Environmental justice fails both the environment and justice

Environmental justice fails both the environment and justice
© Greg Nash

President Biden’s first executive orders embraceenvironmental justice.” The two separate concepts — environment and justice — regularly top people’s concerns, so why not combine them? 

Well, because policies designed to confront both issues often end up solving neither.

Here’s one example. Environmental justice groups oppose taxing pollution, because poorer people or minorities would end up paying disproportionately. So, instead of policies like gas taxes, American environmental policy involves costlier regulations, such as fuel economy standards. By some estimates, for the same cost to drivers and carmakers, gas taxes could have cleaned up six times as much pollution.

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How much justice did we get for that environmental cost? Less than nothing. Fuel economy standards raise the cost of cars; gas taxes raise the cost of driving. It’s not immediately obvious which is tougher on drivers with low incomes. In the U.S., at least, standards are worse for low-income drivers than a tax would be. Environmental justice concerns obstructed environmental goals, thwarting both.

There are other examples. Some electricity regulators charge higher prices to encourage conservation and reduce pollution. But, in a nod to environmental justice, folks that don’t use much electricity pay lower prices. That undermines the conservation objective. Worse, electricity and income are so poorly correlated that many wealthy ratepayers benefit from the low prices, while many poor households pay the highest rates. By combining environmental and justice objectives, usage-varying prices fail to accomplish either.

Even when the two issues can be combined, practically, it’s not obvious the politics work. The Climate Leadership Council proposes a carbon fee starting at $40 per ton, with the funds being distributed evenly, starting at $2000 per year per family. Thousands of economists (including me) signed a letter in support, that reads “To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates.”

But what do economists know about fairness or political viability? Some voters might disapprove of the tax-and-rebate plan as a form of income redistribution. Others might view equal rebates as insufficiently redistributive. Do equal rebates really maximize viability, or would some clever apportionment of the revenues among politically powerful groups increase the likelihood of passage?

Proposals like the Climate Leadership Council’s have stumbled in the past, for precisely those reasons. Hillary ClintonHillary Diane Rodham ClintonHeller won't say if Biden won election Whitmer trailing GOP challenger by 6 points in Michigan governor race: poll GOP political operatives indicted over illegal campaign contribution from Russian national in 2016 MORE’s 2016 presidential campaign debated proposing a $42 per ton carbon tax. She abandoned the idea out of concern for environmental justice, even though the campaign’s own analysis showed that if the revenues were distributed equally, the poorest households would come out $1000 ahead every year. Even the appearance of equity concerns blocked sensible environmental policy. 

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In that same 2016 election, Washington state voters rejected levying a carbon tax and spending its revenues on low-income families: cutting the state sales tax and expanding the earned income tax credit. The Sierra Club opposed it, citing particularly obtuse environmental justice concerns: “Communities of color and low-income people are almost always the ones most impacted by pollution and climate change.”

Huh? If disadvantaged communities are most affected by pollution, a carbon tax that reduces pollution will help them most. And if the revenues from that tax are spent on those communities, even better.

There have been successes. California’s carbon cap-and-trade policy was enacted despite opposition, without clear basis, by environmental justice groups. Now the evidence is in. Rather than exacerbating pollution inequalities, California’s program has begun to reverse the gap, cleaning the air by more in disadvantaged neighborhoods.

This history has lessons for Biden. Environment and justice, both worthy priorities, require different policy tools. Reducing pollution involves pricing carbon, or more traditional regulations, such as emissions standards. Addressing inequality requires social programs, training and education and tax and criminal justice reform. Combining the two has practical and political pitfalls.

Recent administrations have given lip service to environmental justice: setting up offices and signing executive orders and memos, with little practical consequence. But the Biden team seems serious. 

The transition website boasted a prominent “plan to secure environmental justice.” One of Biden’s first-day executive orders insisted that the federal government “must advance environmental justice.” His executive order on the climate crisis mentions environmental justice 24 times. Cabinet nominees have been lauded for their environmental justice credentials. And one potential nominee to head the EPA was reportedly ditched for her lack of attention to the issue. 

If recent history is any guide, that’s a worrisome sign for both the environment and justice

Arik Levinson is a professor of Economics at Georgetown University.