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How to Make the US Clean Energy Transition Equitable

Claudia Baldwin

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Globally, equitable climate action requires that the United States, as the biggest historical emitter of greenhouse gases, significantly cut domestic emissions while increasing its international finance commitments. Making the transition to net zero emissions within the United States — in a way that addresses historic inequity and delivers a just distribution of costs and benefits — will require addressing decades of systematic discrimination. The federal government can play an essential role by effectively implementing equity focused climate policy and driving climate investment to increase equity. Climate spending alone will not deliver on needed systemic change. However, intentionally directing the expected economic, public health and quality of life benefits of clean energy toward those who disproportionately carry the costs of a dirty energy system can begin to address inequity.

More than one of every four U.S. households faces a high energy burden, spending at least 6 percent of household income on energy, compared to a national average of 3.1 percent. A disproportionate number of Hispanic, Black and Native American households face a high energy burden compared to their share of households nationally, with median household energy burdens of 3.5 percent, 4.2 percent and 4.2 percent respectively, compared to 2.9 percent for white households, according to the American Council for an Energy-Efficient Economy.

While clean energy is increasingly available, access to it is not equal. Solar technology, for example, has mostly benefited higher-income households, which were four times more likely to adopt it than low-income families. That despite that 42 percent of residential rooftop solar potential is in low- to moderate-income communities. This is due to a range of barriers to using solar technology, including high upfront costs and hard-to-access financial incentives, a lack of homeownership which can make it more challenging to benefit from solar power, and a lack of rooftop access.

New clean energy spending and clean energy jobs are critical, but there is no guarantee of an equitable distribution of the economic opportunity that goes along with it. While racial and gender diversity differs by sector, there is an apparent lack of gender diversity across all energy sectors. For example, a 2019 survey found that only 26 percent of the solar industry workforce identified as women in comparison to 47 percent in the broader national workforce. The solar industry also has a higher than average wage gap and reflects the dismal representation of women and people of color in leadership positions nationwide. This represents a broader challenge of not only employing a diverse workforce, but also cultivating diversity at the level of business ownership and leadership, such as through minority and women-owned business enterprises.

Congress and the federal government are ready to invest

President Joe Biden started his term by committing to address these inequities through support for equitable climate action and environmental justice. The administration’s Justice40 initiative, which pledges to deliver at least 40 percent of benefits from federal climate investments to disadvantaged communities, comes at an inflection point in the country and federal government’s reckoning with systematic discrimination, its relationship with climate and environment, and its generational effects.

The federal government can already help disadvantaged communities by targeting investments with long-lasting benefits through direct payments such as the Weatherization Assistance Program, project-based grants, loans, loan guarantees including the Electric Infrastructure Loan and Loan Guarantee Program, and technical assistance and training such as through the Equity in Energy initiative.

Congress is considering massive investments in the clean energy transition through these and new programs. Congress recently passed the Infrastructure Investment and Jobs Act, which includes important clean energy transition spending that can improve equity. One example is publicly accessible EV charging, with priority given to rural, low- and moderate-income neighborhoods and areas with higher numbers of multiunit dwellings over single family homes and private parking spots. If executed intentionally and successfully, public EV charging can increase the accessibly of EVs and their benefits for these communities. Public EV charging is also important for electrifying vehicles used for ride-hailing, which are often used more intensively than other cars and by lower-income drivers.

But more needs to be done in terms of scale of investment in both the clean energy transition and energy equity. Congress is considering the Build Back Better bill. This legislation would invest hundreds of billions in climate programs that can deliver for marginalized and disadvantaged communities, such as a $29 billion fund to finance zero-emission technologies, including any energy property and vehicles, for low-income and disadvantaged communities, and $3 billion for climate justice block grants. These are important investments in reaching underserved communities in the energy system, a foundational prerequisite to an equitable clean energy transition.

Targeted spending alone is not enough

Effective, equitable clean energy spending needs to be paired with intentional, enabling policy and process investments. Disadvantaged communities experience multiple and overlapping social and economic inequities that can limit the effectiveness of this funding, including a lack of access to capital, barriers to business ownership and exclusion from decision-making. To remedy this, federal policymakers and other authorities should consider:

Data quality and availability: Clean energy spending can be targeted equitably through the implementation of effective, data-driven, results-focused programming on energy equity driven by cultivating metrics, reporting requirements, qualitative and quantitative data sources, and analysis that is grounded in the experience and input of target households and communities.
Local capacity building: The federal government should provide funding and technical assistance to build the capacity of states, local governments, community groups and other representatives of disadvantaged communities to lead on co-creating opportunities, applying for federal funds and engaging with or implementing programming.

The clean energy transition is both constrained by and dependent on addressing systemic racism and wealth inequity in the US.

Community engagement: Federal actors should bring the interests of communities that have historically been excluded to the forefront of federal spending, while equipping and empowering these actors to lead in program design, implementation and monitoring. Incorporate advance planning, community-led project design and funding for robust, inclusive, respectful, culturally sensitive and intentional community partnership.
Labor and procurement policies: Federal actors can ensure clean energy spending creates pathways to high-quality jobs for a diverse workforce by requiring jobs created through federal spending to meet wage standards, protecting the right to organize, enforcing anti-harassment and anti-discrimination protections, encouraging local hiring and engaging minority-owned and women-owned businesses, and training and equipping currently underrepresented members of the clean energy workforce to capitalize on new opportunities in the sector.
Inclusive Financing: Federal policies can support inclusive financing approaches to deploy clean energy and energy efficiency in low-income communities; Black, Latino and Indigenous communities, as well as other communities of color.

There is more to learn

The most impactful policies are grounded in input from communities and stakeholders and the best available analysis. As the federal government turns more aggressively to tackle climate and energy equity issues, it is critical to understand the economic impacts of proposed pathways to achieve U.S. clean energy goals, particularly in disadvantaged communities. This raises outstanding questions about how some enabling programming discussed above may affect clean energy deployment and job creation. WRI intends to address some of these questions with an upcoming analysis of the economic impact of decarbonization policies that prioritize disadvantaged communities and the creation of quality U.S. jobs.

An opportunity that can’t afford to be missed

Under the 117th Congress and Biden administration, the federal government is looking to invest unprecedented federal funding as part of an historic commitment to a cleaner and more equitable energy system. The clean energy transition is both constrained by and dependent on addressing systemic racism and wealth inequity in the United States. Clean energy investments that deliver benefits to marginalized, underserved or disadvantaged communities are central to building a future that is less vulnerable to climate change and more prosperous for all.

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Environment

Episode 327: Meet Carbontech Startup Air Company

Claudia Baldwin

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This week’s run time is 29:34.

WEEK IN REVIEW (3:45)
FEATURES
Turning carbon into value (18:55)

Gregory Constantine, co-founder and CEO of Air Company, talks growth plans for his startup — a leading carbon use company specializing in consumer goods such as vodka and fragrance made from air.

*Music in this episode: Lee Rosevere: “And So Then,” “4th Ave. Walkup,” “I’m Going for a Coffee” and “Let That Sink In.”

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To make sure you don’t miss the newest episode of GreenBiz 350, subscribe on iTunes or Spotify. Have a question or suggestion for a future segment? E-mail us at [email protected].

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Environment

The Sustainability Scorecard, Reviewed

Claudia Baldwin

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A version of this article originally appeared in our Circularity Weekly newsletter. Subscribe to the newsletter here.

I was invited to read a new book and interview one of the authors. As someone who has long enjoyed reading books about sustainability, it was very flattering to be sent a copy of a new book, “The Sustainability Scorecard,” by Paul Anastas and Urvashi Bhatnagar, and asked to provide my thoughts in a review.

Many of our Circularity Weekly readers are probably familiar with Paul Anastas. A hero of mine since graduate school, Anastas is a deep thinker, a brilliant chemist and an engaging speaker. I was far less familiar with Urvashi Bhatnagar. Fortunately for me, I had the opportunity to chat with Bhatnagar over the phone about her book and immediately became a fan. A healthcare executive and population health expert with a keen eye toward sustainability, Bhatnagar brings a different perspective to “The Sustainability Scorecard” that pairs quite well with Anastas.

“The Sustainability Scorecard” provides a simple and straightforward method for identifying where a company currently is on its sustainability journey and a method to track progress. The book proves that sustainability makes economic as well as ecological sense and guides leaders in creating and scaling their own green supply-chain initiative. I’ve read a lot of sustainability books, and this one provides the most practical steps for corporate improvement. According to Goodreads, “Through repeatable, reliable processes that address operating model design and new key performance indicators to scaling, this book is a practical guide that leaders can rely on to make their existing systems more sustainable and profitable.”

What I learned No. 1: Entrenched systems are not so entrenched

To some degree, this takeaway from the book follows quite well on my piece from a couple Fridays ago. We often get the false sense that the status quo is the status quo is the status quo is the status quo (Wait, did I just type that a bunch of times? Whoops, leaving it in because it helps make the point). “Entrenched systems and globe-spanning companies may appear impossible to dislodge,” Bhatnagar and Anastas write, “but consider that none of the top-10 most valuable companies today were on that list in 1990. Many didn’t even exist in 1990. Big changes can happen within only a few decades.” Because of this, we need to overcome the learned behavior that we can’t make a difference because the behemoths in the economy will never change.

What I learned No. 2: The scorecard framework

Bhatnagar and Anastas have provided a straightforward and scalable model for firms to move directionally towards sustainability. The framework focuses on four areas:

Waste prevention
Maximizing efficiency and performance
Renewable inputs
Safe degradation of materials

While these endpoints are largely rooted in environmental sustainability, they also cross over into social wellbeing for workers, fence-line communities and product users — all very important considerations for any sustainability practice.

When I looked at the scorecard, I was struck by how it is simultaneously simple and in-depth. The four high-level goals manage to get to the heart of how to make more sustainable products and processes without overcomplicating things. The authors have developed a data-driven methodology that can be approached whether you are starting your sustainability work (Initiate phase), are down the path but still learning (Develop phase) or are an industry leader that’s been focused on sustainability for quite some time (Maturity phase). The key to this framework, and I think one of the key insights I pulled from the book, is that directionality is important. In other words, set a direction for your sustainability work that aligns with the best science available and start moving. Sure, the pace we are moving is important, but the direction is far more so.

What I learned No. 3: Perfection is unattainable

When I spoke with Bhatnagar about the book, she mentioned this was one of the sticking points in writing and publishing it. There is always a desire within any framework to define the perfect state, to show users how to grab the brass ring. Bhatnager and Anastas argue that sustainability doesn’t have a perfect state. Even if firms can achieve the best score in all areas of the sustainability scorecard (zeros for all categories in this case), there will always be work to do. The work could be remediating the issues the firm has created in the past or pushing upstream and downstream partners to improve their sustainability. In other words, firms should be reaching for perfection, but it should always be getting farther away as the science evolves and shows us what it means to be sustainable as an individual, a company, a nation and a global community.

Overall

When I look at this book and the Sustainability Scorecard as a whole, I am excited for the structure it can bring to corporate sustainability in all sectors of the economy. Having spent a considerable amount of time in the private sector trying to build sustainability programs, I can confidently say that these broadly applicable frameworks are always welcome as inputs to a sustainability strategy.

I’d encourage folks to pick up this book, give it a read and think about how you can apply the Sustainability Scorecard to your own work. If you set directional goals, track data and measure progress, you can ensure you are moving in the right direction. And remember, if you reach for the brass ring and fall, at least you tried.

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Source: greenbiz.com

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Environment

Episode 326: the Heat Index; a Historic Climate Policy Opp

Claudia Baldwin

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This week’s run time is 44:51.

WEEK IN REVIEW (3:30)
FEATURES
A sweltering European summer (21:05)

James Murray, editor-in-chief of BusinessGreen, chats about record-breaking heat waves in the U.K. and Europe are challenging infrastructure and economies, and reshaping the dialogue about climate risk.

Cognizant CSO reflects on climate change and employee well-being (30:20)

Sophia Mendelsohn, chief sustainability officer and global head of ESG at tech services firm Cognizant, addresses the company’s broad ESG strategy and why employee well-being needs to be considered in the context of climate change.

*Music in this episode: Lee Rosevere: “Keeping Stuff Together,” “Not My Problem,” “Snakes,” “Southside.”

STAY CONNECTED

To make sure you don’t miss the newest episode of GreenBiz 350, subscribe on iTunes or Spotify. Have a question or suggestion for a future segment? E-mail us at [email protected].

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