In the summer of 2023, Initiatives intern Skye Bluestein conducted important research with the BEI on the intersection of environmental justice (EJ), policy, and business. The resulting paper posted below provides an interesting and necessary first look at three key areas related to EJ: level-setting on terminology and definitions; major policy drivers and incentives in the US; and examples of EJ being applied by businesses, including areas where policy has resulted in action by businesses, and areas where action is lacking. We are grateful for Skye’s excellent contribution to this important topic and hope that this piece provides a helpful starter guide on the intersection of business and environmental justice.
Summary: Policy Drivers for Environmental Justice in the US – What Businesses Need to Know
Overview
This research sought to answer three main questions:
- Definitions: How is environmental justice defined? Looking at policy and business definitions to understand what terms mean for productive action.
- Policy: What policy is in place in the U.S to drive environmental justice action by businesses? Breaking down the primary environmental justice policy in the U.S. and how it relates to business and environmental justice.
- Examples: How are these environmental justice policy incentives translating into business action so far? Analyzing action by businesses driven by this policy and how it relates to the different spheres of environmental justice action.
Key Definitions
- Environmental Justice (EJ): working to combat climate change and promote climate resilience and investing in the green economy in a way that creates good, well-paying jobs, with a focus on combatting inequality and the disproportionate impacts of pollution and climate change on disadvantaged communities.
- Disadvantaged Communities (DACs): communities “marginalized, underserved, and overburdened by pollution.”[1]
- Environmental Racism: “racial discrimination in environmental policy making, corporate decision making, and/or practice which results in the inequitable distribution of environmental burden along lines of race, class, and geography.”[2]
Policy Summary
- The Inflation Reduction Act of 2022
- The Justice40 Initiative
Examples and Current Focus Areas
- Workforce: BlueOval SK, Form Energy, Hyundai Group, Panasonic, Mission Solar, Qcells, General Electric Vernova, Enel Green Power
- Equitable access to resources: Chargerhelp!, BlocPower, Volta
- Financial investment: Bank of America
Conclusions
- U.S. policies provide an opportunity for businesses to address environmental justice.
- Work proactively against the disproportionate effects of pollution, climate change, and other issues on certain communities.
- There are programs and incentives for businesses to drive successes for environmental justice and the business itself.
- While the current focus is most heavily on the workforce, there are other critical areas for businesses to focus on.
- Adaptation and resiliency, addressing legacy pollution, ensuring equitable access to food, water, transportation, and housing, and engaging with communities to understand the best application of resources.
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INTRODUCTION
Environmental justice (EJ) has risen to prominence in discussions about public policy, business, and environmentalism. The term has especially been established as a key focus in discussions on climate. However, EJ often remains unclear in terms of both its definition and in action. This paper will discuss three areas around EJ, business, and policy. First, this paper will develop clear definitions for this and related terms to ensure conversations about environmental justice are centered around a common understanding of the topic. Second, it will go into major policy drivers of EJ in the United States, especially the Inflation Reduction Act of 2022 (IRA), breaking down specific programs and provisions included in relevant policy. Finally, it will dive into some examples of EJ
as it is currently being applied by businesses, building out clear demonstrations of the benefits that funding from programs in policy like the IRA can have for businesses and EJ. The aim of this paper is to further an understanding of EJ among business practitioners of how relevant policy can benefit businesses and enable EJ action by them.
DEFINITIONS
In discussion about policy, climate, and justice, it is important to understand what terms mean to have meaningful conversations. The White House discusses environmental justice (sometimes called climate justice) in their statement on the Inflation Reduction Act, stating that the IRA will “improve public health, reduce pollution, and revitalize communities that are marginalized, underserved, and overburdened by pollution while increase access to affordable and accessible clean energy.”[7] In Executive Order 14008, which established the Justice40 program, the same key points arise: investing in the economy to create well-paying union jobs, with a focus on disadvantaged communities, combatting climate change and preparing for its effects “across rural, urban, and Tribal areas.”[8] Constellation Energy discusses their EJ policy in the same way, with strong focus on improving equity, reducing impacts on vulnerable populations, and improving health and well-being.[9] Essentially, environmental justice can be defined as working to combat climate change and promote climate resilience and investing in the green economy in a way that creates good, well-paying jobs, with a focus on combatting inequality and the disproportionate impacts of pollution and climate change on disadvantaged communities. Issues like racial and economic equity are central to this, and this will be the definition used for the purposes of this paper.
EJ policy and company practices often uses terms like “communities;” the Justice40 program is based on directing funds to disadvantaged communities. The White House released a memo with guidance surrounding Justice40 in which they define communities as “either a group of individuals living in geographic proximity to one another, or a geographically dispersed set of individuals (such as migrant workers or Native Americans), where either type of group experiences common conditions.”[10] Building from this definition, the White House’s page on Justice40 defines disadvantaged communities (DACs) as communities “marginalized, underserved, and overburdened by pollution.”[11] In the policy and programs discussed later in this paper, when a program refers to disadvantaged communities, it generally follows this guidance. The White House has developed a tool to identify DACs for Justice40 purposes, although it only includes geographically defined communities and Federally Recognized Tribes.[12] The Climate and Economic Justice Screening Tool (CEJST) breaks down the different dimensions that qualify a census tract as a DAC, and its data could be applicable in other contexts as well.
One of the foundational pieces of how EJ applies to the world is understanding the existence of environmental racism. The organization Intersectional Environmentalist defines environmental racism as “racial discrimination in environmental policy making, corporate decision making, and/or practice which results in the inequitable distribution of environmental burden along lines of race, class, and geography.”[13] Communities of color and low-income communities disproportionately face increased levels of pollution and are often more vulnerable to the dangerous effects of climate change. Dorceta E. Taylor’s Toxic Communities breaks down environmental racism as it relates to the siting of industrial and noxious facilities, finding that when you do spatial analysis and compare similar white communities to communities of color, communities of color are more likely to be near noxious facilities.[14] While there is a class dimension to this, she says that “race is by far the strongest predictor for where you‘re going to find disproportionate amounts of [industrial facilities].”[15] She also notes in her book that Indigenous communities are often targeted for certain polluting facilities and are a major group impacted by environmental racism. These trends are exacerbated by the legacy of redlining, the government sanctioned and enforced practices which directly contributed to the segregation of neighborhoods. Understanding the role systemic racism has played is essential to EJ. For environmental policy to really be EJ, it needs to combat the systemic inequalities from sources like environmental racism.
Intersectionality theory, developed by Kimberlé Crenshaw, can help to think about environmentalism as well. Intersectionality is the idea that individuals exist in a crossroads of all their identities, with privilege and marginalization in the intersection between their class, race, gender, sexuality, queerness, cis- or transness, ethnicity, ability, and other facets of identity. The organization Intersectional Environmentalism builds from this theory to argue that intersectional environmentalism means that “social [and] environmental justice are intertwined and environmental advocacy that disregards this connection is harmful and incomplete.”[16] An intersectional lens is necessary for EJ work to effectively be EJ and combat harmful systems.
POLICY DRIVERS IN THE UNITED STATES
As of mid-2023, the two pieces of policy that consistently arise as the most influential in the United States for EJ are the Inflation Reduction Act and the Justice40 program. This section will break down several of the major pieces of these programs as they relate to EJ, especially the IRA.
Inflation Reduction Act of 2022
The Inflation Reduction Act of 2022 has been called the largest investment in climate of the century thus far and contains significant appropriations (approximately $369 billion) and tax incentives. Researchers at the Just Solutions Collective break down the provisions of the IRA and identify about “$40 billion in direct benefits for communities with EJ concerns.”[17] The following funding amounts may not be the entire investment in a program but rather the amount that the Just Solutions Collective identified as EJ specific. Additionally, some details will be included from the Senate Democrats’ summary of EJ in the IRA.[18] The Senate Democrats state that the investments in low-income and DACs work along three tracks: “1. Legacy pollution reduction, 2. Affordable and accessible clean energy for disadvantaged communities, and 3. Better quality of life and good jobs.”[19] Many of the following programs fall into multiple of these categories.
In Title I (Finance) investments, the IRA reinstated the Superfund program, which is projected to raise funding of $11.7 billion over the next ten years.[20] Superfund cleanup applies to EJ because the siting of polluting and hazardous facilities disproportionately occurs in disadvantaged communities, especially communities of color. This program also forces financial responsibility for cleanup onto the polluters, which should continue to raise funding for cleanup. The IRA also includes permanent tax funding for the Black Lung Disability Trust Fund ($1.1 billion over ten years).[21] This condition mainly affects disadvantaged groups, especially low-income people and those who work or worked in coal mines. There are also certain tax credits aimed at electricity production shifts benefitting low-income communities, but the amount of funding thus far is uncertain.
The IRA also allocated $1 billion for improving energy efficiency, water efficiency, and climate resilience in affordable housing, which falls under Title III (Banking, Housing, and Urban Affairs).[22] Affordable housing is geared towards low-income people, a group that is disproportionately people of color because of systemic racism and who are more likely to be unable to pay for these necessary home improvements. Thus, this funding makes it possible for them to use less energy and be in housing that will better weather the changing climate conditions.
The bill also includes allocations for energy and natural resources programs (Title V). This includes a $225 million High-Efficiency Electric Home Rebate Program,[23] geared towards helping low- and moderate-income households upgrade for clean energy and energy efficiency. The U.S. Department of Energy estimates this will “save households up to a $1 billion on energy bills each year and support over 50,000 U.S. jobs.”[24] The bill also funds the Tribal Energy Loan Guarantee Program ($75 million)[25] and increased the available loans from $2 billion to $20 billion.[26] This program “supports tribal investment in energy-related projects by providing loan guarantees,” specifically to federally recognized tribes or a Tribal Energy Development Organization controlled by a federally recognized tribe.[27] There are also $550 million for Bureau of Reclamation domestic water supply projects,[28] which funds the planning and construction of water projects that are primarily aimed at providing domestic water supply to communities and households that don’t have sufficient access. Finally, the IRA includes $15 million for the Office of Insular Affairs climate change technical assistance,[29] which helps with climate change planning and resilience. These programs all aim to ensure equitable access to resources and funding and to make it easier for low-income and disadvantaged communities to improve climate resilience.
The law includes a significant amount of funding in Title VI (Environment and Public Works). Grants to reduce air pollution at ports received $3 billion in EJ funding.[30] These grants help improve air quality and prevent further industrial pollution in communities near ports. The law also allocates $15 billion for the Greenhouse Gas Reduction Fund,[31] which works both to stimulate the economy and make jobs and to deliver “lower energy costs and economic revitalization to communities that have historically been left behind.”[32] There is also $60 million for the Diesel Emissions Reduction Act,[33] rebates which aim to reduce emissions around goods movement facilities and to address the health effects of those emissions on DACs. On a similar note, the act also includes $3 million in grants expressly for funding to address air pollution in DACs, and $50 million to address air pollution in schools in low-income and DACs.[34] The Low Emissions Electricity Program received $17 million in EJ funding[35] ($87 million total)[36] to support DACs in reducing greenhouse gas emissions. The Environmental and Climate Justice Block Grants ($3 billion) fund community-led projects in DACs, aiming to address the “disproportionate environmental and public health harms related to pollution and climate change.”[37] $33 million funded environmental and climate data collection,[38] essential for accurate understanding of the effects of climate change and climate policy on communities. Finally, the Neighborhood Access and Equity Grants were funded with $3 billion.[39] These grants seek to ensure equitable access to transportation, reconnecting communities, combatting the negative effects of transportation and construction projects, and supporting equitable transit planning, all with DACs in mind.[40] These various programs primarily serve to create a better quality of life and good jobs, though several also facilitate clean energy access.
Finally, the Just Solutions Collective identified the programs which apply to Title VIII (Indian Affairs). Indigenous groups in the land known as the United States are an often-overlooked community, especially as it applies to federal aid, despite being one of the most affected by systemic racism and colonialism. Tribal climate resilience programs received $235 million,[41] the specific allocation method of which has yet to be announced. This will promote climate resilience and protect natural and cultural resources, as well as adaptation planning.[42] Similarly, the $25 million for Native Hawaiian climate resilience will help maintain the “integrity and identity of the Native Hawaiian Community while also building the capacity for adaptation, learning, and transformation” in the face of climate change.[43] The IRA includes $150 million for a Tribal Electrification Program,[44] which both provides electricity to not yet electrified homes and transitions systems to zero-emissions.[45] Finally, this bill includes $13 million in emergency drought relief for tribes,[46] which will fund drought relief for tribes affected by a Bureau of Reclamations water project and mitigate lost resources.[47] These programs all work to improve the quality of life for Indigenous groups and to improve climate resilience in these communities.
Justice40
As an executive order rather than a piece of legislation, the Justice40 program does not really appropriate new funds but rather directs the way previously established funds and programs are distributed and implemented. As such, Section 223 of Executive Order 14008 establishes Justice40, directing “40% of some federal investments to disadvantaged communities.”[48] Harvard’s Environmental and Energy Law Program identified about $29 billion as falling under the Justice40 program. The current method for identifying DACs uses the CEJST mentioned before. There is a long list of programs that fall under Justice40, and the full list (as of April 2023) can be found here.[49] The White House highlights many of the key direct EJ benefits from the Justice40 program, and this section will include a breakdown of some of these programs. Many of these funds go directly to state, local, or Tribal governments, but the activities they entail are an opportunity for major business involvement.
First off, Justice40 tackles issues of legacy pollution. With this, it applies to $1.3 billion for Superfund and brownfield sites, as well as addressing lead in drinking water.[50] Similarly, the program directs $725 million to reclaiming old mine lands and another $775 million to plugging orphaned oil and gas wells.[51] These funds will work to reduce pollution and health hazards from these sites, and it will create new jobs and revitalize DACs. Plugging orphaned oil and gas wells will help resolve major ongoing environmental and health hazards, and the grants to states for that purpose prioritize wells near DACs.[52]
The program also establishes that $9.6 billion will be used for Justice40 purposes through the EPA’s State Revolving Funds.[53] This helps “states, Tribes, and territories upgrade water infrastructure to provide safe drinking water and protect vital water resources”[54] and takes a particular focus on DACs and communities facing significant water challenges. The Justice40 application of these funds will contribute to the equitable distribution of resources and improving quality of life.
Bus and Bus Facilities and Low or No Emissions grants have been directed to use $1.1 billion under Justice40. To access these funds, applicants must go into the specific ways that EJ has been incorporated, along with evidence that they are considering and including the needs of DACs and groups underserved by the current transit structure.[55] Additionally, $6 billion are directed to surface transportation projects that have “significant national or regional impact.”[56] This has a strong focus on benefitting DACs and groups currently underserved by transit.
The Bipartisan Infrastructure Law created the $3 billion Weatherization Assistance Program,[57] which uses formula grants managed by the Department of Energy to reduce energy costs for low-income households while creating jobs. Similarly, the Bipartisan Infrastructure Law created about $3 billion for battery manufacturing and clean energy R&D, ensuring EJ analyses and the incorporation of equity and the revitalization of DACs, especially those currently by power plants.[58]
The Building Resilient Infrastructure and Communities (BRIC) program and Flood Mitigation Assistance have $1.2 billion in EJ funding through Justice40.[59] These aim to help communities build resilience for natural disasters, and the White House has modified distribution to ensure a larger allocation for tribes. Finally, the Department of Housing and Urban Development has announced grants totaling $759.7 million for sustainable and affordable housing in DACs, as well as $365 million to address lead paint in homes. All in all, the Justice40 programs largely aim to better the quality of life in DACs and revitalize economies while combatting pollution and its effects.
EXAMPLES
These programs all serve to incentivize business action in different areas to work for EJ goals. Most of the business-level effects from the IRA and Justice40 funding can be seen in the workforce sector, where the primary effect of a program’s funding is in the creation of well paying jobs in communities. This is especially notable where such jobs can help workers in industries that need to be phased out for climate reasons, such as opportunities for current coal miners or oil rig workers.
It is worth noting that, although it is less talked about, there remain many programs that businesses could work with to promote other forms of EJ. One major example is plugging orphaned oil and gas wells, which the government has not been able to keep up with and which often disproportionately affects certain communities, like Indigenous tribes that are not federally recognized and thus cannot easily access funds.[60] Businesses have an opportunity to promote EJ and work with certain programs to make necessary change. Similarly, there is funding for the cleanup of the approximately 450,000 brownfield sites, about half of which are contaminated by petroleum, often from leaking gas stations.[61] These are some examples of major environmental problems where one of the big challenges is someone taking the initiative to work to fix it; businesses have the opportunity to do so, and there is federal funding to support potential cleanups like those mentioned here and many others.
However, much of the focus of policy and media is on manufacturing and the workforce, especially with electric vehicles. One recent example is that the Loan Programs Office in the Department of Energy announced a conditional $9.2 billion loan for BlueOval SK, a subsidiary of Ford and SK On, to build three battery manufacturing plants.[62] Two of these plants will be built in Kentucky and the third will be in Tennessee, and the LPO projects that the project will create 5,000 construction jobs and 7,500 operation jobs.[63] This funding was made possible by the IRA, which raised the budget for the LPO’s Advanced Technology Vehicles Manufacturing (ATVM) Loan Program.[64] It also falls under Justice40, and all three sites are either in or surrounded by DACs,[65] and BlueOval SK is partnering with the state governments of Tennessee and Kentucky to develop programs for new technical schools to train members of these communities for jobs at these facilities.[66] This is a prime example of workforce-focused EJ practices.
There are several other workforce-oriented business activities resulting from EJ programs right now. Form Energy is constructing an iron-air battery systems manufacturing facility in Weirton, West Virginia,[67] made possible by the clean energy manufacturing incentives in the IRA. Weirton, a historic steel town, was chosen because of the “historic steel community’s strong cultural heritage and the site’s direct access to rail, hardened highways, and the Ohio River.”[68] With the anticipated employment of at least 750 people and the revitalization of the community that once housed a major player in the steel industry,[69] this again exemplifies the workforce aspect of EJ policy.
A key driver of similar shifts is that the IRA offers $7,500 tax credits for electric vehicle purchases, provided the vehicles and batteries are manufactured in North America.[70] This and green manufacturing credits have led to Hyundai Motor Group to invest $4-5 billion in building a new battery plant in Georgia, which is expected to employ 3,500 people, in addition to their upcoming $5.5 billion electric vehicle plant in Georgia which will employ 8,100 people.[71] Panasonic has also elected to construct a $4 billion electric vehicle battery assembly plant in Kansas due to IRA incentives, and Wichita State University estimates this project will support about 16,500 construction jobs.[72]
These examples, and many of the ones to follow, again illustrate the workforce focused effects of many of the current EJ projects, but they also make it necessary to consider EJ in terms of industrial siting. These factories, while creating jobs in DACs, are industrial facilities like those which have disproportionately polluted low-income communities and communities of color, a contradiction within the EJ motivation for the siting of these facilities. For these practices to be effective in an EJ sense, businesses need to work to prevent and mitigate pollution from these factories. Otherwise, these factories will cause harm to the DACs that they are supposed to revitalize and create opportunities in.
Thanks to IRA green manufacturing incentives, General Electric Vernova, a subsidiary of General Electric, announced a $50 million investment and about 200 wind manufacturing jobs in Schenectady, New York,[73] with a focus on union operators and aiming to “provide historically under-served communities exposure, education and training in the emerging offshore wind industry.”[74] Mission Solar will be expanding its manufacturing capacity in Texas to 1 gigawatt because of these incentives as well.[75] Qcells is also searching for a site for their 9 gigawatt solar manufacturing facility thanks to IRA funding, which is projected to support about 4,000 construction jobs throughout its construction and around 230 positions once the facility is running.[76] Each of these examples is a direct IRA investment in green infrastructure that also deliberately powers the workforce in an EJ manner.
The IRA includes a bonus tax credit worth up to 10% of a project’s cost for facilities with solar panels containing domestically produced solar cells.[77] This led Enel Green Power to be building a $1 billion solar panel and solar cell factory in Oklahoma, which will have an annual output of 3 gigawatts of solar products and employ 1,000 people by 2025, and could add an additional 900 jobs and 3 gigawatts (to a total of 6) in years following.[78] A part of Enel’s strategy is that they offer the opportunity for landowners and communities to host solar and wind projects on their land, generating construction jobs, new income, and new tax revenue, as well as environmental benefits for the area.[79] This new factory furthers their presence in the United States, directly creating jobs and expanding manufacturing in a way that will lead to increased projects like these in communities.
One company that uses EJ principles throughout its strategy is Chargerhelp!, an electric vehicle charging station company. A central piece of Chargerhelp!’s strategy is training individuals from DACs and “those transitioning from other industries reach these technology-forward jobs.”[80] For the electric vehicle charging network to effectively expand, there needs to be more people trained to help with their maintenance and upkeep. They plan to train over 3,000 people as maintenance technicians in the next two years, primarily from communities that are disproportionately affected by environmental issues.[81] In a similar vein, the company Volta has created an infrastructure planning software called PredictEV to help governments understand travel patterns of the residents of DACs to work out the best locations for electric vehicle charging stations to maximize convenience and use.[82] This tool is designed to facilitate applications to the Charging and Fueling Infrastructure Discretionary Grant Program,[83] with particular focus on goals aligning with Justice40.
The company Blocpower works with EJ principles as well, centering “the clean energy future in low-income communities and communities of color to create jobs and develop…skilled workers.”[84] They install low-infrastructure Wi-Fi networks, as well as other all-electric technologies like heat pumps, with an emphasis on low- and moderate-income buildings.[85] On top of this, they offer a $0 lease for heat pumps[86] and outline the IRA rebates and incentives for customers to be able to more equitably access necessary electrical upgrades and home weatherization. For example, there are heat pump installation tax credits and home electrification rebates, as well as funds from the HOMES Act, which pays homeowners based on how much their home energy use is reduced by retrofits like insulation and heat pumps.[87] Their practices promote equity and incorporate the tools from the IRA and other EJ programs in an effective manner with a focus on adaptation.
Finally, Bank of America committed to a goal of $1.5 trillion in sustainable financing by 2030,[88] a big part of which is helping its employees afford electric vehicles and helping consumers more easily access electric vehicle chargers.[89] The variety of programs that they fund and contribute to are helped also by EJ investments from the IRA, which they say will make it easier for Bank of America to reach its $1.5 trillion goal.[90] This is an example of some of the major ways that a financial institution can engage effectively with EJ practices and programs.
CONCLUSIONS
This paper broke down the definitions for major terminology when it comes to EJ issues, as well as several different programs within the IRA and Justice40 and some of the ways these programs are influencing and promoting EJ practices already. One of the biggest takeaways from this paper should be that United States policies provide an opportunity for businesses to address EJ. Businesses should consider environmental racism and other issues when making decisions, and at the same time should work proactively against the disproportionate effects of pollution, climate change, and other issues on certain communities.
Another key takeaway is understanding that there are programs and incentives for businesses to engage with to further wins for EJ and the business itself. The IRA and Justice40 programs are the two most consequential pieces of policy for EJ that emerged in my research, and they each contribute to making EJ a priority for businesses and the promotion of EJ practices. However, they are not the only policies in place, and businesses should be aware that there is a plethora of options, both within these policies and in others.
While many of the examples that dominate the connection between EJ and business are workforce oriented, such as new factories for solar cells or electric vehicles, there are other important areas for business to work in and policy incentives to do so. Areas like adaptation and resiliency, addressing legacy pollution, ensuring equitable access to food, water, transportation, and housing, and engaging with communities to understand the best application of resources are all areas where business can and should play a major role in promoting EJ practices. While the electric vehicle factories are often the focus of media, action on these fronts and others are crucial and there is policy in place to support and incentivize it. Responsibility for working for EJ falls to every business, and the partnership of business, government, and community will be key in these efforts.
ABOUT THE AUTHOR
Skylar Bluestein (they/them) is a political science student pursuing a Master of Public Administration at American University. They have been working as an intern with HBS Initiatives through DZConneX. Skye is enthusiastic about work on issues like climate justice and queer and trans rights. In their free time, Skye loves to read and write, especially science fiction and fantasy, and they enjoy participating in their university’s theater program.
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