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People of color hit hardest by air pollution: EPA needs to consider this in benefit-cost assessments of policies

This blog was co-authored by Jeremy Proville, Director: Office of the Chief Economist, and Ananya Roy, Senior Health Scientist at EDF.

New analysis finds that prevalent methods of assessing impacts of air pollution underestimate pollution’s health impacts on people of color.

Everyone has the right to breathe clean air. Yet communities of color, falsely labeled as “hazardous” in the 1930s, experienced decades of depressed property values and higher siting of industrial facilities and highways, resulting in higher exposure to air pollution. Environmental racism like this causes unjust, unequal health harms.

Yet the issue of Environmental Justice and its impact on health extends beyond disparate exposure alone. Communities of color are exposed to higher levels of air pollution and are more vulnerable to that air pollution. Racist policies, institutional practices, and disenfranchisement have caused disinvestment in housing, transportation, economic opportunity, education, food, access to health care, and beyond in these communities. All of these overlapping inequities not only manifest in health disparities for these families, but also result in greater health impacts from pollution exposure. In fact, a recent study of 60 million Medicare beneficiaries found that older Black people are three times more likely to die from exposure to pollution than white people when exposed to the same levels of fine particle air pollution or soot.

The federal government usually assumes that air pollution exposes everyone to the same risk. Yet the risks are not the same. The disparate harm caused by pollution to Black and Hispanic communities cannot be ignored, and should be addressed directly in estimating the benefits and costs of pollution policies in order to ensure that everyone’s health and wellbeing is protected.

New research uncovers how pollution impacts have been underestimated

In a new journal article in Environmental Health Perspectives, EDF researchers and Carnegie Mellon University professor Nicholas Muller leverage this new understanding of racial/ethnic disparities in air pollution-caused mortality risks. The work seeks to understand the policy impacts of using race/ethnic-specific inputs rather than using data inputs that average the effects across all populations.

We find that using data inputs that average health response across race/ethnicity (effectively ignoring these real differences across groups) leads to:

  • An underestimate of the overall mortality impacts of air pollution to all populations by 9%
  • An undervaluation of the total costs of pollution across the country by $100 billion.

But this is even more damaging for Black families, as taking into account the larger impact of pollution on their health would increase their estimated pollution-caused burden by 150%.

This has real-world implications for cost-benefit analyses associated with air pollution improvement policies. For example, the Mercury Air Toxics Standard (MATS), a policy that helped reduce pollution from the electric sector, provided much larger benefits to Black people than previously understood: by not accounting for the fact that air pollution is more harmful to these communities, an assessment of the policy would underestimate MATS’ benefits to Black families by 60%.

Changing approaches at the federal level

In EPA’s Policy Assessment for the Reconsideration of the Particulate Matter National Ambient Air Quality Standards (PM NAAQS), the agency has used, for the first time, methods similar to our study to assess the distributional benefits of strengthening the standard.

The results indicate that, when considering both exposure and vulnerability differences across race/ethnicity, older Black people in 30 metropolitan areas bear 27% (13,600 premature deaths) of the mortality burden of PM2.5 at an annual PM2.5 standard of 12 µg/m3, despite making up only 13% of the total population. Strengthening the annual PM2.5 standard from 12 to 8 µg/m3 would result in 4,260 fewer air pollution-attributable premature deaths in Black communities (representing 31% of the total prevented PM2.5– mortality benefits).

Without this type of race/ethnicity-specific information on pollution vulnerability, the EPA would not have been able to accurately estimate the benefits to communities from lower pollution concentrations. This kind of assessment needs to become the rule rather than the exception.

Our data choices matter

Our findings have a very clear implication for policy: when thinking about air quality policy, government agencies should use the most up-to-date race/ethnicity-specific inputs to understand and reduce environmental injustices, especially in the context of estimating benefits and costs of policies. Being agnostic to existing differences in pollution impacts across race/ethnicity obscures the benefits we could achieve by improving our air quality – both for communities of color, but also for society as a whole.

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Energy Justice and the Just Transition in the Power Sector – New Research and Policy Approaches

This post is the first in a series dedicated to the future of the electricity sector and new scholarship supported by the Alfred P. Sloan Foundation. Each post is based on a discussion between select researchers and experts working on relevant policy. To learn more and join one of our upcoming conversations, visit the series website.

While scholars across academia, nongovernmental organizations and think tanks are grappling with transitioning to a cleaner, more efficient, reliable and equitable electric grid, bridging the gap between research and policy is critical to making informed decisions that will impact consumers, communities and the environment.

As we shift from fossil fuels to a cleaner grid, ensuring that no one is left behind and all communities can benefit is critical to a successful transition. EDF and New York University’s Institute for Policy Integrity at the NYU School of Law, with the support of a grant from the Alfred P. Sloan Foundation, are highlighting some of the most exciting research emerging from teams funded by the Foundation in a series of webinars with leading scholars and relevant policy experts.

Our first conversation—which you can watch here—examined how to make the transition for ratepayers, utilities and communities equitable, so people and communities can prosper as we move to cleaner sources of energy. The conversation, moderated by EDF’s Lauren Navarro, Senior Manager, Regulatory and Legislative Affairs, featured a panel including: Dr. Charles Sims, Director of the Energy and Environment Program at the Howard H. Baker Jr. Center for Pubic Policy at the University of Tennessee, Knoxville; Dr. Roman Sidortsov, Associate Professor of Energy Policy at Michigan Technical University; and Raya Salter, an attorney, energy justice advocate and member of the New York State Climate Action Council.

Distributed solar adoption’s impacts on the grid and its customers

Dr. Sims led us through a recent simulation he developed of the Tennessee Valley Authority (TVA), modeling the individual decision to adopt rooftop solar panels and the impacts this adoption would have on grid and electricity costs. His agent-based computational model allowed his team to examine which groups would benefit and whether any groups may be worse off.

One of their important findings was that low-income incentive programs have helped close the gap of solar adoption between low- and high-income customers. However, they also found that net metering programs, which allow solar owners to be paid the full retail rate for solar generation, have widened the gap, likely due to a cost shifting between the two income groups.

New opportunities for old mines

Dr. Roman Sidortsov discussed his research on the barriers and opportunities associated with using underground mines as energy storage sites utilizing the pumped storage hydropower method (PUSH), a key technology to achieving a clean grid.

Dr. Sidortsov’s project examined whether old mines could take advantage of upper- and lower-level reservoirs to pump water through a hydroelectric turbine to generate power using a series of different designs. Leveraging an old mine in Negaunee, Michigan, as a case study, they found that not only could the mine serve the surrounding county’s population of 30,000 people continuously for 3.5 months; it could also to do so at a profit. Dr. Sidortsov sees great potential for nearly 1,000 decommissioned mines across the country to be used as storage facilities, which are already electrified and connected to a transmission system; this solution can help achieve a just transition in communities that would otherwise have been left behind as coal and mining are phased out.

Developing just transition policies in New York

Ms. Salter shared current progress under New York state’s ambitious 2019 Climate Leadership and Community Protection Act. The law, which aims to move the state to an economy-wide net zero goal by 2050, includes several provisions devoted to energy justice.

In addition to the Climate Action Council, the law also created a Just Transition Working Group, comprised of justice advocates, labor representatives, utilities and others. This group is charged with identifying electric generating facilities that may close due to the transition, studying job and workforce needs and providing recommendations to the council for how to best handle the transition equitably.

New York state is, as Ms. Salter noted, a tale of two grids. The upstate region benefits from greater access to hydroelectric power and renewables, while regions downstate draw an overwhelming percentage of their power from fossil fuels. She and others on the council are looking at ways to improve transmission from upstate to western and downstate regions to take advantage of the renewable generation pockets necessary to achieve the state’s goals. She and her colleagues are also hoping to address the need for long-duration storage to fill some of the renewable gaps the state experiences in winter.

Connecting research and policy

Ms. Navarro asked Drs. Sims and Sidortsov how their research directly applied to Ms. Salter’s policy work in New York and beyond. Dr. Sims explained that he initially gravitated toward the transition to solar, due to the existing gap in low- and high-income customers’ adoption. “There is also the fear that utilities will have to raise their rates,” disproportionately impacting low-income customers. Avoiding this scenario will depend on policy action and a greater understanding of any potential negative impacts caused by certain policies encouraging greater adoption of rooftop solar; academic research can thus help highlight any unintended outcomes from policy adoption.

Dr. Sims also sees connections between the retirement of coal plants and the subsequent impacts on local communities and low-income rate payers in rural communities, who may face price shocks due to large-scale adoption in higher-income, urban areas. He sees a lot of opportunity study how different policies can improve conditions for lower-income consumers.

Dr. Sidortsov said his work was conducted with the transition in mind, as he specifically considered the layered benefits for communities who may have been negatively impacted by the shuttering of mines. He hopes PUSH storage facilities could turn existing liabilities into assets, so communities that have been overburdened by risk could experience renewed prosperity.

Panelists also discussed the importance of listening to community concerns. Ms. Salter explained that energy justice goes beyond reducing greenhouse gas emissions. For mass adoption to take place, we need to consider aspects that may prevent communities from welcoming renewable facilities, especially as policymakers consider how some have already been unequally harmed by the fossil fuel industry.

Overall, this conversation showed how research can contribute to identifying equitable policies, but also the importance of having policy guide new avenues of research. When it comes to achieving a clean and efficient electric grid, we must think about the role that this transition plays in helping improve equitable outcomes, and whether policies may exacerbate existing inequities.

Looking ahead to stakeholders

The panelists’ interest in communities is apt, as it will serve as the next topic in our series. Our upcoming policy and research conversation, to be held December 16th, 10:30am ET, will examine public acceptance and governance topics for energy policy. Moderated by Dr. Elizabeth Wilson of Dartmouth, the panel includes Dr. Tanya Heikkila (University of Colorado Denver), Dr. David Konisky (Indiana University), Dr. Kate Konschnik (Duke University) and Amanda Ormond (Western Grid).

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Solar power can have positive health impacts for Chile’s most vulnerable. Here’s how.

We know that solar power helps replace fossil fuel generation, getting the world closer to the international goal of keeping global warming to 1.5°C. But does it have other benefits? What happens to people’s health if we replace coal generation with solar power?

The Atacama Desert in northern Chile is one of the world’s most extreme landscapes. It is often used by NASA and film companies to stand in for Mars and is the sunniest place on Earth. It is also the best place in the world for solar power.

Since 2012, Chile has installed over 3300MW of solar power throughout the country, with a large percentage built in the regions in and surrounding the Atacama Desert. This rapid introduction of large-scale solar capacity makes the Atacama region a perfect case study for us to look at the health benefits of solar power replacing fossil fuel generation.

Due to Chile’s heavy reliance on fossil fuels, the country’s power sector releases large amounts of local air pollutants, including sulfur dioxide (SO2), nitrogen oxides (NOX), mercury (Hg) and particulate matter (PM). All of these pollutants are associated with adverse health effects, along with increased hospital admissions, mortality risks and threats to life expectancy. Annual air pollution in Chile generally exceeds life-threatening levels with daily average fine PM concentrations well above World Health Organization guidelines. Thus, Chile’s growing reliance on renewables is extremely important from a health perspective.

To that end, my co-authors and I have spent the past two years investigating the health benefits that solar generation produced in northern Chile due to this massive solar expansion. Our research found that the investments in solar capacity led to a displacement of daily coal- and gas-fired power generation. We estimated a direct, causal link between greater installed solar capacity and fewer cardiovascular and respiratory admissions due to reduced pollution from fossil fuel generation. Importantly, reductions were largest among the most vulnerable age groups: infants, children (ages 6–14), and seniors.

To estimate the effect, we relied upon wind direction to identify which cities were downwind of and close to the fossil fuel plants we found to be displaced by solar. For the populations living within 10km of displaced plants, we estimate that 1GWh of solar generation reduced annual respiratory hospital admissions by 13% on average. Similar findings, with decreasing magnitudes, occur in cities 50km and 100km downwind of displaced coal and gas-fired generation.

Our conclusions remained unchanged after several robustness checks, including the use of cities upwind of displaced facilities and those downwind of non-displaced units, as well as the use of hospital admissions of patients with diseases presumably not related to air pollution.

This research quantifies some of the benefits that solar power can provide in terms of reducing health impacts of air pollution in developing nations, yet our findings are likely an underestimate of the total health benefits that can emerge from solar generation. This is because:

  • Chile’s northern region has limited healthcare infrastructure. This means any reduction in hospitalizations increases the number of hospital beds available, which helps reduce the number of untreated unrelated injuries and illnesses.
  • Reductions in air pollution exposure for young children and infants has a lifelong benefit in terms of reduced illnesses and improved economic outcomes.
  • As demonstrated in both the US and India, disadvantaged populations often live closer to large air polluters. If this is the case, improvements in air quality may also help to reduce inequality.
  • Though the area we studied has relatively low population density, we were able to estimate a significant benefit on health outcomes- thus, solar’s contribution to cleaner air will produce even larger benefits in more populated regions or countries.     

Our research is a working paper published in the Environmental Defense Fund Economics Discussion Paper Series. You can download the paper for free here. This blog was co-authored with Nathaly M. Rivera, Research Fellow at the University of São Paulo.

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Why the value of reducing health risks in China is rising

This post is a collaboration with Yana Jin

Since 2013, the Chinese government has changed its approach to regulating pollution, including providing the public greater access to information about their own exposure. This increased visibility into pollution exposure can affect citizens’ perceptions of how pollution affects their own health, and their desire to avoid these negative health outcomes. Understanding this shift in perception can tell us not only about what’s happening in China today, but also how developing countries may react to greater information about pollution.

Yana Jin, EDF’s new High-Meadows Economics Fellow, recently published a study in the Journal of Environmental Economics and Management, in which she and coauthors estimate Chinese citizens’ willingness to pay (WTP) to reduce mortality and morbidity risk associated with air pollution exposure. Specifically, the authors estimate a Value of a Statistical Life (VSL) and a Value of a Statistical Illness (VSI) of RMB 5.54 million ($1.58 million) and RMB 0.82 million ($0.23 million), which are higher than earlier estimates in China.

EDF’s Beia Spiller recently chatted with Yana about her paper and discussed the importance of the findings for policy making.

Beia: What does Value of a Statistical Life (or Value of a Statistical Illness) imply? Why do we need to put a value on human health?

Yana: The Value of a Statistical Life, VSL (or Value of a Statistical Illness, VSI) describes how much individuals are willing to pay to reduce the risk of premature death (or illnesses). Obviously, there is no market value for human health; VSL and VSI provide policymakers a common metric for valuing improvements in health outcomes.

Beia: How can VSL and VSI be used in policy making? What is the implication for environmental policy?

Yana: VSL and VSI provide a basis for conducting regulatory impact analyses and benefit cost analyses. For most environmental policies, the co-benefits of improved health outcomes dominate the total regulatory benefits (or the social cost of inactions). For example, in 2020 the total annual benefit of the Clean Air Act in the United States was estimated to be $2 trillion (in 2006 prices), more than 30 times the law’s total compliance costs; 90% of these benefits are due to reductions in mortality and morbidity attributable to ambient air pollution. This conclusion is based on an analysis using US-specific VSL and VSI estimates as part of the key parameters.

Extra attention is needed for VSI. Unlike premature mortality, which already receives lots of empirical attention, WTP for morbidity risk reductions is poorly understood in developing and developed countries. Solid VSI estimates can overcome the shortcomings of current alternative proxies in policymaking, such as the medical cost of illness and work day losses, which often undervalue the true social cost of non-fatal illnesses.

Beia: As you mention, estimates of the Value of a Statistical Life in the US (approx. $8-10 million) already exist. Why is it important from a policy perspective for this sort of analysis to be conducted for the Chinese population separately?

Yana: There is no one-size-fits-all VSL. Various factors influence VSL, including income and risk context of the affected population. Given that 92% of all pollution-related mortalities occur in developing countries, trying to draw conclusions for these populations from valuations in developed countries will involve substantial uncertainty.

Because the VSL is affected by both underlying air pollution levels and income, the VSLs will be different across China and the US. Furthermore, there are likely significant differences in the two populations’ understanding and awareness of the significance of air pollution’s impacts on health. For these reasons, we need studies based on the Chinese population and their specific setting to understand how they value risk reductions associated with improvements in air quality.

Beia: You find a much (almost 10x) smaller VSL in China than what has been estimated in the US. Does this mean that the Chinese morally value improvements in health less than populations in the US?

Yana: Not at all. Because the Chinese population currently has a much lower income than those in the US, their smaller household budgets constrain them from allocating the same amount of money to improvements in health. Though the difference in VSLs across countries seems huge right now, the VSL is highly elastic to per-capita income. This implies that as Chinese populations become richer, one can expect to see a sharp increase in Chinese VSL. Indeed, the VSL in the current study is already more than 10 times higher than early studies in the 1990s-2000s reported in China.

Beia: You test whether people have different willingness to pay to avoid specific illnesses (heart disease, stroke, or obstructive pulmonary disease) due to air pollution exposure, but find no significant differences across illness. Why is this an important policy question, and what would have been the implication for environmental policy had the opposite been true?

Yana: Whether the values across illnesses are different is of high policy relevance. For example, the risk of heart disease and stroke during extreme haze episodes is disproportionately higher than for other illnesses. If their associated VSI and VSL are also higher, this would imply that short-term policies that aim to curtail pollution spikes could be exceedingly beneficial, even though the transient effects do not reduce other more chronic, cumulative, long-term risks, which would only be affected by a steady decrease in annual average air pollution.

However, we find that the estimates are the same across illnesses. Therefore, policymakers can focus on the risk levels, and do not need to set illness-specific resource allocation priorities from the economic valuation perspective when managing air quality.

Beia: How could your VSL and VSI findings be used now?

Yana: Since 2013, the Chinese central government implemented its Air Pollution Prevention and Control Action Plan, investing 1.84 trillion RMB to improve air quality. This led to a significant drop in air pollution levels over the years in historically polluted Northern China, thereby generating marked health improvements. Our updated VSL and VSI can help to quantify and compare the observed health benefits with the costs of the policy that enabled these air quality improvements.

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How innovative policies can help clean the transportation sector

As climate week gets underway, policymakers should prioritize ways to reduce emissions from one of the biggest contributors to greenhouse gases: the transportation sector. A diverse group of stakeholders recently came together to discuss opportunities to do just that.

Transportation accounts for nearly one third of all greenhouse gas emissions in the U.S. and a substantial share of local pollution in urban areas. Not only do these emissions greatly contribute to climate change, they can cause significant health concerns, from respiratory and cardiovascular illnesses, to premature mortality. Furthermore, communities of color and low-income communities have suffered much more from the health and well-being impacts of transportation-related air pollution than non-disadvantaged communities. Thus, it is both a social and environmental imperative to clean our transportation system.

However, cleaning our transportation system is not a trivial task—the effects of pollution vary widely in space and across different communities; the impacts of pollution are felt locally, regionally and globally; and multiple challenges across many different sectors of our economy to achieving this goal still exist. We will need a coordinated, multi-sector approach, with major investments and targeted policies.

To discuss these solutions and explore opportunities, Resources for the Future, Environmental Defense Fund, and Duke University’s Nicholas Institute hosted a two-day virtual workshop in July 2020. We invited individuals from all over the country, and from different sectors, including local governments, non-governmental organizations, stakeholder and community groups, industry, and academics, in an effort to increase communication across sectors, explore diverse policy solutions, and hear from different points of view.

Though we heard diverse approaches and assumptions from the different speakers and participants, we all agreed on the following: Cleaning our transportation system is a necessary and urgent action, and we can leverage this transformation to achieve even more improvements in social outcomes, above and beyond those caused by the transportation sector.

Panel I: Effectiveness and Behavioral Responses to Carbon Pricing and Vehicle Regulations under Existing Policies  

The first panel of the day discussed the effectiveness of carbon pricing and vehicle regulations on cleaning the transportation system, given existing policies and the nature of our “business as usual” future.

One of the main takeaways: though carbon and gasoline taxes can and have had an impact on reducing gasoline consumption, these taxes won’t be enough to achieve the major structural changes needed for the sector.

Other policies, such as vehicle efficiency standards and scrappage programs (like cash-for-clunkers), can help ensure older vehicles are replaced with better, more efficient (or even electric) alternatives, and can also work in conjunction with gasoline and carbon taxes to help achieve a cleaner transportation system. However, these programs may cause some unintended consequences if not pursued cautiously or developed jointly with policies that increase access to alternative modes of transportation.

Panel II: Distributional Effects of Transportation Policy

The workshop’s second panel focused on how to structure transportation policies to reduce the inequalities that transport-related pollution creates among different communities. The speakers highlighted the many different types of inequalities created by unjust and problematic housing and transportation policies, magnified by disadvantaged communities’ greater exposure to pollution, and how the transformation of the system can be leveraged to improve these distributional outcomes.

To be able to achieve these improvements, several steps must be taken, including:

  • Use data and modeling to identify disadvantaged communities most affected by transportation pollution;
  • Actively engage with community and environmental justice groups from the beginning when setting policy in order to identify their most pressing issues and concerns and ensure they have a seat at the table;
  • Conduct research to identify the most beneficial policies and actions for these communities and address their concerns;
  • Work to avoid unintended consequences of transportation policy that may harm disadvantaged communities in our quest to green the transportation system.

Panel III: Investments on Carbon Revenue: Efficacy and Impacts Across Groups

Our third panel explored the many avenues for investments of revenue raised from policies such as a carbon tax. There exist almost infinite options for investments- in both the private and public sectors, to individuals or corporations, for education and behavior modification, to infrastructure and technology, and so much more. Identifying the investment that provides the largest bang for buck is a challenge worth pursuing in order to maximize the benefits of our clean transportation transformation.

One of the difficulties is understanding the distributional impacts of investments. It is important to identify who will benefit the most from these investments, and whether there are important spillovers such as job creation. When the benefits of an investment are diffuse or long term, this can create a political challenge in its implementation. Furthermore, understanding the policy context around the investment is key: non-transportation-related policies such as zoning or housing regulations can affect the benefits of any investment in this space. For example, changing zoning rules could improve access to alternative modes of transportation, making investments in electric vehicle charging stations and public transit more effective at shifting driving away from private, fossil-fueled vehicles.

Panel IV: Changing the Rules: State and Local Policies and Potential Interactions with Carbon Pricing

The final panel of the day discussed how non-carbon pricing policies at the state and local level may interact with existing carbon policies, such as the Regional Greenhouse Gas Initiative (RGGI, a regional cap and trade program covering GHG emissions from 10 states in the northeast). Though cap and trade or carbon pricing sends a price signal to reduce carbon emissions, it alone may not be enough to achieve the large transformation required.

Alternative policies, such as the low carbon fuel standard, congestion pricing, or even policies outside of the transportation sector can help to bring about even greater reductions of transportation emissions, especially when combined with carbon pricing policies.

Electricity sector policies are an especially important one to get right. As our transportation system becomes less reliant on gasoline and more reliant on electricity for fueling, we need to ensure that the electric sector is clean (and carbon pricing can play an important role in achieving this outcome), while also implementing policies to reduce the costs that charging vehicles can place on the system.

A Vision for a Clean Transportation Future

This workshop made a strong case for urgent action—the emissions associated with transportation are too large and affect too many vulnerable communities to allow the status quo to continue unabated. Many different types of policies can be implemented, and even in the face of political challenges – particularly at the federal level – cities and states across the country are already taking action.

The speakers envisioned a future where transportation is clean; where all individuals across the country, regardless of where they live, have mobility access and alternatives in their modes of travel; where investments are made with an eye towards maximizing the public benefit and ensuring those most disadvantaged are uplifted; and where all communities have a voice in shaping the path of this clean transformation. This clean future exists; now it is up to us to shape policies in order to achieve it.

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