Will The EPA’s Environmental Justice Agenda Backfire?

by James Broughel on July 30, 2013

in Environment, Government-Granted Privilege, Regulation

In May, the Environmental Protection Agency (EPA) proposed new guidelines for incorporating “environmental justice” into its rulemaking procedures. Environmental justice is the idea that all people, regardless of income or race, should be treated equally with respect to environmental laws, regulations and policies. Sounds pretty good, right? Unfortunately, it’s not quite as simple as waving a magic wand and making low income and minority communities cleaner and safer. Instead, EPA’s new guidelines may have unintended effects that harm the very people they are supposed to protect. Perversely, the poor may end up paying for a cleaner environment they won’t get to enjoy, while wealthier people enjoy it instead.

In the new guidelines, the EPA talks at length about how lower income and heavily minority areas are often correlated with environmental problems and a whole host of health risks. It may be that the poor are less politically organized than wealthier people and interest groups. Perhaps for this reason there are companies that purposefully pollute in poor and minority neighborhoods because the companies know they can get away with it. That seems plausible.

But there may be other reasons that poor people tend to live in more polluted areas. For example, the poor may move to polluted areas because those areas are less expensive to live in. I myself am a case in point.

When I was in my younger twenties, I tried to make a go at being a musician in New York City. I spent most of my time practicing with my band, so I generally worked odd jobs at off hours, living month to month and paycheck to paycheck. That way I could focus most of my time on music. When I first moved to New York, I lived in the Lower East Side of Manhattan. Then I moved to Harlem because it was cheaper. Finally, to save even more money, I moved to Greenpoint, a neighborhood in northern Brooklyn.

Most people don’t know this, but Greenpoint sits over one of the largest oil spills in North American history. In fact, there was a sign down the road from my house that signaled the end of my street was a “dumping station” where there was a physical pipe coming out of the ground dumping waste into a river, Newtown Creek. You could literally smell the oil in the air.

So why would I live like this? I paid $480 a month for a gigantic room with huge bay windows in a 3-bedroom apartment that was $1,300 a month in total, dirt cheap by NYC standards. My two roommates, also musicians, paid even less in rent than I did. We knew it wasn’t the best neighborhood; we weren’t stupid. We just thought the tradeoff was worth it.

So what does the EPA think will happen if it cleans up a neighborhood like Greenpoint? Would starving artists like myself and my old roommates benefit as we are finally freed from the exploitation of evil oil companies? Maybe, maybe not. The reasoning should be obvious to anyone who has ever lived in New York City.

Greenpoint is prime real estate situated extremely close to Manhattan. When the neighborhood gets cleaned up, real estate prices will rise as wealthier people, who previously wouldn’t tolerate the pollution, move in. Rents will go up as well. Those who own land will be better off, and some of them may currently be poor. But most low income people rent and don’t own property. Those people will have to move out as the area gets more expensive, or if they stay they will face a higher cost of living. Perhaps if they move, they will choose another polluted area to live in. Almost certainly, they will have a much longer commute if they work in Manhattan like I did.

The point of this story isn’t to say we should never clean up polluted areas. We should. But the EPA shouldn’t claim it is helping low income and minority populations when it is far from clear that they are the primary groups that will benefit from EPA rules. Regulations claiming to help the poor can be highly misleading if analysts don’t make an attempt to forecast (and analyze retroactively) adjustments in human behavior that result from regulatory changes.

There’s even more to the story. While the benefits to low income groups as a result of regulations justified on the basis of “environmental justice” can be highly uncertain, the costs are all too real. Costs of regulations are often spread evenly across everyone in society, much like the costs of regressive sales taxes are spread evenly across everyone who purchases a taxed product, and this includes the poor. We could end up in a perverse situation where the poor are actually paying to gentrify their own neighborhoods.

This is far from the only problem with the EPA’s new environmental justice guidelines, but it may be the most perverse. If the EPA really wants to help the poor, the agency should pay closer attention to changes in prices and human behavior that will result from its actions. The EPA should also seek feedback from, and provide detailed information on expected benefits and costs to, impacted communities before moving forward with a regulation. Otherwise, the EPA could be wasting a whole bunch of time with little to show for its efforts.

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