Climate Change: The Equity Problem
By Michael P. Vandenbergh and Brooke A. Ackerly
INTRODUCTION
Income disparity in America affects the potential for environmental reform. When environmental standards are imposed on industry, the cost of consumer goods tends to rise, and low-income consumers can be priced out of important goods and services. This anticipated burden makes regulators less eager to impose standards that they know will raise prices. Opponents of regulation frequently invoke this equity argument in aid of their opposition argument. Environmental standards that make certain goods more energy efficient, for example, will be less effective if many consumers cannot purchase the more efficient goods. With individual behavior accounting for a large share of many pollutants and more than fifty million Americans (roughly eighteen percent of the population) living at or near the poverty line, this gap in regulatory effectiveness is significant.
Climate change dramatically illustrates this problem. Over the last several years, many scientists and policymakers concluded that reducing the risk of catastrophic climate change will require prompt and substantial reductions in greenhouse gas (GHG) emissions. In the United States, individual behavior accounts for at least one-third of the emissions of carbon dioxide, the leading greenhouse gas, and reducing those emissions will require individuals as well as industries to change their behavior. Many of the potential solutions will increase the prices of consumer goods, whether in the form of carbon taxes, efficiency standards for motor vehicles and appliances, more stringent building codes for single family homes and apartments, or carbon cap-and-trade requirements for electric utilities. Although some of these programs will save money for consumers over the long run, many will require up-front expenditures of funds that low-income individuals simply cannot afford to make. In the absence of measures to address how climate change policies intersect with pre-existing financial inequities, these policies will be less likely to be adopted, and they will not achieve their regulatory potential if they are adopted. As with other environmental regulations, objections to climate change measures will come from both sides of the political spectrum. Those on the right will contest the seriousness of the climate change threat or object to government intervention, and those on the left will raise the equity concern despite the risk of delaying reductions in GHG emissions.
This Essay examines the climate change equity problem and the legal options for addressing it. Recognizing the normative and political import of environmental justice concerns, we seek an approach to curbing individual carbon emissions that enhances the ability of those with greater discretion in their consumption patterns to enable changes in consumption among those with less. Although many options are available, the most promising in the near term is the extension of the growing retail carbon offset market to those offsets generated by individuals and households, and not industrial sources. We examine the viability of a family of options based on the creation of an equity offset market that would enable donors to subsidize the purchase of more efficient (and thus less carbon-emitting) goods by low-income individuals. We then draw on the growing private governance literature to examine the potential role of private standard-setting and certification schemes for this new carbon equity offset market, and we suggest that a private offset scheme ultimately might be incorporated into the proposed federal cap-and-trade schemes that now target industrial sources.
The conceptual value of approaching the equity issue in this way is significant. It encourages a sense of shared environmental responsibility, which in turn could have beneficial effects on polluting behaviors. At the same time, it removes the incentive to use “we-they” classifications that stymie legislative reforms while placing blame on sectors of the society that have the least ability to modify their behavior.
Income disparity in America affects the potential for environmental reform. When environmental standards are imposed on industry, the cost of consumer goods tends to rise, and low-income consumers can be priced out of important goods and services. This anticipated burden makes regulators less eager to impose standards that they know will raise prices. Opponents of regulation frequently invoke this equity argument in aid of their opposition argument. Environmental standards that make certain goods more energy efficient, for example, will be less effective if many consumers cannot purchase the more efficient goods. With individual behavior accounting for a large share of many pollutants and more than fifty million Americans (roughly eighteen percent of the population) living at or near the poverty line, this gap in regulatory effectiveness is significant.
Climate change dramatically illustrates this problem. Over the last several years, many scientists and policymakers concluded that reducing the risk of catastrophic climate change will require prompt and substantial reductions in greenhouse gas (GHG) emissions. In the United States, individual behavior accounts for at least one-third of the emissions of carbon dioxide, the leading greenhouse gas, and reducing those emissions will require individuals as well as industries to change their behavior. Many of the potential solutions will increase the prices of consumer goods, whether in the form of carbon taxes, efficiency standards for motor vehicles and appliances, more stringent building codes for single family homes and apartments, or carbon cap-and-trade requirements for electric utilities. Although some of these programs will save money for consumers over the long run, many will require up-front expenditures of funds that low-income individuals simply cannot afford to make. In the absence of measures to address how climate change policies intersect with pre-existing financial inequities, these policies will be less likely to be adopted, and they will not achieve their regulatory potential if they are adopted. As with other environmental regulations, objections to climate change measures will come from both sides of the political spectrum. Those on the right will contest the seriousness of the climate change threat or object to government intervention, and those on the left will raise the equity concern despite the risk of delaying reductions in GHG emissions.
This Essay examines the climate change equity problem and the legal options for addressing it. Recognizing the normative and political import of environmental justice concerns, we seek an approach to curbing individual carbon emissions that enhances the ability of those with greater discretion in their consumption patterns to enable changes in consumption among those with less. Although many options are available, the most promising in the near term is the extension of the growing retail carbon offset market to those offsets generated by individuals and households, and not industrial sources. We examine the viability of a family of options based on the creation of an equity offset market that would enable donors to subsidize the purchase of more efficient (and thus less carbon-emitting) goods by low-income individuals. We then draw on the growing private governance literature to examine the potential role of private standard-setting and certification schemes for this new carbon equity offset market, and we suggest that a private offset scheme ultimately might be incorporated into the proposed federal cap-and-trade schemes that now target industrial sources.
The conceptual value of approaching the equity issue in this way is significant. It encourages a sense of shared environmental responsibility, which in turn could have beneficial effects on polluting behaviors. At the same time, it removes the incentive to use “we-they” classifications that stymie legislative reforms while placing blame on sectors of the society that have the least ability to modify their behavior.