A mainstay of budget? Coal mining as a source of revenue for Polish local governments

Climate change mitigation requires a rapid coal phase-out. The concentration of the coal industry in selected areas may be a significant barrier to this process since the actors that need to make the most significant change are those most dependent on the fossil fuel industry. Poland is one of the world's most coal-reliant countries, and this reliance manifests most strongly in municipalities where coal mines or power plants are located.This article focuses on the influence of the coal industry on local government's budgets and necessary com-pensations in case of an abrupt coal phase-out. It is found that some, but not all, coal-related local governments are highly dependent on taxes and royalties from coal mines and power plants. This effect is the strongest in mostly rural and sparsely populated areas where lignite is mined and used for power generation. It is therefore suggested that the level of economic dependence on coal widely varies, and some, but not all, local governments will require financial assistance after the coal phase-out. Their role in a smooth and Just Transition is essential, while the impact on them may be as substantial as on energy companies or miners themselves.

Automated summary

Mitigating climate change requires a rapid reduction in coal usage, which may be challenging due to the concentration of the coal industry in certain areas. Poland, one of the most coal-dependent countries, shows the strongest reliance on coal in municipalities with coal mines or power plants.