How EPA Can Take a Step Forward on Environmental Justice
The environmental justice movement has grown steadily for four decades, and it has generated significant recent attention from both the public and the President. But despite this long history and recent focus, federal agencies have failed to meaningfully incorporate environmental justice into what is arguably their most important function: crafting regulations.
Agency regulations frequently generate billions of dollars in costs and benefits. Yet how these costs and benefits are distributed is often a question of little concern to the regulating agency. Long focused only on maximizing net benefits, rarely have agencies meaningfully analyzed how a regulation will affect communities disproportionately burdened by pollution, or whether a different policy would better reduce these disparities. The result of this unserious approach is that agencies — and the public — are flying blind when it comes to the distributional consequences of regulations.
But what would serious distributional analysis look like? As we explained in our recent comments on EPA’s Draft Strategic Plan for 2022–2026, serious distributional analysis requires that an agency consider the distributional consequences of multiple regulatory alternatives.
Agencies already develop and consider multiple regulatory alternatives for the purposes of comparing policies’ aggregate impacts. Typically, an agency assesses the costs and benefits of several alternatives and then chooses the one that maximizes net benefits (i.e., benefits minus costs). Thus, if Alternatives A, B, and C yield net benefits of $100 million, $75 million, and $50 million, respectively, the agency would choose Alternative A.
Distributional concerns, however, are treated differently. Instead of examining the distributional consequences of each alternative — i.e., assessing, in each scenario, to whom the costs and benefits accrue — agencies frequently content themselves with a cursory discussion of only the chosen alternative’s distributional impact. But because agencies do not analyze the distributional impacts of the alternatives not selected, they are necessarily ignorant as to whether alternatives that achieve less in terms of overall net benefits nonetheless do more to reduce the pollution disparities borne by disadvantaged communities.
Consider the hypothetical alternatives above. Alternative A is plainly superior to Alternative C in terms of net benefits. Assume, however, that less than 1 percent of Alternative A’s $100 million in net benefits accrue to the poorest 10 percent of Americans. Further, assume that 90 percent of Alternative C’s $50 million in net benefits accrue to the poorest 10 percent of Americans. In this scenario, Alternative C would clearly do a great deal more to improve health outcomes for the least privileged, most vulnerable members of our society, and the regulating agency would have to determine whether this result justifies leaving $50 million in overall net benefits on the table. But, crucially, the regulating agency would only be aware of this potentially desirable trade-off by analyzing the distributional consequences of multiple alternatives.
EPA took the opposite approach in 2011 with the Mercury and Air Toxics Standards, one of the most important regulations of the past decade. The rule’s regulatory impact analysis devoted just 22 of its 510 pages to distribution and environmental justice, and did not examine the distributional consequences of each alternative the agency had considered; only those of the final rule. With regard to these consequences, EPA stated that,
“to the extent that any minority, low income, or indigenous subpopulation is disproportionately impacted by the current emissions as a result of the proximity to their homes to these sources, that subpopulation also stands to see increased environmental and health benefit from the emissions reductions called for by this rule.”
Essentially, EPA assumed that, because the regulation would reduce overburdened communities’ exposure to pollution (as part of the overall pollution reductions generated by the rule), the regulation’s distributional impacts were satisfactory. Yet other alternatives not selected may have yielded far greater environmental and health benefits for groups disproportionately impacted by emissions. Would these better distributional consequences have justified a different regulatory approach than that taken in the final rule? In the absence of serious distributional analysis, it is impossible to say.
For too long, EPA and other agencies have done little more than pay lip service to environmental justice in their regulatory analysis. The result has been that, as EPA’s Draft Strategic Plan acknowledges, “many communities across the country . . . have not received the full benefits from EPA’s decades of progress.”
And yet, despite committing to “Take Decisive Action to Advance Environmental Justice,” EPA’s Draft Strategic Plan offers very few specifics regarding how the agency will better incorporate environmental justice into its regulatory decisionmaking. This lack of specificity echoes EPA’s and other agencies’ failures of the past.
Rather than repeat these failures, EPA could chart a different course by embracing meaningful distributional analysis, perhaps starting with the modest goal of analyzing the distributional consequences of multiple alternatives in one rulemaking within the next year. As we explain in our comments on EPA’s Draft Strategic Plan, this would represent a significant, albeit long overdue, step toward advancing environmental justice in regulations.
