Regional Economic Impacts of the Just Energy Transition: Lessons for Coal Regions

Abstract

The coal phase-out's regional economic impact is a key challenge of the energy transition, as employment and fiscal dependence in coal regions face structural adjustment without automatic market solutions. Analyzing European Union NUTS 2 regions from 2000-2022 with fixed effects and clustered errors, coal regions show a consistent 1.1 percentage points unemployment premium and grow faster in gross domestic product per capita at 0.2 percentage points annually, indicating a hollowing-out process where population exit raises per-capita output while employment conditions worsen. Spatial analysis shows strong geographic clustering, supporting coordinated local and sectoral targeted transition policies. South Korea's rapid phase-out, with Chungnam as a major coal-power region, underscores the need for proactive national support to enable concrete regional action before plants shut down.