Webinar Recap: The Role of Carbon Pricing in a Just Transition

We’ve long known that climate change disproportionately harms low-income and communities of color. Recent studies show 80% of Latinos live in areas that do not meet Environmental Protection Agency standards for air quality, while 68% of African Americans live within 30 miles of a coal plant. These issues compound into negative health impacts for these communities, which tend to already be overburdened by a disproportionate access to public services.   

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Therefore, when we talk about pricing carbon, or any other climate and environmental policy, it is imperative we do so in an equitable way that combats environmental racism rather than exacerbating it. There are ways to design policy so that it is able to tackle the social and environmental challenges we currently face by identifying the communities and groups who are at the frontlines of these issues, and directing revenue and investment toward them. That’s the message Michelle Romero, the national director of Green for All, had for hundreds of carbon pricing advocates in a Climate XChange webinar earlier this week.

Green for All is a climate justice organization working to build an inclusive green economy to lift people out of poverty, while simultaneously combating climate change. The organization focuses on creating diverse coalitions and pushing forward policies that make polluters pay for the cost of emissions, rather than vulnerable communities and working families.   

“If we aren’t addressing the needs of the people most impacted by pollution and by climate change today — not ten years from now —  then what we’re saying is that we can just write off that society,” Romero warned. “We’re saying, ‘it’s okay if they don’t make it, because on the whole, we’re trying to save a different population with more privilege, more wealth, and more ability to thrive.’”

The Link Between Environmental Issues and Inequality

Romero first became involved in the climate justice movement in the wake of the 2012 Chevron Oil refinery fire in Richmond, California. When she reached out to a friend living in Richmond to ensure her safety, she was shocked to learn such events were so frequent that the city regularly employed an alarm system to alert residents to shelter in place when pollution-related catastrophes occur.

“It had become normalized, because Richmond is a low-income, predominantly African American and Latino community that we, as a society, devalue,” Romero said. She immediately realized the intrinsic connection between climate and environmental issues, and racism and socioeconomic inequality.

“Until that point, I had thought of the environmental movement as something that was really for white, hippy, tree-hugger, UC Berkeley activists who cared about whales and polar bears,” Romero said. “I didn’t really understand how it was affecting communities of color and low-income communities. That’s part of the problem with the brand of mainstream environmental movements.”

The Strategic Case for Climate Justice

While embedding equity in the climate movement is a moral issue, it is also a strategic one, Romero said. Climate activists often fail to reach out to vulnerable communities during the coalition-building process, and therefore make the movement less inclusive and less powerful as a result.

“They’ll go to businesses, they’ll even go to conservatives, before they go to the people who are actually most impacted,” Romero said. “But the opposition — the biggest polluters — is going to our communities first, to low-income and vulnerable communities, and saying, ‘they are going to increase your prices, and you’re not going to see any benefit.’ That continues the narrative that the environmental movement is only for wealthy, coastal, liberal elites,  and that’s what we have to change.”

Designing Equitable Climate Policy

Carbon pricing must therefore be intentionally crafted to rectify environmental injustice. “It’s not enough to say, there’s the potential that you’ll benefit,” Romero said. “We have to, in the actual policy, write criteria that is going to ensure real benefits.”

In California, for example, when cap-and-trade policy was advancing in the legislature, environmental justice groups worked to push forward SB 535, a bill that now guarantees at least 35% of generated revenue directly benefits the most disadvantaged communities.

Romero delineated five principles for effective and equitable climate policy:

  1. Be responsive to the needs of frontline communities. The communities most impacted by climate change today have to be at the table, helping to develop the policy. “If you’ve never lived in a low-income community, if you don’t understand that experience, you just don’t know what’s best for them,” she said.
  2. Set a strong cap or price signal — the social cost of pollution is $40 per carbon ton. “We’re looking at carbon pricing bills that have a much lower pricing mechanism,” Romero said. “Pollution is not free; it costs family in medical bills, depressed property values, etc. We need to make sure polluters are actually paying the true cost of pollution. If our goal is to figure out how to make it appetizing to these polluters as possible, then we’re missing the whole mark and it’s not going to be effective climate policy.”
  3. Revenue generated needs to both prevent additional price burdens on families and accelerate a just transition through targeted community-based investments. Romero said she opposes revenue neutral bills that rebate money back to households on an equal basis. “Someone living in an affluent community doesn’t need to have the same check as someone in a pollution-burning community struggling to make ends meet,” she said. “A check only addresses new, potential harm from your carbon pricing policy, but doesn’t do anything to close the existing divide.” Revenue positive bills on the other hand, can invest in things like transit-oriented affordable developments and improved transportation systems.
  4. Remain accountable to the most impacted communities. “There should be transparency on how funding decisions are made, and there should be participation by communities in all stages of the process, both in crafting the policies and in implementation,” Romero said.
  5. Support a just transition for workers impacted by the economic transition away from fossil fuels, by creating green jobs. “The reality is, that as we close dirty plants, people will lose jobs,” Romero said. “We need to make sure there is adequate job training, and support for people near retirement.”

Adhering to these principles could be difficult, particularly when passing any carbon pricing policy is a political challenge. But it’s absolutely critical that we put forth policies that protects the communities on the frontline of climate injustice. Romero makes an important point about the need to not compromise from the beginning, but rather come to negotiating tables with the best possible policy in order to get these critical provisions and considerations on the table.

This webinar is part of the State Carbon Pricing Network’s Deep Dive Webinar Series. Each month, we explore a carbon pricing topic in depth, bringing in experts and pushing forward the conversation. Be on the lookout for June’s webinar on the Transportation and Climate Initiative, a proposed cap-and-invest program that seeks to cap transportation-sector emissions in ten Northeast and Mid-Atlantic states.