Brooklyn’s Green Energy Transition Creates Financial Crisis: How Climate Job Losses Drive Residents to Bankruptcy in 2024

As Brooklyn navigates the complex transition to green energy, an unexpected consequence has emerged: a surge in unemployment-related bankruptcy filings as traditional energy sector workers find themselves financially stranded by the rapid shift away from fossil fuels. After rising for the last decade, the number of green job opportunities in New York City declined between 2022 and 2023, from 19,476 to 15,501, with the myriad delays New York City faces in carrying out its green transition taking a toll on its workers.

The Reality of Green Energy Job Displacement

While climate advocates celebrate the environmental benefits of transitioning away from fossil fuels, workers whose jobs are significantly linked to fossil fuel use face uncertain futures, and unless the country can find ways to help areas whose economy will be negatively impacted by a transition to clean energy, deadlock about climate policy will likely ensue. In Brooklyn, this transition has created a perfect storm of economic hardship for workers in traditional energy sectors.

“It’s having a terrible impact on the workforce in New York City,” said John Murphy, a member of the Clean Energy Jobs Coalition and international representative of the United Association of Plumbers and Pipefitters. “The unions can’t bring people into their apprenticeship programs without knowing there’s going to be work there, and so everything’s kind of at a standstill right now,” Murphy added.

Brooklyn’s Economic Landscape in Crisis

The borough’s economic indicators paint a troubling picture. The unemployment rate edged up to 5.2% from a 20-month low of 4.8% in April, returning to May 2023 levels. Despite this uptick, Brooklyn has narrowed the gap between its unemployment rate and the citywide rate back to pre-pandemic levels. However, this modest improvement masks the deeper structural challenges facing energy sector workers.

In the US power system, the lowest-skilled workers in fossil fuel-dependent states will face more uncertain employment and job training will be necessary. To achieve the full benefits of the transition, states must plan for the unemployment, retraining and relocation costs due to the declining fossil fuel workforce to avoid a persistent fall in living standards.

The Bankruptcy Connection

The financial stress from job displacement has contributed to a broader trend of rising bankruptcy filings. For the 12-month period ending December 31, 2024, the overall number of bankruptcy filings increased by 14.2% compared to the year ending December 31, 2023—increasing from 452,990 to 517,308. In New York specifically, annual bankruptcy filings totaled 486,613 in the year ending June 30, 2024, compared with the previous years’ filings totaling 418,724 cases.

What has likely caused the recent increase in bankruptcy filing was an increase in Americans carrying record credit card and personal loan balances post-Covid. In addition, inflation itself has led to an increase in filings as Americans must choose between paying for necessities versus paying their debt balances. Specifically, the increase in inflation has resulted in significant increases in rent, food, and other everyday necessities.

The Scarring Effect of Job Loss

Research reveals the long-term financial impact of energy sector job displacement. Not only do individual earnings decline in the short term, but “they end up being 5 to 8 percent lower forever.” “Job loss is scarring,” and in communities with high rates of unemployment, housing prices drop and home equity, a valuable source of credit, disappears.

Only the most educated workers relocate in response to local unemployment. In the case of the coal bust, “older, sicker, poorer individuals” stayed in place, without the savings to move, pursue job training, or start new businesses. These communities have still not recovered.

Policy Solutions and Support Systems

Experts emphasize that targeted support is crucial for affected workers. It will require measures such as skilling and reskilling, relocation incentives, unemployment insurance, and other social assistance for workers who lose their jobs. However, current federal- and state-funded unemployment insurance will be an important first step, but programs need to be flexible enough to respond to local conditions, temporarily offering more generous and longer-lasting payments when communities experience intense joblessness. But state rules are often so restrictive that unemployed people may never receive the increased help.

When Financial Crisis Becomes Overwhelming

For Brooklyn residents facing the dual pressures of job loss and mounting debt, bankruptcy may become the only viable path forward. When climate-related job displacement combines with inflation, rising housing costs, and inadequate support systems, families often find themselves with no alternative but to seek legal protection from creditors.

If you’re a Brooklyn resident struggling with overwhelming debt due to job loss from the green energy transition, consulting with an experienced Brooklyn bankruptcy lawyer can provide crucial guidance on protecting your financial future. Professional legal counsel can help navigate the complex bankruptcy process and determine whether Chapter 7 or Chapter 13 bankruptcy offers the best path to financial recovery.

The Road Ahead

While the green energy transition promises long-term environmental and economic benefits, the global transition to sustainable energy, as well as climate change adaptation, are expected to be “net job creators”, according to the World Economic Forum’s Future of Jobs 2023 report. However, the timing mismatch between job losses in traditional energy sectors and job creation in green industries leaves many Brooklyn families in financial limbo.

Last year, the city announced big plans to host nearly 400,000 green jobs by 2040. That would be up from 133,000 in 2021. The ambitious “Green Economy Action Plan” involves activating public sites for electric vehicle charging, creating 12,000 green apprenticeships by 2040 and green training facilities in every borough.

Until these ambitious plans materialize into concrete job opportunities, Brooklyn residents displaced by the energy transition continue to face difficult financial decisions. For those overwhelmed by debt, understanding bankruptcy options and seeking professional legal guidance remains a critical step toward financial stability and a fresh start in an evolving economy.