The coal phase-out in Germany and its regional impact on economic worries

Abstract

Market-driven closures of coal mines have typically been associated with negative economic consequences for the affected regions. In Germany, structural policy directed towards ameliorating the negative effects of hard coal decline in the Ruhr area lagged behind the onset of decline, caused major political conflicts, and has been variously criticized for its reactive character that failed to generate a positive image of the future. The phase-out of lignite coal in Germany, in contrast, is policy-driven and accompanied from the outset by compensatory and investment policies that strive to facilitate regional structural change proactively. Against this backdrop, we investigate how the policies of lignite coal phase-out initiated in 2018 and the accompanying public discourse affect the economic worries of individuals in the remaining three lignite coal mining areas in Germany. We focus on the period 2016-2021, using a longitudinal multilevel design based on regional and individual data from the German Socio-Economic Panel (GSOEP). Overall, probabilities of strong economic worries decrease throughout the observed period. Results show that subjective economic worries do not significantly differ between residents of lignite mining regions and those in the rest of the country. Further robustness analyses confirm that the coal phase-out policy has not increased economic uncertainties in the populations of German lignite mining regions. Based on our results, we discuss the need for future research on the effects of policy designs of clean energy transitions on subjective perceptions of the future.