By Sean Penrith
I read the California Environmental Justice Movement’s Declaration in Support of Carbon Pricing Reform in California last week. In particular, this point resonated with me: “The best available science indicates that the planet is warming more rapidly than we understood when the Kyoto Accord was ratified and that reductions in greenhouse gases must be undertaken more quickly and with greater urgency than previously recognized.” Amen to that!
They go on to make their position abundantly clear. The California environmental justice community intends to “fight at every turn all efforts to extend the cap and trade system in California beyond 2020.” The Declaration spells out that it supports a carbon tax in conjunction with direct emission reductions in place of the cap and trade mechanism.
Reading this prompted me to recall a recent workshop my team attended facilitated by Happy Brain Science. Scott Crabtree, the founder of HBS, enthused that conflict was fantastic because when added to healthy doses of communication, the resulting powerful cocktail was a high degree of collaboration toward a common goal. His nifty formula splashed out on the overhead screen: Conflict + Communication = Collaboration.
Clearly there exists a level of conflict between the environmental justice community and the advocates and practitioners in the cap-and-trade market implemented in California under AB 32. Furthermore, I would warrant that the same level of passion for addressing a warming planet immediately, exhibited in the Declaration, is deeply embedded in many of the project developers who work hard to deliver real, verifiable, and permanent emission reductions that count as carbon instruments in California’s cap-and-trade mechanism. We know this firsthand, given that we offer early-stage carbon financing to help many of these projects get off the ground.
The concerns of the EJ community are certainly not without validity. In a 2016 research brief titled Preliminary Environmental Equity Assessment of California’s Cap-and-Trade Program, they rightly point out that large carbon polluters are more likely to be located in poor communities and communities of color. Such neighborhoods have a 21 percent higher proportion on average of residents living in poverty within 2.5 miles of facilities emitting localized greenhouse gases. The EJ proponents have a point.
At a California Air Resources Board (ARB) workshop I attended late last year, members of the Environmental Justice Advisory Committee (EJAC) addressed ARB board members and the attending stakeholders with four credible requests with regard to the 2030 Target Scoping Plan. They asked that the EJ community be considered as real partners, pressed for economic opportunity, encouraged vertical and lateral integration of policies, and advocated for long-term meaningful results.
It made a whole lot of sense to me. At the signing of AB 197, Assemblyman Eduardo Garcia (D-Coachella) commented that climate change polices were beginning to focus on people. EJAC’s request wholly reflected that same sentiment. They wanted to be engaged and become relevant contributors to policy frameworks that ultimately affected people, particularly those people living in lower-income communities that often bore the brunt.
AB 197 requires ARB to “prioritize … emission reduction rules and regulations that result in direct emission reductions” and protect economically disadvantaged communities when designing climate change regulations, with a keen eye specifically to evaluate the social costs of measures it considers. Meeting the incredibly ambitious greenhouse gas goals now required by law in California in the cheapest manner possible is therefore a central equity issue.
The World Bank's 2016 Carbon Pricing State and Trends Report pointed to the fact that greater cooperation through international carbon trading could reduce the cost of climate change mitigation 32 percent by 2030 and 50 percent by 2050. This cost factor is a significant aspect to consider when challengers to the cap-and-trade system propose alternative mechanisms. The task upon all of us is relating, integrating and involving these policies that seek to address a global pollutant with the people who are arguably the most affected.
It’s useful to turn to other programs now underway that have addressed emissions while balancing localized air quality issues. A research report out this month shared the findings on health impacts of the Regional Greenhouse Gas Initiative (RGGI) cap-and-trade program.
RGGI was the first regional cap-and-trade program with nine participating Northeast states that tackled emissions from the power sector. Historical data for the 2009 to 2014 period tracked air pollution and corresponding health impacts under the RGGI program.
Their analysis found positive health impacts -- estimating the avoidance of 300 to 830 adult deaths, 8,200 to 9,900 asthmas exacerbations, around 14,500 respiratory illnesses, and 35 to 390 heart attacks. This tallied up to a health savings for the RGGI states of $5.7 billion and avoided approximately 44,000 lost workdays.
A brand new report from the Center for Law, Energy and the Environment (CLEE) at UC Berkeley School of Law examined the economic impacts of California’s major climate programs on the San Joaquin Valley, made up of eight counties representing 11 percent of California’s population.
The researchers point out that air quality suffers more in this area than in any other place in the state. And they found that the impacts of the cap-and-trade mechanism, the RPS, and energy-efficiency programs netted an overall economic gain of $13.4 billion for the Valley. The findings underscore that fears of negative economic outcomes from greenhouse gas reduction programs are unfounded.
That same Equity Assessment brief mentioned earlier states that, “as regulated entities adapt to a tightening cap, it will see more localized greenhouse gas and co-pollutant reductions.” I would agree. The cap-and-trade program is working as ARB designed it to.
Returning to the Declaration, Recital 11 states, “Excessive use of offsets denies environmental justice communities the benefits of on-site reductions.” Both sides of the argument frame their position without the benefit of the conflict + communication formula. If only we could get into a room together and simply talk this through.
I raised this point with an environmental justice advocate during a call just this month, sharing my take that renouncing and taking on offsets was the wrong approach to the problem. I explained that over the 2013-2015 period, of all the instruments used for compliance under the cap-and-trade system, allowances totaled 372 million and offsets totaled just 20 million. Furthermore, even if offsets were struck from the menu, I have heard it argued that complying facilities would simply use more allowances.
By removing the utility of offsets, a vital cost containment mechanism is removed -- and that may not be positive for the disadvantaged communities who would bear the higher compliance costs. However, it appears that the offset market is a soft target for the EJ community.
It is important to bear in mind that an allowance represents a permit to emit a ton of emissions while an offset represents the verifiable reduction of one ton of emissions.
Derek Six of ClimeCo may have said it best: Offsets should be considered “an opportunity for innovation and practice changes,” a mechanism for engaging people in non-capped sectors, while also providing significant local co-benefits. Projects from approved protocols, such as dairy digesters, are typically located in rural communities that welcome the positive stimulus of offset revenue and jobs. The forestry sector offers the U.S. a significant resource as a carbon sink -- absorbing and storing the equivalent of around 16 percent of our country’s fossil fuel emissions. Engaging in quality emission reduction projects of this kind benefit people across all socioeconomic divides.
Culling figures from an ad-hoc group of stakeholders working in the offset market, a total of 15.6 million tons, representing close to 30 percent of the total issued offsets, have been reduced in California by virtue of an emissions reduction project in the state. The total offset volume of 54.6 million tons came from 46 projects serving 20 separate disadvantaged communities in California and 26 disadvantaged communities outside of the state.
One such community is the Yurok tribe in Northern California. Their sustainable forestry project was the first to be registered under the cap-and-trade forestry protocol. They have been able to earn millions of dollars due to the existence of the offset credit mechanism.
The tribe is using the income to “reacquire ancestral territory and manage it for community benefit, watershed and salmon fishery health, and the wider climate," Brian Shillinglaw of New Forests explained. "The tribe has a significant number of members below the federal poverty line, and thus falls within the definition of a disadvantaged community. The offsets program has made a real difference in meeting their economic and environmental goals.”
As in any conflict, there are two perspectives that compete. Some of the data I pointed to reflects one such position. A recent article shares compelling details of the EJ community's perspective by way of an up-close-and-personal “toxic tour” highlighting the negative impacts on local neighborhoods.
Adding vigorous communication to the conflict between these disparate groups — groups with, let's admit it, much commonality in their goals — may be the first step to achieving real collaboration. I truly hope so.
Image credit: Flickr/Prayitno
Sean Penrith is the Executive Director for The Climate Trust