climate resilience expertise, mandating preventative investment as a prerequisite for cost-recovery mechanisms, defining utility financial exposure for climate damage situations, and providing cash for utilities to provide essential services when facing large disasters. The policy also presents some potential pitfalls that may be instructive for other state policy makers. The legislation sets aside large reserves for future damage, a necessary measure, but one that will result in higher electric bills. The bill does not allow utilities to earn a return on safety-related spending, which broadly diminishes incentives for proactive climate mitigation investment. The potential insufficiency of the wildfire fund also creates uncertainty about future cost allocation. Finally, failing to reform the California legal framework that allows utilities to be held liable for damages they did not cause perpetuates risks for companies and ratepayers. If the first climate change bankruptcy is indicative of a new reality, it is not that utilities are going to go bankrupt overnight. Rather, climate disasters will increasingly add financial stress to utility-sector stakeholders, as costs accumulate from both acute events and damaging extreme weather impacts. Adapting the regulatory bargain for a climate-exposed future will require lawmakers, regulators, and shareholders to develop new approaches and new incentive structures to ensure an accountable, robust utility sector. Moreover, while climate change is already presenting real financial challenges to utilities, it will not be the only sector to face large climate-driven costs. Other corporate actors can look to the utility experience to better understand how policy makers, investors, and companies will respond to the growing financial threat from climate change.
Topic:
Climate Change, Economics, Gas, and Electricity
Political Geography:
United States and California

89. China and economic sanctions: Where does Washington have leverage?

Author:
Richard Nephew
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
Though historically China has been a sanctions recipient, with only a few isolated incidents of using sanctions in return, this situation is likely going to change in the years to come. China’s global economic position — as well as its ambitions to serve as not only a global power, but also potentially the leading international power — will push it to consider means of exerting international leverage. The United States has shown vividly in the last 30 years that sanctions are one means to this end, and Chinese scholars are demonstrating increasing facility with sanctions doctrine. China’s increasing assertiveness in economic sanctions will allow it to not only hit back directly against the United States with retaliatory measures, but also to develop independent rationales to apply sanctions in pursuit of Chinese policy objectives. China may begin using sanctions as an affirmative instrument of policy. The United States is vulnerable to disruptions in U.S.-Chinese economic ties. The U.S. reliance on Chinese financing, especially for U.S. national debt, and Chinese economic growth in areas where the U.S. typically excels demonstrate China’s capacity to target the U.S. To combat this potential emerging threat, the United States should seek first to negotiate with China on ways to avoid conflict. But, given the likelihood of competition nonetheless, the United States should also add sanctions development to its crisis management process, and increase intelligence and analytical capabilities that focus directly on Chinese sanctions doctrine and practice.
Topic:
Diplomacy, Sanctions, and Global Political Economy
Political Geography:
United States, China, Asia, and North America

90. Economic Volatility in Oil Producing Regions: Impacts and Federal Policy Options

Author:
Daniel Raimi, Ron Minsk, and Alan Krupnick
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Center on Global Energy Policy
Abstract:
Growth in US oil production has created substantial economic and energy security benefits for the nation. Over the course of a decade, new oil production has virtually eliminated the US trade deficit in petroleum and, in 2020, the Congressional Budget Office projects that US GDP will be 0.7% higher than it would have been without shale development. However, the rise in oil output has also expanded the number of communities closely tied to swings in crude prices—the boom and bust cycles that have confounded producers since the first commercial wells were spudded in the mid-19th century. US oil producing regions enjoy significant economic growth during boom times, boosting state and local investment, employment, and household income. This growth often comes with its own challenges—such as strains on local housing, school, and infrastructure—which are amplified by uncertainty over when, and to what extent, prices and production will fall. When oil prices drop, local and state economies can face sharp declines, and decisions or investments made during the boom period may become obsolete. This volatility creates planning challenges for both the public and private sectors, along with substantial risks for residents of oil producing regions. In this report for Columbia University’s Center on Global Energy Policy, the authors address whether the federal government can and should intervene to reduce the challenges associated with this volatility. In their research, the authors convened two expert workshops, reviewed the existing evidence, and analyzed a range of potential policy options. The report recommends a modest intervention: establishing a federal interagency Oil Volatility Advisory Board. The board would synthesize data on local economic, fiscal, and social conditions in producing communities. With this information, the board would play a coordinating role by connecting public and private institutions in producing regions with existing federal programs designed to manage near-term challenges and diversify local economies over the longer term. While this proposal is unlikely to eliminate all of the local challenges associated with oil price volatility, it could help smooth fluctuations, providing the basis for a higher quality of life along with more stable economic growth in producing regions. The paper finds that: The experience of booms and busts in oil producing regions is distinct from other regional economic challenges, as local businesses, governments, and residents must prepare for—and respond to—large, rapid, and unpredictable changes in local economic conditions. While the federal government has established programs to assist with long-term economic decline in some coal, military, and trade-impacted communities, no analogous program exists for supporting oil-producing communities experiencing economic volatility. State governments in Texas, North Dakota, Colorado, and elsewhere have shown varying levels of interest in assisting localities manage the challenges of volatility. Where they exist, these efforts have mostly focused on managing infrastructure demand during “boom” periods. However, some states have done little to address local impacts during booms, and no states have taken major steps to support economic diversification or other efforts that could soften the local impacts of “busts.” In some states—particularly Texas—existing tax policy exacerbates, rather than smooths out, revenue volatility for local governments. Several existing federal offices and programs can provide a base of knowledge to support oil-producing communities. These include the U.S. Economic Development Administration (EDA), the Department of Defense’s Office of Economic Adjustment, and federal Trade Adjustment Assistance. We believe that EDA offers the clearest model to support long-term economic diversification in oil producing communities. If Congress were to fund EDA to support oil producing communities, clear guidelines would need to be established to determine eligibility criteria. In the absence of new, devoted federal funding, a federal Oil Volatility Advisory Board may provide the best option to mobilize and align federal resources to meet the needs of oil producing communities. This interagency body would synthesize data to identify communities most in need of support, conduct outreach efforts to these communities, and assist them in accessing available federal resources.
Topic:
Energy Policy, Oil, and Federalism
Political Geography:
United States