Connecting state and local government leaders
COMMENTARY | There’s a growing effort to change the way investments are made in the region and to ensure that local communities share in more of the benefits.
Editor’s Note: This is the third in a series of articles from ReImagine Appalachia, a coalition working to transform and strengthen the economy across parts of Kentucky, Ohio, Pennsylvania and West Virginia. At Route Fifty, we’ve reported previously on this project in our news coverage. Here, we’re giving the advocates behind the effort an opportunity to describe their approach, for themselves, in greater detail.
This article in the series focuses on an initiative known as the sustainable finance hub, which is seeking to drive investment in the region that supports clean energy and other industries and creates good paying jobs in both cities and outlying areas.
You can find the other articles in this series here.
From the collapsed Fern Hollow Bridge in Pittsburgh to the devastating flooding in Eastern Kentucky, Appalachians are all too familiar with the need for strong climate infrastructure.
For generations, working families in the region have faced cycles of boom-bust deindustrialization and resource depletion. The damages are still visible in shuttered downtown stores and a declining youth population scattered throughout the region. We’ve turned our back on those who were left behind by economic sabotage, absentee owners, bad trade deals and the energy transition away from coal. On top of that, there are dire predictions of even greater flooding, more devastating storms and heatwaves in the region.
The Inflation Reduction Act and bipartisan infrastructure law are providing a surge of much welcomed, federal aid to the region. However, that’s still not enough to overcome the legacy of King Coal, which destroyed mountain tops and forests, and made the region particularly vulnerable to the fallout from climate change.
Recognizing the need for long-term financial self-reliance, former Pittsburgh Mayor Bill Peduto, as part of the Marshall Plan for Middle America, or MP4MA, and ReImagine Appalachia, commissioned a project in 2020 know as the sustainable finance hub, to ensure the region has the necessary access to capital to usher in long-term recovery.
The founders of the hub, like our counterparts in Germany’s coal regions, started with the recognition that we must reclaim our “own” capital, (e.g. pension funds, endowments, anchor institutions, banks, etc.). This capital could amount to several trillion dollars and accelerate project development capacity in the region. In other words, we’re reinvesting in ourselves and not handing over our wealth to Wall Street.
The hub was convened by the Heartland Capital Strategies Network, an initiative of the Pittsburgh-based Steel Valley Authority. The Heartland Network stewards America's largest "table" of investors, pensions and pension consultants, labor unions, development and policy leaders. These are the "aviators" of pro-worker, responsible investments in the country. These capital partners advise or manage significant pension funds, or workers’ capital. They pioneered economically-targeted investments and at-scale environmental, social and governance focused impact investments.
Our investors want to put their capital into Appalachia and the Heartland because they see the potential opportunities already underway in the region. This includes an incredible array of clean energy projects, affordable and green housing, electric vehicles and electric transit, micro-grids, and sustainable manufacturing. These projects are also creating union jobs for blue collar workers, women and minority youth.
Cincinnati’s New Market Solar in rural Highland County is an early success story of the MP4MA model. Developed by Creekwood Energy and Hecate Energy, and constructed by International Brotherhood of Electrical Workers union labor, it’s the largest municipal solar project east of the Mississippi. It will generate 160 construction jobs and save the city $3 million a year. A project labor agreement (PLA), part of a power purchase agreement (PPA) that includes a solar-on-municipal-building-roof program, will result in the IBEW signing up local youths as apprentices, working with the group Co-op Cincy.
Other cities are moving on similar projects, including EV charging stations in Columbus that involve hiring union workers and Huntington’s Solar Holler, providing jobs and apprenticeships for former miners to become solar installers.
Given the dozens of projects underway in Appalachia, the sustainable finance hub will ensure we are maximizing our efforts by:
- Facilitating the exchange of best practices (e.g. PLAs, responsible contracting policies, community benefits agreements) and successes in the region.
- Fostering responsible city, state and public-private procurement partnerships.
- Mobilizing sustainable capital by reorienting pension and anchor institutional investors toward “inward” investment.
- Partnering with the Biden Administration to implement clean energy, infrastructure, and manufacturing plans.
- Pushing for pro-labor clean economy partnerships, local apprenticeships and pathways for disadvantaged populations.
- Mitigating climate overheating and extreme weather disasters.
The hub will work with our Appalachian communities and anchor institutions across the region, which now includes Western Maryland, to scale up and replicate projects like New Market Solar. We want to bring together the larger cities to help mentor the smaller towns and counties in the region, and push for aggregated purchasing alliances. In doing so, we will take advantage of the new economy and clean energy transition to reconnect urban and rural communities that were bound together for over a century by past industry.
Additionally, we have the potential to create a fresh generation of thousands of new blue-collar, union, middle class jobs in Appalachia. If this strategy works, perhaps people in the region can repair our communities and usher in a new, equitable and sustainable era.
Tom Croft is the managing director of Heartland Capital Strategies and executive director of the Steel Valley Authority, which manages, across five offices, the Commonwealth of Pennsylvania’s industrial turnaround program. You can reach him at: email@example.com.