More than two years after calling for a huge infusion of federal cash for environmental justice, President Joe Biden’s pledge is facing a critical test at the Department of Energy.
With 146 programs covered by Biden’s Justice40 Initiative — more than any other federal department by far — DOE will be making decisions and doling out funds in coming months that will determine how new renewable and fossil fuel projects affect historically disadvantaged communities for decades.
“We at the Department of Energy historically have done a terrible job, honestly. Only 1 percent of funding has gone to small, minority and disadvantaged businesses,” Energy Secretary Jennifer Granholm said at Greentown Labs, a Houston incubator for startups, in early March.
“We have had these structural inequalities, inequities in the past, and we’re trying to remedy that through embedding sort of structural equity into these programs,” Granholm said.
Yet it remains unclear how DOE will deliver on the core objective of Justice40: funneling 40 percent of the benefits accrued in covered programs to disadvantaged communities. DOE is awaiting more guidance from the White House on enforcement. Meanwhile, some experts say DOE’s equity focus will come with a steep learning curve for a department that historically has been filled with scientists and policy researchers focused on emerging technologies.
In 2021, Biden put his weight behind a growing environmental justice movement, which focuses on redressing legacy policies that have forced low-income and minority communities to bear the brunt of environmental pollution like smog and contaminated water.
Biden’s executive order on climate, which was issued on his first day in office, directed the federal government to “advance environmental justice” where agencies “failed to meet that commitment in the past.” A week later, Biden set up the first-ever White House Environmental Justice Interagency Council to coordinate the plan.
That second executive order also established the Justice40 Initiative, which agencies are now starting to implement in earnest, with DOE at the center of much of the targeted funding for climate and clean energy projects.
The 146 covered programs at DOE include a $6 billion nuclear power plant bailout, an $8 billion regional hydrogen hub proposal and grants to plug orphan fossil fuel wells, according to a White House document. The Inflation Reduction Act and bipartisan infrastructure law also are set to dramatically expand the federal pot of money subject to the initiative.
But the federal government hasn’t yet nailed down some of the details that could drive the flow of money, such as what constitutes a “benefit.”
“When I first heard about this, that was the question in my head: Did they mean 40 percent of investment? And then I double-checked. It’s 40 percent of total benefits that are supposed to go to these communities,” said Devashree Saha, a senior associate at the environmental group World Resources Institute.
“Then that raises the million-dollar question, right, that everyone is grappling with: How do you actually measure that 40 percent of benefits from these investments are actually accruing to these disadvantaged communities?” Saha said.
The outcome is likely to have a major influence not only on the grant process, but which renewable, fossil fuel and transmission projects DOE puts its money behind.
So far, the White House Environmental Justice Interagency Council, led by the Council on Environmental Quality (CEQ), has focused on determining what a “disadvantaged community” is.
In October, CEQ rolled out an update to its Climate and Economic Justice Screening Tool, or CEJST. The tool determines how and whether each census tract in the United States is “burdened” according to eight categories: climate change, energy, health, housing, legacy pollution, transportation, water and wastewater, and workforce development. For instance, an agriculture community that loses substantial crop value due to natural disasters caused by climate change is considered burdened. Similarly, a community with dangerous rates of asthma is considered burdened.
CEJST determines whether each tract is disadvantaged by determining if the tract ranks at or above the 90th percentile on specific indicators like agricultural loss and asthma rates. A tract also can receive that designation if it is at or above the 65th percentile for “low income,” meaning its “household income is at or below 200% of the Federal poverty level.” All tribal communities are considered disadvantaged.
In an analysis of the CEJST update, which added indicators to the tool, Saha and two colleagues found that the update expanded the number of U.S. communities considered disadvantaged. The update, known as CEJST 1.0, identified roughly 109 million individuals living in such communities, whereas the original version identified 93.5 million individuals, according to the World Resources Institute analysis.
Still, Saha said that CEQ needs to improve the tool to depict “cumulative burden,” the idea that some communities are hit harder by multiple, simultaneous environmental justice challenges.
“They really need to figure out a strategy to incorporate cumulative burden because without that this tool is just going to be half as effective,” said Saha.
As an example, she said that in disadvantaged communities that meet the threshold for 10 indicators, “we find that more than 75 percent of residents are people of color. “
“In contrast, disadvantaged communities that meet the threshold for three indicators have significantly fewer residents who are people of color. This just goes to show that disadvantaged communities that experience higher cumulative burden are more non-white than those exposed to fewer burdens,” she said.
Saha and her colleagues determined that the most cumulatively burdened communities in the U.S. now are in 14 major cities and urban areas with high minority populations, like Baltimore; New Orleans; and Fayetteville, N.C.
A recent White House document on Justice40 called on agencies to calculate benefits of programs based on improvements in the burden metrics. It also provides agencies “discretion” to give “greater priority to communities that face numerous burdens as compared to those that only face one or two.”
Another key Biden administration document that has yet to be released is expected to provide more details on the initiative. In the early wave of executive orders in 2021, Biden directed the Office of Management and Budget and CEQ to publicly unveil its Environmental Justice Scorecard, the key accountability mechanism in Justice40, by February 2022.
Thirteen months later, environmental advocates say it’s imminent, but the timing remains unclear.
“Agencies have received guidance to track and measure these benefits, and we are and will be continually working to assist agencies with this so we can work together to meet the president’s Justice40 goals,” said Alyssa Roberts, a spokesperson for CEQ. Roberts declined to comment on the timing for the scorecard.
Meanwhile, the National Academies of Sciences, Engineering and Medicine, an independent group that was established by law and largely operates on government contracts, is investigating ways to refine and improve the CEJST tool.
Staffing, grants and an EPA model
For years, California has led the environmental justice charge with its CalENVIROScreen tool. On top of the White House tool, many federal agencies also have their own tools and dashboards.
Like other departments, DOE is transitioning to CEJST 1.0 after relying on its own tool developed earlier in the Biden administration. DOE’s beta tool targeted eight categories of benefits, such as increases in clean energy deployment and jobs in disadvantaged communities and decreases in environmental pollution. A more developed White House definition of “benefits” could quantify progress on similar metrics.
The tool makes it more likely that DOE grant and loan applicant projects that score well on the tool, such as new renewable projects that displace polluting fossil generation or the installation of carbon capture technology on existing infrastructure, will get DOE backing.
Granholm has vowed to apply the formula across tens of billions of dollars in recently enacted funds.
“Justice will serve as our North Star as we fight climate change and bring economic prosperity to our great Nation,” Granholm said in a public letter last year. “I hope you will join us in our efforts to ensure that the benefits of [the bipartisan infrastructure law], DOE climate and clean energy programs, and other Federal efforts build a better future for all Americans.”
But questions remain about whether DOE will have adequate staff to assess programs fully for environmental justice implications, considering the volume of grants.
DOE has brought on a cadre of equity staff to shepherd through Justice40, and last year, the Biden administration launched the DOE Office of Energy Justice Policy and Analysis. The department says it now has 86 part-time and 57 full-time staff that work on energy and environmental justice.
Early in the administration, Tony Reames, a University of Michigan professor, joined DOE and later became its deputy director for energy justice, a new position in the Office of Energy Justice Policy and Analysis. In an interview, Reams said Justice40 is “still early in the implementation.”
“Any of our [Justice40] programs, where appropriate they may carve out 40 percent of the dollars if it’s a program that the benefit is the dollars, otherwise there are other benefits that flow from those investments, so maybe jobs, maybe job training programs,” Reames said. “So what we require from our applicants to DOE funding is that they provide a Justice40 plan.”
Those comments followed ones on a DOE webinar last year, when Reames said Justice40 was a “wealth creation opportunity” and that the department wanted to increase the number of clean energy enterprises.
DOE officials are asking grant applicants to the 146 programs to spell out the environmental justice impact of their proposals. For example, as part of the National Electric Vehicle Infrastructure Formula Program, which aims to fund state efforts to build out EV charging infrastructure, DOE and the Department of Transportation instructed state applicants to “ensure that diverse views are heard and considered and to ensure that the deployment, installation, operation, and use of EV charging infrastructure achieves equitable and fair distribution of benefits and services.”
“Definitely DOE’s mission is going to be really critical,” said Saha. “It’s an important signal for the administration’s commitment to the Justice40 Initiative.”
Saha pointed to EPA’s efforts to swap out old diesel-powered buses for new electric versions as a model. Last year, EPA doled out nearly $1 billion in clean school bus rebates for 400 school districts. Nearly all of the rebates went to “prioritized school districts,” which EPA determined by assessing poverty levels and other factors.
Other environmental justice advocates say Justice40 is yielding results.
“I definitely think it has moved the dial,” said Debra Gore-Mann, the president of the Greenlining Institute, an Oakland, Calif.-based environmental group. “Before Justice40 came out, people were just not understanding equity. People would get equity confused with equality. And [diversity, equity and inclusion] was kind of a corporate mandate.
“We don’t have to spend as much time defining equity. Equity means those that have been impacted first, worst and longest should be considered first [and] should be included,” Gore-Mann said in an interview.
In December, Greenlining partnered with allies, like 350.org and Rewiring America, to pressure DOE to prioritize Justice40 when disbursing $250 million in Inflation Reduction Act funding to boost domestic production of heat pumps, which harness outside air to heat and cool buildings. That entreaty came alongside a request to prolong the comment period for the program, which DOE rejected.
“We would like to see an emphasis on manufacturing technologies that can most directly be installed in multifamily affordable housing and heavily polluting industrial facilities in disadvantaged communities,” the groups said in formal comments to DOE on the grants. “This is important to maximize benefits to disadvantaged communities and be aligned with the aims of Justice40.” DOE has not announced new plans for the disbursement of that $250 million since the department requested information from the public last fall.
The comments also emphasized the role DOE can play in growing businesses run by minorities and women.
Eighty-six percent of Fortune 500 CEOs are white men, according to the Society for Human Resource Management. DOE is aiming to change that, but the way it plans to do so is still being hashed out.
Last month, the department awarded roughly $6.3 million to a group called Black Owners of Solar Services (BOSS). “The cooperative agreement establishes a regional effort to coordinate and train minority-owned businesses on how to apply for DOE funding and access DOE programs, benefits, services and opportunities,” DOE said.
Reames likened the program to a “hub and spoke approach.”
“The BOSS initiative is one way to pilot [and build] the ecosystem of minority and women-owned businesses,” Reames said in the interview. “So BOSS is the hub connecting with disparate entities that are trying to do the same thing.”
‘The competence level is not 100 percent’
For Janice Tran, the CEO of Kanin Energy, a startup that helps heavy industry decarbonize by creating power from waste heat, it has not been possible to access Small Business Administration preferential contracts for female business owners. That’s because the venture capital behind her company means she doesn’t own 51 percent, the necessary threshold to be eligible.
Still, Tran, who attended the Granholm event in Houston and worked under DOE Loan Programs Office Director Jigar Shah at the private firm Generate Capital, said she’s hoping to take advantage of the Inflation Reduction Act tax breaks and DOE infrastructure law grants, particularly those related to investments in “energy communities,” sites where mines and fossil fuel plants used to operate (Energywire, March 21).
“Many of our projects happen to be in those energy communities that were more heavily focused on oil and gas or previous sites of coal,” Tran said in an interview. “That is a way, in my mind, of us contributing to a just transition.”
If those future projects are in disadvantaged communities, which is often the case with areas that have fossil fuel infrastructure, then Tran and Kanin could get DOE preferences in award selection, according to the department’s criteria.
Meanwhile, the House is moving to repeal some of the key programs through which the administration hopes to advance Justice40. On Thursday, House Republicans passed a repeal of an Inflation Reduction Act methane fee and another emissions reduction grant program as part of their signature energy bill.
Earlier in March, the House Energy and Commerce Committee passed legislation along party lines to repeal some Inflation Reduction Act energy efficiency and home electrification programs (E&E Daily, March 24).
Those bills are likely to go nowhere in the Democratic-held Senate. Still, the House Oversight and Accountability Committee is preparing to aggressively probe all clean energy spending (Greenwire, March 22).
Many Republicans also have opposed environmental justice legislation on Capitol Hill, saying it’s wasteful spending that doesn’t uplift impoverished communities. Even with unified government last Congress, Democrats failed to advance a bill that would codify many Biden administration equity initiatives — including some that would affect DOE — while also imposing new fees on fossil fuel companies (E&E Daily, Feb. 16, 2022).
Even so, segments of the fossil fuel industry and its allies are beginning to embrace diversity, equity and inclusion (DEI) initiatives. During the CERAWeek by S&P Global conference in Houston this month, the American Petroleum Institute participated in a DEI panel.
Ahead of a heavily anticipated Interior Department decision on ConocoPhillips’ Willow oil and gas project in Alaska, which the Biden administration later signed off on, Sen. Dan Sullivan (R-Alaska) pitched the project as a boon to DEI.
“The president and his team talk often about racial justice, racial equity, environmental justice. The vast majority of the Native people in Alaska support this project,” he said at CERAWeek. “If they deny this project, their rhetoric on racial equity and environmental justice is very empty.”
Many Alaska Natives are supportive of the Willow project, including Rep. Mary Peltola (D-Alaska), who last year became the first Alaska Native elected to Congress (Greenwire, March 17). Others say it would be bad for environmental justice concerns. Sovereign Iñupiat for a Living Arctic, an environmental justice group led by an Alaskan Native, is among those suing the Biden administration over the approval, arguing it jeopardizes the Arctic region (Energywire, March 15).
Still, environmental justice advocates say the Biden administration is making critical, unprecedented steps on equity.
“The government has never put out this much money. They just haven’t done it,” said the Greenlining Institute’s Gore-Mann. “When it’s the first time ever putting out this much money and investments, the competence level is not 100 percent.”