By Tarun Reddy Arasu

New Jersey is the fourth smallest state in terms of land area and is the most densely populated state in the United States. Over the past few decades, compounded by rapid industrialization, energy has become one of the essential commodities in modern times, so much so that it has become a necessity. Notably, New Jersey is ranked among the top 10 states in both the lowest per capita total energy consumption and the lowest amount of energy consumed per dollar of GDP, thus maintaining high energy efficiency (U.S. EIA, State Energy Data System, Table C10, C14). The state has also reduced its energy consumption and cost in the past two years, which, although partly due to the pandemic, is still an achievement. Behind all these achievements and strides in energy efficiency lies a grim reality. The distribution of costs and benefits within the U.S. energy system is disproportionate, thus creating inequities. This is where the issue of energy equity and environmental justice comes in.

Environmental Justice

Power plants tend to be disproportionately located in or near low-income and minority communities, many of which are burdened with numerous additional sources of pollution.[1][2][3] While the health impacts of power plant emissions extend over broad regions, up to hundreds of miles from the stack, studies show that living near power plants is associated with adverse health outcomes like increased hospital visits and low infant birthweights.[4][5]

ReThink Energy NJ is a report published by the Institute for Energy and Environmental Research and PSE Healthy Energy, which analyzed the locational distribution of New Jersey’s existing large power plants with respect to the demographics of nearby communities. It was found that all but one of these plants are in regions with lower incomes than the median (measured by the percent of households living below double the federal poverty line), and most are located in regions with a larger share of minority inhabitants than the median. If we sum all the populations living near (within 3 miles) these power plants, we find that 59% are minorities, compared to a state average of 41%, and 35% are low-income, compared to a state average of 21%.[6] The communities living near power plants tend to be more linguistically isolated than others and have lower educational attainment. Both are factors that hamper community engagement.[7] The graphs below represent the same:

Energy equity figure 1

Bubble size represents population size living within three miles of each plant, and axes indicate the state percentile for low-income and minority inhabitants, as compared to the rest of New Jersey. Source: Lukanov, B., & Ramana, M. (n.d.). About the Institute for Energy and Environmental Research. 117.

 

Energy Equity figure 2

Source: Lukanov, B., & Ramana, M. (n.d.). About the Institute for Energy and Environmental Research. 117.

Reducing dependence on fossil fuels for energy generation through clean energy will address this issue of environmental injustice. The Clean Energy Master Plan of 2019 aims to address these inequities by increasing investment in the clean energy sector. The historic Environmental Justice Legislation is also a step in the right direction by analyzing if a new facility is having a disproportionately negative impact on over-burdened communities.

Although clean energy seems to address this environmental injustice problem, there are inherent issues with clean energy policies. Although all taxpayers bear the burden of the policy, its benefits are only distributed among certain sections of society. Some households, particularly low-income, Black, Latino, Indigenous, and other households of color, spend a disproportionate share of their income on home energy costs. These households do not have adequate access to clean energy technologies and energy-efficient appliances, which further increases their energy burden.

Energy Burden

As we can see in the graph below, the average energy burden (% of income) across New Jersey is 2-3% which is lower than the national average. Still, counties in the western and southern parts of the state, like Atlantic County, Cape May County, Cumberland County, and Salem County, have a higher energy burden. These regions have significant minority and low-income populations, which is a cause for concern.

Energy Equity figure 3

Energy Equity figure 4

The above maps show that most of the census tracts with a high energy burden (4% and above) are communities where the median household income is less than the state median household income ($90,420). That is, approximately 68% of the census tracts with low median household incomes have a high energy burden. On the other hand, approximately 40% of the census tracts with larger shares of Black populations (above 600 residents per census tract) have a high energy burden (4% and above).

The scatter plots below explain the same relationship:

Energy Equity figure 5

When we look at the average energy burden as a percentage of state median income, we can clearly see that the most vulnerable communities are the low-income communities, with a disproportionate energy burden of approximately 13%, which is significantly more than the middle- or high-income households.

Energy Equity figure 6

These issues may be at least partially attributable to the historical lack of access to capital for low-income and predominantly minority populations, which deserves attention.

Energy Equity figure 7

As shown in the map above, the median low-income energy burden is one of the highest in the Mid-Atlantic region at approximately 9.4%

Clean Energy Justice

Governments across the world have adopted clean energy as their main priority, primarily due to the adverse effects of climate change. Although the transition to clean energy is an important step in the right direction, policymakers and researchers across the world are concerned that this transition to clean energy might not be equitable for the most vulnerable sections of the population. Energy justice prioritizes the communities that suffered the worst due to climate change, which are the low-income and minority communities. It has been proven in the U.S. that the benefits of clean energy policies have been disproportionately inaccessible to certain subsets of society due to lack of access to capital and information among vulnerable populations.

On one hand, it is true that early adopters are usually populations belonging to affluent communities who tend to invest a huge amount initially to scale up clean energy technologies but late adopters who did not participate initially tend to benefit from this investment due to the low costs at a later stage. On the other hand, clean energy subsidies given by the government are majorly utilized by these early adopters because of access to capital, thus creating a scenario in which access to capital is a basic requirement for households to be eligible for these subsidies. Awareness about the advantages of clean energy and the various targeted investments governments are making to propel the growth of the industry is also disproportionately distributed in society due to a lack of access to information.

To understand this relationship, we have conducted a bivariate analysis of Photovoltaic (PV) installations (more commonly referred to as “solar panels”) and income and race variables. The following charts reflect those results:

Energy Equity figure 8

Energy Equity figure 9

As we can see, the approximately proportional relationship between median income and the number of PVs installed can be established. The same cannot be said about the relationship between the proportion of the Black population and PVs installed because a correlation cannot be clearly observed.

Job Creation

Job creation is an important economic aspect of the clean energy transition. New Jersey ranks 18th nationally in renewable energy jobs, accounting for approximately 15,000 workers. According to US Census American Community Survey Data, white males account for approximately 65% of the renewable energy workforce; Black people and women hold only 2% of these jobs. This indicates the disproportionate access to this career field. There is an urgent need for investment in workforce readiness programs that empower individuals in marginalized communities to find and keep jobs.

Conclusion

Historically, policymakers and researchers have focused their attention on clean energy efficacy followed by efficiency. Still, in recent times, ever since the pace of clean energy transition has increased, it is essential for us to focus on the equity aspect of energy transition such that all sections of society benefit from this transition. It is often wrongly assumed that there is always a trade-off between efficiency and equity, which is not true. Rapid reduction in energy prices has the potential to impact both equity and efficiency positively. Energy efficiency will have a direct impact on energy prices which would make energy much more accessible to low-income households.

It is vital for politicians and policymakers to incorporate this aspect of energy transition in the design, implementation, and assessment of energy policies. The transition to clean energy utilizes several public resources and is usually a slow process to which society as a whole has to contribute. Thus, it is essential for us to assess the distribution of costs and benefits of various energy policies that have been implemented in recent times. Energy inequity is a much larger issue in developing nations worldwide, but that does not mean the situation is better in the United States or New Jersey.

As mentioned in the earlier sections, New Jersey lacks in three critical aspects of energy justice: environmental injustice, excessive energy burden on vulnerable populations, and justice in clean energy policies. This is largely because of the inequitable sociopolitical context within which the system operates, which includes structural and systematic marginalization and ongoing and historical discrimination against these vulnerable communities that face the most significant hardship.

Many states, and most recently, the federal government, have made commitments to address these issues by efficiently targeting their assistance and spending programs. Governments have several delivery methods for targeted investments and a number of existing programs that can be targeted and scaled through new or revised eligibility criteria. Increasing targeted investment would benefit from complementary federal policies that help to ensure the intended outcome. The Clean Energy Equity policy proposed by the Government of New Jersey is the right step in that direction.

Tarun Reddy Arasu is a graduate student pursuing a Master of Public Policy degree at the Edward J. Bloustein School at Rutgers University.

References

[1] M. Krieger, J. A. Casey, and S. B. Shonkoff, “A framework for siting and dispatch of emerging energy resources to realize environmental and health benefits: Case study on peaker power plant displacement,” Energy Policy, vol. 96, pp. 302–313, 2016. https://www.sciencedirect.com/science/article/abs/pii/S0301421516302798

[2] S. Environmental Protection Agency, EJ screening report for the Clean Power Plan, 2015. [Online]. Available: https://archive.epa.gov/epa/sites/production/files/2016-04/documents/ejscreencpp.pdf

[3] K. Boyce and M. Pastor, “Clearing the air: incorporating air quality and environmental justice into climate policy,” Climatic Change, vol. 120, no. 4, pp. 801–814, 2013. https://www.researchgate.net/publication/271738449_Clearing_the_Air_Incorporating_Air_Quality_and_Environmental_Justice_into_Climate_Policy

[4] Liu, L. Lessner, and D. O. Carpenter, “Association between residential proximity to fuel-fired power plants and hospitalization rate for respiratory diseases,” Environmental Health Perspectives, vol. 120, no. 6, p. 807, 2012. https://www.researchgate.net/publication/221866295_Association_between_Residential_Proximity_to_FuelFired_Power_Plants_and_Hospitalization_Rate_for_Respiratory_Diseases

[5] Ha, H. Hu, J. Roth, H. Kan, and X. Xu, “Associations between residential proximity to power plants and adverse birth outcomes,” American Journal of Epidemiology, vol. 182, no. 3, pp. 215–224, 2015. https://www.researchgate.net/publication/279630720_Associations_Between_Residential_Proximity_to_Power_Plants_and_Adverse_Birth_Outcomes

[6] Lukanov, B., & Ramana, M. (n.d.). About the Institute for Energy and Environmental Research. 117. https://www.psehealthyenergy.org/wp-content/uploads/2017/10/NJ.Clean_.Energy.pdf

[7]  Sesmero, J. P. (n.d.). ESSAYS ON EQUITY-EFFICIENCY TRADE OFFS IN ENERGY AND CLIMATE POLICIES.

8.    Montt, G., Wiebe, K. S., Harsdorff, M., Simas, M., Bonnet, A., & Wood, R. (2018). Does climate action destroy jobs? An assessment of the employment implications of the 2‐degree goal. International Labour Review, 157(4), 519–556. https://doi.org/10.1111/ilr.12118