New Report Finds Economic Benefits to Marrying Environmental Justice Goals to Carbon Reduction Policies

Report from UMass Amherst’s Political Economy Research Institute finds marginal cost increases, substantial benefits to reducing co-pollutant damages in minority and low-income communities
Bridget Diana
Bridget Diana
Michael Ash
Michael Ash
James Boyce
James Boyce

AMHERST, Mass. – Decarbonization of electric power generation will be a key part of any serious effort to address the climate crisis, and during the 2020 presidential campaign, then-candidate Joe Biden pledged to deliver 40% of the overall benefits from a clean energy revolution to disadvantaged communities. Shortly after taking office in January, President Biden signed an executive order establishing an office of health and climate equity at the Department of Health and Human Services and a White House interagency council on environmental justice. A central aim of these actions is to improve conditions in these communities, which for decades have borne disproportionate burdens from power plants, incinerators and other sources of pollution.

Today, economists at the University of Massachusetts Amherst Political Economy Research Institute (PERI) report that when decarbonization policy explicitly incorporates the objectives of improving air quality and advancing environmental justice, the result is not only a substantial reduction in the co-pollutant damages to the surrounding communities, but also that the addition of such clean air and environmental justice criteria creates just a marginal increase in the policy’s price tag.

Presenting their findings in the report “Green For All: Integrating Air Quality and Environmental Justice into the Clean Energy Transition,” the study’s authors conversely find that failing to craft a decarbonization policy that does not explicitly include air quality and environmental justice criteria could worsen human health damages and environmental inequality. The study, written by Bridget Diana, doctoral candidate in economics, Michael Ash, professor of economics and public policy, and James K. Boyce, professor emeritus of economics, was published on the PERI website. Ash and Boyce co-author the annual Toxic 100 lists of top climate, air and water polluters, the findings of which helped inform the new study.

To examine how incorporating air quality and environmental justice objectives would affect the course of decarbonization in the U.S. electric power sector, the economists compared a baseline scenario of zero carbon reduction to three scenarios: first, a policy narrowly focused on the goal of a 20% reduction of carbon emissions from the sector; second, a policy with the additional goal of targeting the dirtiest facilities so as to achieve a 50% reduction of co-pollutant damages; and third, a policy with the additional goal of ensuring the same 50% reduction for Black, Hispanic and low income populations.

“The results show substantial differences in the pattern of decarbonization between the carbon-alone scenario and the two scenarios that incorporate co-pollutant reduction objectives,” they write. “Overall, the damages from hazardous co-pollutants decrease in the carbon-alone scenario thanks to the phasing out of coal. The results vary substantially across regions, however, and California in particular sees substantially increased damage for the entire population and even more so for Blacks and Hispanics. When decarbonization policy explicitly incorporates air quality and environmental justice objectives into its design, the result is a very substantial reduction in the co-pollutant damages from gas-fired power plants compared to the carbon-alone scenario.”

The researchers say the most notable difference lies in the co-pollutant damages from natural gas-fired power plants. In the first scenario they studied – a 20% reduction in carbon emissions – they report that these damages increase substantially as coal is phased out in favor of natural gas without regard to the extent of health impacts generated by the latter. Gas-fired plants often are located in more densely populated locations than coal-fired plants, and in greater proximity to low-income and predominantly minority neighborhoods.

In the latter two scenarios – incorporating carbon emission reduction plus air quality, and integrating carbon emission reduction, air quality and environmental justice factors – the overall reductions in co-pollutant damages are similar, but they found that “substantial differences show up in a fine-grained examination of facility-by-facility results.”

When investigating the potential costs of the three scenarios, the economists found no major changes to the cost of decarbonization when fulfilling clean air and environmental justice goals.

“The cost of meeting these clean air and EJ goals is on the order of 5% more than the cost of a decarbonization focused exclusively on carbon alone,” they write. “Moreover, the additional cost in meeting these goals declines as the decarbonization target is tightened.”

“There can be no excuse for failure to act upon and achieve these important goals,” they write. “The principles that co-benefits should count in policy design and that policy makers should seek to remedy disproportionate harms borne by people of color and low-income communities are both well-established in environmental policy in the U.S. The same principles, we believe, could and should be adopted by private-sector entities, including the hundreds of firms that have subscribed to science-based targets for reducing their own carbon footprints.

“The analysis presented in this report can help to inform the design of policies to this end,” Ash says. “Clean Energy Standards mandating that electricity providers not only increase the share of clean and renewable energy in power generation, but also meet standards for reducing co-pollutant emissions overall and specifically impacting environmental justice communities, would ensure that the contribution of fossil fuels to our electricity supply is phased out and that reductions are prioritized where the public health and environmental justice benefits are greatest.”

The complete report can be found online on PERI’s website.