Despite concerns that date back to the early days of emissions trading, a U.S. EPA program that lets coal-fired power plants buy and sell the right to pollute hasn't hit poor people and minorities with dirtier air than everyone else, according to a new study.
Long before greens rallied around cap and trade as their preferred way to slow global warming, many of them raised doubts about Congress' plan to let companies swap allowances for the emissions that form acid rain. Environmental justice advocates worried that the free market could lead to toxic "hotspots," cutting pollution overall but concentrating the rest of it in vulnerable areas.
Over the first 15 years of U.S. EPA's Acid Rain Program, the opposite has occurred, says Evan Ringquist, a professor at Indiana University's School of Public and Environmental Affairs.
Past research shows that poor people and minorities are more likely to live in places with dirty air. But under the trading program, industrial plants in those neighborhoods bought fewer licenses to pollute, according to Ringquist's new study, which will appear in the upcoming issue of Social Science Quarterly.
Market-based programs have generally been more efficient than command-and-control rules, and the new study adds to the evidence that those savings do not come at the cost of greater inequality, Ringquist said.
"In general, the research shows that most of the early fears haven't come to pass," he told Greenwire.
Emissions that lead to acid rain have fallen across the board since EPA started trading programs for sulfur dioxide (SO2) and nitrogen oxides (NOx) under the Clean Air Act. Data released by the agency last week show that the coal plants in the programs released 5.11 million tons of SO2 and 2.05 million tons of NOx last year -- down 67.5 percent and 69.2 percent, respectively, from 1990 levels.
Both types of pollution are also linked to health problems. When released into the air, SO2 forms fine soot that is linked to breathing problems, heart attacks and death, while NOx is one of the chemicals that typically causes smog problems in urban areas.
Since trading began, some critics have predicted that minority neighborhoods would see fewer health benefits today because nearby companies would buy pollution credits rather than add equipment to control their emissions. In a 1999 article, several legal scholars decried Southern California's trading program for SO2 and NOx as a "failed experiment" for that reason.
"Pollution trading in Los Angeles has led to concentrated toxic air emission hotspots that have shackled low-income and minority communities with the region's air pollution," they wrote in the Duke Environmental Law and Policy Forum.
But the new study says the nationwide trading program may have narrowed the pollution gap between whites and minorities, especially Latinos. It adds to the findings of groups such as the Environmental Law Institute, Environmental Defense Fund and Resources for the Future, all of which looked at the trading program about a decade ago and concluded it was not causing hotspots.
Based on an empirical analysis of all swaps that took place between January 1995 and March 2009, Ringquist found that for every 10 percent increase in the percentage of Hispanic households in a certain ZIP code, there was a 4.1 percent decrease in the chance that a nearby facility would buy more SO2 allowances than it sold. If the proportion of black households within a mile of an industrial plant increased by 10 percent, the facility was 0.8 percent less likely to be an "importer" of pollution credits.
"If there is an equity effect from allowance trading in this model, it works to the advantage of communities of color," the study says.
Still, a trading program does not require the air to be equally clean in all areas. Industrial plants bought more credits than they sold in places where large percentages of people did not finish high school, Ringquist found. Surprisingly, the same was true in areas where homeowners -- rather than renters -- made up a larger share of the population.
Though the acid rain program has been widely touted as a success and embraced by most environmental groups, concerns about toxic -- and discriminatory -- hotspots have lingered as policymakers have debated ways to cut pollution.
The fear of hotspots was often raised by critics as the George W. Bush administration tried to take a market-based approach to mercury emissions from coal-fired power plants. In 2005, before the Clean Air Mercury Rule was thrown out in federal court, EPA's inspector general released a report saying that the agency had not done enough to ensure that the emissions trading plan would not lead to mercury hotspots (E&ENews PM, May 5, 2005).
And while there is no worry about local emissions of carbon dioxide, because it isn't toxic, the idea that trading programs will lead to hotspots has regardless been raised as governments have tried to limit the greenhouse gases that are linked to climate change.
When the state of California's cap-and-trade program for carbon dioxide was stalled in court last week, it was because of a challenge from local activists, who say the trading program will have the side effect of exposing their neighborhoods to other types of toxic pollution.
San Francisco County Superior Court Judge Ernest Goldsmith ruled that the Air Resources Board had not given enough attention to the idea of putting a tax on every ton of carbon released into the air.
Neither option would guarantee cleaner air in Wilmington, Calif., a city with three refineries nearby and a population that is about 87 percent Latino, said Jesse Marquez, executive director of Coalition for a Safe Environment.
"Even if you put in a tax, a tax still allows refiners to continue polluting," Marquez said. "They'll just spend millions to offset their pollution. The only way to offset refiner pollution is to eliminate refiner pollution" (Greenwire, March 24).
If the new analysis of the acid rain programs are any indication, there isn't necessarily a tension between efficiency and fairness, said Michael Livermore, a law professor at New York University and executive director of the school's Institute for Policy Integrity. That is promising for market-based efforts, but it is not a guarantee that future cap-and-trade systems will turn out the same way, he said.
"We don't need to trust in our luck," Livermore said. "We can design our programs to reduce the risk of hotspots."
Click here to read the study.
Like what you see?
We thought you might.
Start a free trial now.