The Justice40 Initiative: Opportunities for Environmental Justice in the State of Maryland
Contributors: Vivek Ravichandran, MPH, Rose Albert, and Sacoby Wilson, PhD, MS
The year 2020 will forever be remembered for the devastation of the pandemic and extreme weather events (namely hurricanes, wildfires, and summer heat waves) that swept the nation, and many of these events were the worst in recorded history. These events are expected to become more frequent and severe over the course of the century. Much like the coronavirus pandemic, disadvantaged communities across the country are disproportionately subjected to climate change-related burdens, with major impacts on their health and wellbeing.
According to the Union of Concerned Scientists, the US has been one of the planet’s leading contributors of CO2 emissions (Figure 1). This presents urgency for the country to serve as a model leader in the global fight against climate change. President Biden is critically positioned to promote climate equity and environmental justice throughout the COVID-19 recovery. After proposing an “all of government approach” for a suite of environmental justice concerns within his early policy proposals, President Biden is now following through with the “The Biden Plan To Secure Environmental Justice and Equitable Economic Opportunity in a Clean Energy Future.”
Figure 1: Share of Global CO2 Emission by Country, Revealing a Need for the US to Reinstate its Status as a Global Leader in the Fight Against Climate Change and Uptake of Renewable/Clean Energy
Executive Order 14008 and the Justice40 Initiative
On January 27, 2021, Biden announced Executive Order 14008: Tackling the Climate Crisis at Home and Abroad. EO 14008 reentered the United States into the Paris Agreement, ratified the Kigali Amendment to the Montreal Protocol, and recommitted the U.S. to international leadership in climate solutions through forums such as the 26th UN Climate Change Conference of the Parties (COP26).
EO 14008 also set national goals; the U.S. strives to have a carbon-pollution-free energy sector by 2035, a net-zero economy by 2050, and complete elimination of federally funded fossil fuel subsidies by FY2022. The order created the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization and White House Environmental Justice Interagency Council. Under EO 14008, each agency must create a Climate Action Plan.
Executive Order 14008 also introduced the Justice40 Initiative, stating disadvantaged communities should receive 40% of benefits from federal investments in clean energy and transit, sustainable housing, training and workforce development, clean water infrastructure, and legacy pollution remediation and reduction.
The White House Environmental Justice Advisory Council (WHEJAC) provided interim recommendations for agency actions, definitions for “disadvantaged communities” and “investment benefits,” and guiding principles for use of funds. The Center for American Progress, the Equitable and Just National Climate Forum, and the New School’s Tishman Environment and Design Center also provided Justice40 Recommendations for identifying environmental justice communities, developing a Climate and Economic Justice Screening Tool, maximizing federal investment benefits, and utilizing an Environmental Justice scorecard to ensure accountability. The Center for American Progress specifically describes targeted Justice40 investments and benefits for dismantling systemic racism.
New York, which has been among the nation’s leaders in climate policy, has recently taken extra measures to understand the disadvantaged communities they vow to aid. New York has expanded on previous metrics used to define disadvantaged communities, such as median household income and % poverty, by identifying about 150 “ingredients” of disadvantaged communities. These criteria can inform environmental justice screening and mapping tools in prioritizing communities, and this approach can be replicated across states.
On July 20, 2021, the Office of Management and Budget, Council on Environmental Quality, and National Climate Advisor issued interim implementation guidance for the Justice40 initiative developed with WHEJAC under EO 14008. A new Climate and Economic Justice Screening tool will be developed with the Council on Environmental Quality and United States Digital Service to identify disadvantaged communities using variables in Table 1. The memorandum provides other critical definitions (Table 1), examples of benefits within each investment category, and suggested program modifications to maximize benefits to disadvantaged communities.
The benefits calculation is still being developed and remains elusive; each agency is given 60 days to submit an assessment of covered programs and a description of benefits and 150 days must submit methodology for calculating benefits. Accountability mechanisms are not described for tracking investments and progress. However, the guidance promotes a community engaged approach, requiring specific agencies and departments to create a stakeholder engagement plan.
As national guidance and implementation of the Justice40 Initiative continues to develop, states can adopt similar initiatives to protect and remediate environmental justice communities. Not only can states utilize federal funding that will become available as a result of future investments, but also states can create locally relevant policies that microtarget the unique needs and capacities of their communities. Figure 2 shows critical sectors warranting reinvestments voiced by a convening of environmental justice (EJ) advocates, academic experts and national environmental groups. States such as New York, California, and Virginia have already demonstrated leadership for restorative policies that invest in disadvantaged communities; the Justice40 Initiative was modeled after New York’s Climate Act. Case studies of these bills demonstrate how Justice40 derivatives can be implemented at the state level.
Figure 2: Critical sectors disproportionately affecting low-income communities of color that warrant investment in order to meet Justice40 metrics (Center for American Progress, 2021)
New York State
In 2019, Governor Andrew Cuomo signed the Climate Act, requiring New York to reduce greenhouse gas emissions by 40% by 2030 and no less than 85% by 2050, relative to 1990 levels. New York’s goal is to have 100% zero-emission electricity by 2040. The Climate Act created the Climate Justice Working Group to engage with state EJ organizations and alliances, advise the Climate Action Council, and maximize economic and environmental benefits. The Climate Act also has a goal for 40% of benefits from funding for clean energy and energy efficiency, housing, workforce development, pollution reduction, low income energy assistance, transportation and economic development go towards disadvantaged communities. For clean energy programs and investments, at least 35% of benefits must go toward disadvantaged communities. The bill acknowledges localized impacts to prevent creating sacrifice zones, stating these regulations should “not result in a net increase in co-pollutants emissions or otherwise disproportionately burden disadvantaged communities.”
California
In 2018, California passed the 100 Percent Clean Energy Act of 2018 (Senate Bill [SB] 100), which required renewable energy and zero-carbon resources to supply 100% of electric retail sales to end-use customers by 2045. It also created a reporting requirement for the California Energy Commission (CEC), California Public Utilities Commission (CPUC), and California Air Resources Board (CARB) for every four years until 100% renewable energy is achieved. Another key takeaway of the 2021 report is the acknowledgement for the role of industries impacting the environment, at least in the short term. It suggests that maintaining some degree of natural gas capacity will minimize costs while ensuring a smooth transition to 100% clean energy. This multi-pronged approach can serve as a bipartisan approach that appeases all parties (industries, EJ advocates, lobbyists) and facilitate future reform. The 2021 report also states recommendations towards bill progression including: utilizing emerging resources, such as offshore wind and hydropower technologies, and demand flexibility. Demand flexibility is an emerging “smart power” technology in which consumers are notified when the grid system is overworked to reduce electricity consumption (or offered rebates when utilizing electricity at certain times of the day), enabling optimal power use. Demand flexibility is proven to be cost-effective.
Virginia
Virginia’s 2020 Clean Economy Act (HB 1526/SB 851) creates a mandatory renewable energy portfolio standard program (RPS) for electricity to be generated from 100% renewable sources by 2050, making Virginia a leader in the region as the first state in the South to commit to 100% clean energy.
Virginia also joins a group of many states, such as New York and California, that have implemented provisions to provide benefits to EJ communities from carbon market systems such as the Regional Greenhouse Gas Initiative (RGGI). The Clean Economy Act describes a cap-and-invest system wherein half of total revenues from RGGI auctions fund energy efficiency programs for low-income, disability, veteran, and age-qualifying populations. The remaining revenues are to be distributed between local coastal resilience efforts (30%), additional energy efficiency measures (16%), and administration (4%). There are reporting requirements to show the act does not disproportionately burden minority or historically disadvantaged communities, and these groups must be considered in energy and job training programs and siting of renewable energy facilities.
The Commonwealth Clean Energy Policy (SB 1284) acknowledges the need for centering health, safety, and welfare in reaching net zero emissions by 2045 and encourages proactive measures to avoid exacerbating energy inequities. HB 2330 establishes a Percent of Income Payment Program (PIPP) and PIPP Fund for energy efficiency and confers authority to the State Corporation Commission to analyze, provide recommendations on, and create programs to address deficiencies in federal, state, local, or nonprofit programs for meeting energy reduction goals.
Virginia’s HB 1919 allows localities to establish green banks to spur clean energy implementation and increase accessibility. Green banks have been utilized in multiple states including Rhode Island, Connecticut, New York, and New Jersey. Since Connecticut’s green bank was established in 2011 under SB 366 Public Act 11-80, the $294.2 million Green Bank has had significant impact, with $1.65 billion in private investments, 434 MW of clean energy growth, almost 9 million tons of carbon reductions, and hundreds of millions of dollars in public health value. At the federal level, the newly introduced Clean Energy and Sustainability Accelerator (HR 806) would fund green banks and require at least 40% of investments be directed to “climate-impacted communities.” These actions demonstrate how investing in climate resilience can also foster climate equity.
What is Maryland doing right now?
Greenhouse Gas Reduction Act
The 2030 Greenhouse Gas Reduction Act (GGRA) Plan was prepared by the Maryland Department of the Environment in 2021 to analyze pathways for meeting GGRA’s requirements for a 40% decrease in greenhouse gases from 2006 levels by 2030. The plan includes considerations for adaptation and resilience, environmental and climate justice, economic impacts, implications for state sectors and programs, and the costs of federal action and inaction. Under GGRA, there are reporting requirements for progress and a study of the economic impacts by 2022 which the Maryland General Assembly will review by 2023 to reassess procedural changes needed to meet the reduction target. State actions to reduce emissions present opportunities for investing in climate equity, and the impacts of these actions should be tracked to ensure benefits are locally retained.
Environmental Benefit Districts (EBDs)
EBDs were piloted in 2003 by the Maryland Department of Environment to designate areas in need of targeted resources, incentives, and projects for sustainable development, and this has led to successes in infrastructure improvement, pollution mitigation, and climate resilience in many communities and neighborhoods throughout Maryland.
The Center for Community Engagement, Environmental Justice, and Health (CEEJH) at the University of Maryland, School of Public Health partnered with the Maryland Department of Natural Resources to develop MD EJSCREEN, an environmental justice screening and mapping tool that spatializes environmental and population data to reflect environmental justice concern. MD EJSCREEN can be utilized to determine the cutoff for community designation as an EBD. This was defined as an EJ Score at or above the 75th percentile with mean EJ scores 0.7 or higher, corresponding to an elevated level of environmental risk. This prompts the need for prioritizing communities based on mapping determination. Percentiles should also be further stratified to identify “high needs'' communities.
Cap and Trade: A Hidden Disequity
Cap and trade is a market-based system that issues a predetermined number of permits (cap) corresponding to emissions allowances that industries can choose to buy or sell to each other (trade) (Figure 3). Although this cap can decline over time to meet policy goals, cap and trade systems have a “hidden disequity.” Carbon markets promote carbon “hotspots,” also known as sacrifice zones, that disproportionately affect low wealth communities and communities of color by concentrating pollution in one geographic area. Although regional goals may appear to be met, market-based systems can have harmful localized effects. Carbon markets may lead to overproduction of pollutants up to maximum levels, and businesses have the option of simply purchasing additional credits. Industrial companies can conveniently circumnavigate the system to locate their facilities adjacent to communities of color, while remaining under state limits. They abide by the “path of least resistance,” knowing that these communities tend to lack capacity to mobilize against them, compared to more affluent communities with more resources and overall social cohesion. Based on the Center for American Progress’s Justice40 Recommendations, mandatory emissions reductions should be imposed that specifically protect disadvantaged communities from such hotspots for a more equitable and just transition to clean energy.
Figure 3: Cap and trade allows facilities to buy or sell permits to emit pollution. (Dicochea, 2013).
Regional Greenhouse Gas Initiative (RGGI)
RGGI is a cooperative market-based “cap and invest” program to reduce CO2 emissions from the power sector among Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia. Each year from 2015-2020, the cap declined by 2.5% and will decline by 30% overall from 2020-2030. The 2030 Greenhouse Gas Reduction Act proposes a RGGI cap of zero by 2040. Both annual and lifetime benefits of this program were reported in 2018, and Maryland’s emission reduction due to RGGI is projected at 3.60 MMtCO2e in 2020. This translates to an avoided cost of approximately $176 million, based on the EPA’s calculation of the social cost of carbon.
Overall, RGGI states have seen a 16% deeper reduction in greenhouse gas emissions, compared to their non-RGGI counterparts. Maryland has $788,562,050.58 in total auction proceeds. In FY20, RGGI funds comprised more than 94% of the Strategic Energy Investment Fund (SEIF), of which about 40% is directed toward programs for low-moderate income populations. Although these allocations have the potential to mirror Justice40 allocations, there is a need for better tracking and analysis of return on investment for social, health, environmental, and economic benefits. There is also a need to expand considerations for allocations beyond income and adopt a definition for “disadvantaged communities. Maryland can utilize the Maryland EJSCREEN tool and Climate and Health Equity Mapper to microtarget specific communities to receive these funds.
Climate and Community Investment Act
The Climate and Community Investment Act (CCIA) was recently introduced to propose a $55 fee per ton of emissions for polluters in New York State in 2022, and this fee would rise to $74 per ton by 2030. In the first year, CCIA could produce over 160,000 jobs and $15 billion in revenues. Significantly, CCIA was developed by hundreds of community organizations and embodies true representation and meaningful involvement in policy making. Unlike market-based systems, community interests were centered throughout this process to prevent harm and promote climate and economic equity.
Compensating for Justice40 shortcomings at the state level
Implementation of a Justice40 initiative at the state level presents an opportunity to tailor investments to the unique local needs of Maryland communities and use microtargeted language for directing inputs to communities. Clear tracking and reporting mechanisms must ensure the benefits and investments being directed toward environmental justice are addressing root causes of inequity to generate long-term community wealth. This requires authentic community engagement to create locally relevant and impactful solutions.
Recommendations
Create grants through the Departments of Commerce and Housing and Community Development to redevelop brownfields in environmental benefit districts (EBDs) into green workforces.
National funding opportunities include Rural Development Grants by the USDA and Planning and Local Technical Assistance Programs by the Economic Development Administration. In Maryland, a 2019 proposed bill (MD SB 663 Commerce, Housing, and Community Development - Opportunity Zones) aiming to provide financial assistance for opportunity zones died in the Budget and Taxation Committee. Although SB 663 did not pass, the fiscal and policy note describes possible funding mechanisms for EBD initiatives such as the Community Legacy Program, the Neighborhood Business Development Program, the Strategic Demolition Fund, and the Qualified Opportunity Zones Program. These programs demonstrate potential for further advancing environmental and economic justice.
2. Codify the use of MD EJSCREEN for microtargeting state and federal funding allocations to EJ communities and businesses.
EJSM applications and microtargeting of communities are being discussed at the federal level. The Environmental Justice Mapping and Data Collection Act of 2021 introduced in the 2021-22 Congressional Session would establish an interagency Environmental Justice Mapping Committee and require the EPA to establish an EJSM data repository to identify EJ communities. In Maryland, MD EJSCREEN could be used to allocate state funding from the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES). Identification of POC-owned businesses and communities could similarly aid in proper allocation of FEMA Disaster Plan and Small Business Administration (SBA) loans to spur economic recovery and encourage resistance during the COVID-19 pandemic that has disproportionately harmed communities of color.
3. Use MD EJSCREEN to prioritize high needs communities with EJ Index scores in the top 5-10% for EBD designation by the Maryland Department of the Environment.
Current EBD designation refers to all communities with a mean EJ Index of 0.7 (the 75th percentile) or higher. Further stratification of EBD communities can ensure those above the 90th percentile are prioritized to receive the most immediate resources.
4. Incorporate community inputs throughout the policymaking process.
Including risk and exposure assessments, community-based participatory research (CBPR), and the Collaborative Problem Solving (CPS) model to gather mixed-methods data and to better inform environmental priorities.
5. Track state spending for environmental justice.
WHEJAC has provided guidance for examples of projects that do and do not benefit communities in addition to recommendations for the Climate and Economic Justice Screening Tool proposed in EO 14008. Environmental justice screening and mapping tools could be used to verify EJ communities are receiving targeted and ensured benefits.
6. Shift toward community-driven solutions such as the Climate and Community Investment Act instead of advancing cap-and-invest systems.
Emissions fees can prevent the inequities produced by cap-and-trade while funding a just transition from fossil fuels through job creation and local economic development.
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