Just transition funds in U.S. states: explaining variation in political process and policy design

Abstract Coal power has rapidly declined in the US, dropping from 45% to 19% of electricity generation over 2010–2022. While this rapid transition is critical for decarbonization, it has devastating economic consequences for coal-dependent communities. Policymakers in numerous states are now grappling with how to provide support for transition-impacted communities. This study traces the process of just transition policymaking in five coal-producing states: Arizona, Colorado, Illinois, New Mexico, and Utah. We use process tracing methods and policy process theory to identify key factors in policymaking, specifically related to policy windows, policy entrepreneurs, and policy feedback. We find considerable variation across states in both policy processes and outcomes, reflecting a period of policy innovation and experimentation among early adopters. Yet we also find broad patterns with party control: Democrat-led states included transition funding as part of comprehensive legislative packages on climate and clean energy, while Republican-led states had smaller, standalone programs through more idiosyncratic policy processes. Overall, the increasingly cooperative stance of some utilities and the diverse coalition of support signals an important shift in the political economy of energy transitions.