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Part 2: Sector-Based Analysis of Climate Impacts and Opportunities

Invest Appalachia’s priorities and strategies were developed with the purpose of addressing key capacity and resource gaps in the regional ecosystem that limit the ability of communities to not only grow, but to thrive. IA’s analysis and that of our partners is centered around developing the necessary infrastructure, resources, and capacities to support the development of our four priority sectors (clean energy, community health, food and agriculture, and creative placemaking) and industries that support inclusive prosperity. This analysis was developed in concert with CDFIs, foundations, non-governmental organizations, public agencies, academic institutions, and grassroots stakeholders, to support a just economic transition away from historic dependencies on the extraction of fossil fuels.

These targeted sectors represent a starting point for prioritizing community economic development within the framework of just transition, while acknowledging additional economic challenges and opportunities that will emerge from the impacts of the climate crisis.

The overall goal of a systems-level approach to community economic development is to create the circumstances for all of Appalachia’s people to have the opportunities to exist equitably and sustainably in their place of choice.

A great deal of the popular discourse regarding climate adaptation and resilience, as well as a significant amount of investment dollars, currently focuses on emerging high tech solutions and ‘green’ startup companies. However, for the millions of Americans whose daily lives are increasingly impacted by climate change, building resilience and adapting to climate impacts also requires a much less flashy approach to resilience and adaptation – attention to the basic industries, amenities, and infrastructure that allow people to live and thrive in the face of a transforming climate.

While affordable clean energy is important, issues such as community-oriented health systems, robust infrastructure and built environments, thriving local economies, and a diverse regionalized food system are also part of the foundation on which to build a climate-resilient Central Appalachia.

This section identifies sectors that we believe are critical to overall climate resilience and which require proactive investment and market development strategies.

Figure 4. Invest Appalachia focuses on sectors that are driving community development and inclusive prosperity.

These four sectors were identified as essential to the region’s economic diversification, building community wealth, improving social determinants of health, and quality of life in the region longitudinally. Viewed through a climate lens, the development of each of our priority sectors contributes to increasing the investment readiness and entrepreneurial opportunities of the region’s various economies.

Across many economic and public health indicators, Appalachia is striving towards economic parity with much of the rest of the country. As we grapple with a just transition in the coming years, we’re focused on longitudinal community resilience and exploring pilot adaptation projects that can be replicated throughout the region. An experimental approach to financial products is necessary to enable the region to test strategies and deploy resources in each sector in a way that incentivizes climate adaptation throughout our entire investment approach.

Within each sector-focused investment theme below, we offer some initial analysis of how climate change will create new challenges, needs, or opportunities related to the priority strategies or core issues within each sector.

Food and Agriculture Systems

1. Market Development - Climate-related disruptions are creating greater demand for strong regional food systems.

Warming trends are leading to longer growing seasons and greater crop variety, plus new challenges such as increased pest and disease pressure, heat damage, drought, and flood loss, including soil erosion. These challenges are likely to be most severe in the Great Plains, Central Valley of California, Desert Southwest, and western Gulf of Mexico regions, placing pressure on Central Appalachia for expansion of the agricultural sector (Union of Concerned Scientists, 2019). As the COVID-19 pandemic has illustrated, long-distance supply chains are particularly vulnerable to disruption, while the shorter, more direct supply chains of regionalized food systems should allow for more resilience to system shocks.  At the same time, a strong regionalized food system helps build food sovereignty and allows for localized control of food production and distribution, creating both food security and local jobs. The USDA designates such local and regional producers, cooperatives, supply networks, food hubs, and retailers that constitute regional smallholder food systems as ‘mid-tier value chains,’ and has identified them for special funding status (USDA, 2022).

2. Healthy Food Access - National and international supply chain disruptions and food price volatility is likely to become increasingly turbulent; thus putting greater demand on regional food systems. (Davis et al., 2020).

A robust infrastructure for regional food production that emphasizes smallholder farms and the production of diverse crop varieties would help build resilience into the food system and prove better able to adapt to unpredictable climate change impacts than the dominant monocultural practices of industrial farming. While mainstream food assistance networks rely on shelf-stable products, warehousing, and long-distance distribution channels, there is an emerging recognition that fresh, local food products can provide improved nutritional options as well as reducing dependence on long supply chains that are vulnerable to economic and weather shocks.

3. Working Lands Conservation and Sustainability - Access to arable land for sustainable farming operations may be hindered by price competition due to climate change-linked in-migration.

Land identified as important for conservation may similarly be threatened by development. Policy and protection status are likely crucial mechanisms to secure land access and management. There is great potential for carbon sequestration in intentional agriculture practices and land management strategies more broadly, including agroforestry, regenerative agriculture, and restoration of riparian zones. Sites of mountaintop removal and other lands damaged by extractive activities could especially benefit from restorative land management practices. For example, analysis from the Ohio River Valley Institute reveals that if just one-quarter of Abandoned Mine Lands (AMLs) were reforested, the resulting carbon sequestration would equal the annual emissions of approximately 40,000 homes (Dixon, 2021).

Green Infrastructure for Food Hubs (Processing, Aggregation, and Distribution) – While global corporate supply chains have been an early and appropriate focus for increasing sustainability through operational efficiencies such as waste reduction and green transport, similar opportunities for resilience apply to local and regional food systems. Specifically, a robust regional food system requires hard infrastructure in the form of facilities, equipment, and transportation. Solar powered buildings (ideally with storage), energy efficient cold storage and processing equipment, electric vehicles, and waste stream management are all opportunities to simultaneously reduce carbon footprint and increase the resilience of the regional food system in the face of climate shocks and economic disruptions.

Sustainable Production Practices and Carbon Offsets – One policy area for robust consideration is creating or participating in carbon credit/offset markets, which could represent an important revenue stream for land owners and agriculture operators while incentivizing best practices that promote soil ecology health. In addition to drawing down and storing carbon, these practices protect waterways from contamination by runoff of excess agricultural inputs, including industrial chemicals found in fertilizers, pesticides, and fungicides. Even in their current state regionalized sustainable agriculture practices require substantially less fossil fuel-reliant inputs in the  production of crops. Not only is there less reliance on heavy machinery, significantly less industrial chemicals are used as inputs and amendments, which are often themselves derived from fossil fuel products.

One policy area for robust consideration is creating or participating in carbon credit/offset markets, which could represent an important revenue stream for land owners and agriculture operators while incentivizing best practices that promote soil ecology health. In addition to drawing down and storing carbon, these practices protect waterways from contamination by runoff of excess agricultural inputs, including industrial chemicals found in fertilizers, pesticides, and fungicides. Furthermore, regionalized sustainable agriculture practices require substantially less fossil fuels in both the shipping and production of crops. Not only is there less reliance on heavy machinery, significantly less industrial chemicals are used as inputs and amendments, which are often themselves derived from fossil fuel products.

Climate Gentrification in Small Towns and Rural Places

As Americans begin to migrate from more heavily impacted regions across the Southeastern US and coastal regions, they’re likely to travel towards northern, inland states, or to the much closer Central Appalachian region. A great many are likely to opt for the latter. This prospect raises the emerging issue of “climate gentrification” (Nathan, 2019), a phenomenon in which individuals of higher socio-economic status site their primary residences or investment properties in areas that are perceived to be in less danger from direct climate change impacts, in turn driving up property values and taxes in those areas while impacting the existing social and cultural makeup (Payne, 2019).

A fast-growing remote worker population and the COVID-19 pandemic have added to ex-urbanization and amenity migration to create a situation where certain regions, including parts of Appalachia, are experiencing growth rates unseen since the coal and industrial booms of the mid-twentieth century.

Given the added pressure of climate migration on top of these circumstances, how well or poorly communities in Appalachia adapt to the challenges and opportunities presented by in-migration in the present and near future may well define the region for a generation or more.

One important factor that could exacerbate the effects of climate gentrification is the simple fact that the mountainous terrain of the region makes construction of all kinds relatively difficult compared to the Sun Belt and other fast growing housing markets in the US. This includes new housing construction and other physical infrastructure build out to support a growing population. One practical consequence could be a housing supply that is quickly and increasingly exceeded by demand, causing sharp rises in rent prices, home selling prices, and property taxes. Marginalized individuals and communities could be unable to afford rent or be coerced into selling as their previously inexpensive housing becomes increasingly desirable, forcing those previous inhabitants into the new margins—i.e., areas that are at higher risk of negative climate impacts.

Community Health

1. Public Health Outcomes - Climate change poses risks for public health across the US, especially in the form of air quality issues and extreme heat exacerbating both acute and chronic respiratory and cardiovascular problems.

Supporting the development of the region’s community health infrastructure is vital to create healthy communities as population increases alongside growth of other key economic sectors. Utilizing the social determinants of health framework, some immediate strategies for creating more climate resilient communities include:

Identification of neighborhoods, people, and resources most at risk; developing or adapting protocols for delivery of mental health services during and after extreme weather events.

Public and municipal awareness, outreach, and training for local disaster preparedness and recovery efforts within local and county governments, including other public health challenges related to climate like air quality, by utilizing existing resources like EPA’s Air Quality Index tool at

Heat island cooling strategies such as increased tree and vegetation cover in public places, green or reflective roofs, and the creation of community cooling centers for extreme heat events, including transportation plans for elderly and disabled people.

2. Housing and Affordable Housing - Climate-related in-migration, especially “climate gentrification,” is likely to place great pressure on housing affordability in Central Appalachia as the region becomes increasingly desirable at the national scale.

Expanding floodplains and the consequential rate increases for homeowners and flood insurance may also exacerbate affordability issues nationally. As noted earlier, it is increasingly evident that insurance providers and regulatory bodies are in structural misalignment with the evolving realities of the climate crisis. Affordable housing is currently and will continue to be a central issue as it relates to community health and safety in the generations to come. Entire communities will inevitably have to adopt intensive climate adaptation measures or relocate altogether.

Clean Energy

1. Green Buildings and Energy Efficiency - As the region warms above historic baselines due to climate change, green buildings and energy efficiency take on even greater significance.

This is especially true as many homes and other buildings that historically have not required air conditioning will become too hot to comfortably or safely inhabit without it. This will create greater energy demand, straining rural energy grids and driving up prices, causing affordability and reliability issues. While there are long term benefits, the difficulty and expense of retrofitting manufactured homes and older structures including aging municipal buildings is high, making it unrealistic for many families and rural municipalities and businesses without outside assistance, particularly state and federal funding and favorable policy. Updated governmental policy with regards to energy suppliers and utility providers is also a critical component of ensuring expanded access to the environmental and economic benefits of renewable energy technology.

2. Renewable Energy Economy - Central Appalachia represents a significant growth market for renewable energy in both solar and on-shore wind, leading the nation in projected economic benefit of solar and wind buildout from 2021-2030 (Topsado et al., 2021).

The former mining workforce is well-positioned to transition to a renewable energy economy. For example, small-to-medium-scale commercial and institutional solar (churches, school systems, municipal buildings, grocery stores) provides employment opportunities in addition to resilience and climate benefits—an analysis which grounds the Appalachian Solar Finance Fund’s approach ( There is also great potential for community solar, micro-grids, cooperatives, and other democratic approaches to the energy economy (see next paragraph). Demand-side support for clean energy development is critical, however, as market forces will skew new renewable energy development towards areas of wealthy and/or dense population where developers have more and larger projects to build a business around. Demand-size support needs include public education, local policy change, predevelopment support for the planning and feasibility stages of projects, workforce development and training, flexible bridge financing tools, and creative large scale investment. Invest Appalachia is interested in supporting clean energy projects of all sizes that are informed by sustainable climate adaptation practices.

3. Energy Democracy - Renewable energy, especially solar, represents an opportunity for greater individual and community energy democracy and a move away from utility monopolies.

This is an important issue as energy markets that rely heavily on fossil fuels become increasingly volatile through their ties to the global market. With the support of creative financing products like what Invest Appalachia offers, rural communities can begin to increase their energy efficiency and localize energy generation with a blend of on- and off-grid infrastructure. However, restrictive policy and regulatory contexts heavily constrain these possibilities currently. For this reason, it is misguided to focus entirely on the technical possibilities of renewable energy technologies as the answer to climate adaptation, since they may not be feasible in many jurisdictions. Instead, we advocate for a pragmatic approach that puts resources and energy into technologies and resources that can actually be deployed in the current policy and economic context, and done so in a way that benefits rural and other underserved communities. A democratic and equitable energy transition is not a technical problem, it is a problem of political will and appropriate resources.

Creative Placemaking

Creative placemaking is best considered a broad framework for place-based community development rather than an industry or sector. It proposes an asset-based, place-centric frame for development and investment decisions that we believe is critical for prosperity, resilience, and inclusivity. In Central Appalachia, creative placemaking includes such strategies as downtown revitalization, asset-based tourism, small business development, arts and culture based development, and leveraging the power of the creative economy. All of these strategies, especially when taken together, help to foster diversity, inclusivity, and community engagement and can ensure overall quality of life and a sense of togetherness in the face of climate disasters and other challenges.

1. Downtown Revitalization and Community Livability - Downtowns are critical to a future of increasing population in Appalachia’s small towns and cities, the likely scenario discussed in the first section of this report.

A focus on dense mixed-use (commercial and residential) development intentionally centered around existing downtowns, vs the sprawling development that currently characterizes rural gentrification, has major advantages for an expanding population. This intentional downtown-centric focus on redevelopment helps to support community vibrancy, cultural inclusion, enhanced walkability/bikeability and public transportation options (which have implications for both public health and emissions).

Special attention must be paid to the fact that many of the region’s historic downtowns are in low lying valleys and floodplains relative to the surrounding mountains, and recent analysis from First Street Foundation (2020) has revealed that a great many locations in Appalachia are at higher flood risk than previously understood. With the increasing frequency and intensity of extreme precipitation events, adapting the historic hearts of Appalachian communities to be flood-resistant is vital to the long-term preservation of creative placemaking and community safety. Historic buildings or existing structures undergoing redevelopment can incorporate climate-adaptive design considerations including energy efficiency, sustainable construction materials, and much more. Every brick and mortar project is an opportunity to increase the resilience of local infrastructure, preparing communities to adapt our built environments to better withstand the impacts of climate shocks and recovery more quickly. This stance grounds Invest Appalachia’s consideration of every investment and should do the same for partner funders and investors.

In fact, adaptive reuse—renovation and retrofitting of existing buildings—is a major climate mitigation strategy in and of itself. Existing research shows that “reusing our existing building stock can help us avoid significant environmentally-costly new emissions, while also providing opportunities to reduce building operating emissions through energy upgrades. It’s estimated that reusing and retrofitting existing buildings can save between 50-75% of the carbon that would be expended by constructing a similar building” (Frey & Martinez, 2023). The lion’s share of building-related emissions are from the operations of existing buildings (27%), which underscores the importance of energy efficient and green buildings as discussed in the previous section on green energy. However, with new construction accounting for 13% of the building sector’s emissions, focusing on adaptive reuse of existing buildings makes an important difference in short and long-term CO2 emission reduction.

2. Place-based Tourism and Outdoor Recreation - Tourism, particularly eco-tourism in Central Appalachia is a growing sector throughout IA’s geographic territory.

The natural beauty of the region is home to destinations like Asheville, NC, Gatlinburg, TN, Red River Gorge, KY, the New River Gorge National Park in WV and countless other destinations. In fact, the Great Smoky Mountains National Park is already the most visited national park site in the nation, and the Blue Ridge Parkway is the second most visited annually (National Parks Service, 2022). With the COVID-19 pandemic even the region’s most rural areas have seen an influx of tourism as people sought to leave cities temporarily and in many cases permanently. With increased investment in tourism infrastructure and promotion over the last decade it is projected that larger flows of tourists will be coming to the region. As the impact of the climate crisis intensifies, those numbers will increase as people seek to enjoy the relatively mild warm seasonal temperatures compared to areas at lower elevations and latitudes. This expanded outdoor tourism and recreation represents an opportunity to create a sustainable business and lifestyle sector that generates positive economic activity in the region. It is also an opportunity to promote public awareness and education opportunities around the region’s vital environmental assets, and incentivize resource conservation and land management best practices.

3. Arts, Culture, and Identity - As discussed, climate change is likely to bring increased in-migration from across the nation, leading to challenges of integration and cultural identity. The threat of cultural erasure, intentional or otherwise, is especially high in scenarios of gentrification.

Relatively affluent new arrivals have access not only to greater economic capital, but often greater social and political capital as well. To help guard against cultural loss of identity, a robust creative economy plays a vital role in cultural preservation and identity for current and future residents. The ability to exchange cultural traditions, tell stories, and forge new ways of expressing identity is critical to facilitating community integration and cohesion, generated through collective community action (Burke et al., 2020). Cultural and creative expression are key to understanding, retaining, and shaping cultural identity in any place, especially when that place is changing and incorporating new histories, identities, and cultures. While economic investment in other sectors will shape and secure the built and natural environment of the region, empowering creative voices to shape narratives and tell the story of a place as it is changing is also fundamental to the lived experience of present and future populations, and an imperative strategy for shaping broader public discourse in a healthy and inclusive direction.

Invest Appalachia is committed to continued research and exploration in the areas outlined in this report. Our next step is to begin work alongside partners. Our deepest hope is that this analysis contributes to a regional response that will sustain our region’s land, people, culture, and economies for generations to come. We welcome any and all partners in this dialogue and this shared pursuit.

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