The Co-Benefits Of Pricing Carbon: How Lowering Local Pollution Can Help Achieve Environmental Justice

by Katie Valentine

Reducing our carbon output isn’t just good for the climate, it’s good for local health. When we price carbon, we potentially reduce other co-pollutants at power plants, oil refineries and industrial facilities — particularly in minority communities located disproportionately located near these pollution sources.

And these co-benefits need to be considered in any carbon pricing mechanism, argues a new report released by the Economics for Equity and the Environment Network.

The report, written by James Boyce of the University of Massachusetts Amherst and Manuel Pastor of the University of Southern California, argues that emission-reduction policies such as cap and trade need to factor in co-pollutants that are often emitted along with greenhouse gases – pollutants such as Sulfur Dioxide, Nitrogen Oxide and particulate matter:

Comparing these rankings to the sectoral sources of carbon emissions, we find that the three industrial sectors that produce the most carbon emissions—power plants, refineries, and chemical manufacturing, which together account for more than 90 percent of industrial CO2 emissions in our sample — also have the most environmentally inequitable impacts on minorities with regard to the air-toxics measure and rank in the top five in population-weighted PM2.5. Any climate policy that reduces co-pollutants along with GHG emissions, therefore, is likely to reduce environmental disparities and thereby advance environmental justice objectives. By the same logic, any regulatory program that sacrifices air quality co-benefits not only will forgo public health savings, but also is likely to violate the official federal directives to consider environmental equity in rule and decision making.

The report recommends strengthening carbon emission reduction targets and redefining the “social cost of carbon” to include the cost of co-pollutants. It also suggests policymakers create ways to monitor co-pollutants, designate high priority zones and facilities, where co-benefits from carbon reduction would be especially high, and recirculate a share of carbon revenue back into the communities to be used for further environmental improvements.

This last recommendation is important: Pastor said since carbon taxes tend to be regressive in nature, some of the revenue would need to go back into the communities.

Pollution sources are disproportionally located in minority communities. The report cited a California study (also done by Pastor) that found that, even when adjusting for income, a person of color is more likely to be located near a co-pollution source and is more likely to live near facilities with greater co-pollutant outputs than a non-Hispanic white person. An African-American household earning $100,000 per year in California is about 3 percent more likely to live near a pollution source than a white family earning $15-$25,000 per year, according to the study.

Past environmental justice-related studies have yielded similar results: a report analyzing metro-Atlanta, Georgia counties found that race was the demographic characteristic with the most direct correlation to pollution, with areas with 75-100 percent non-white populations containing more than twice the amount of pollution points as areas with less than 25 percent minority population.

Second, certain industries emit much higher amounts of co-pollutants than others – power plants account for 80 percent of the CO2 emissions in the report’s sample of 1,542 facilities, along with 65 percent of the particulate pollution and 78 percent of the NOx pollution. Petroleum refineries come second with 7 percent CO2 emissions and 3 percent NOx. This gap, Pastor says, is good news and bad news for policy making.

“The bad news is this is really unequal,” Pastor said at a presentation at the Joint Center for Political and Economic Studies Thursday. “The good news is targeting a few of these bad actors could make a big difference.”

Of course, none of this is relevant unless the U.S. actually adopts some sort of carbon reduction policy, but several states have already agreed to reduce their carbon output in the coming years, and Pastor and Boyce said California’s upcoming cap and trade policy could serve as a model for other states.

“You know the old adage, ‘think globally, act locally?’ We can also think locally and act globally,” Boyce said. When drafting policy for emissions reductions, he said, “we can and should think about the impacts on real communities and real people.”

Katie Valentine is an intern on the energy policy team at the Center for American Progress. She graduated from the University of Georgia.

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