Equity Considerations environmental policy
-
-
Policies that decrease pollution considered a public good
Public good is consumed collectively
o Consumption assumed shared by group at given time and place
Size of a pollution abatement program determined by efficiency
o program should decrease pollution to the point where Marginal Damage
equals Marginal Abatement Cost
o net benefits to society maximized at this point
Distribution of costs/benefits doesn’t determine efficiency
There may be situations where people benefiting from environmental policy may
not overlap with those bearing costs
Should equity considerations influence the size or existence of program?
Distribution of Net Benefits
Program
A
B
C
D
-
-
-
Total Costs Total Benefits
50
50
50
50
100
100
140
140
Net Benefits
Group X
Group Y
50
50
90
90
25
30
20
40
25
20
70
50
Programs A and B have same net benefits (and total cost/benefit)
A’s benefits are evenly distributed between two groups; for B, group X benefits
more than Y
From strict efficiency standpoint programs are equal
Equity standpoint?
o Suppose group Y is wealthier
o Suppose group Y is poorer
Programs C, D preferred to A or B from efficiency standpoint
Compare program B to C
o If Y is wealthier, is program C better than B?
o What if Y was poorer?
Compare B to D
o Assuming Y is wealthier, what are the equity considerations comparing
two programs?
Demography and pollution sources LA County
EPA keeps database stationary sources of toxic chemicals in the US
Toxic release inventory (TRI) program
Every polluting facility must report yearly emissions to EPA
Purpose of program to alert residents to possible neighborhood pollutants
Chemicals covered include carcinogens and other pollutants
In 2009 the biggest emitters of toxic chemicals in LA area (on site):
Facility Name
BP WEST COAST PRODUCTS LLC
DOW CHEMICAL CO CRENSHAW FACILITY
CHEVRON PRODUCTS CO DIV OF CHEVRON USA INC
CONOCOPHILLIPS LA REFINERY WILMINGTON
PLANT
EXXONMOBIL OIL CORP TORRANCE REFINERY
City
CARSON
TORRANCE
EL SEGUNDO
WILMINGTON
TORRANCE
Exposure to industrial pollutants varies by social class
Maps of LA County 1990 neighborhoods by race, income and pollution sources
Reasons for relationship?
Change in polluted/non-polluted neighborhoods over 1990-2000
Population Change 1990-2000
Latinos
non_hispanic Whites
African Americans
Asian-Americans
Within neighborhood that had
polluting facilities in 1990
Within neighborhood with no
polluting facilities in 1990
30.96%
-17.41%
4.47%
33.57%
35.11%
-12.85%
1.25%
38.75%
Proportion living within neighborhood with polluting facility
Latinos
non_hispanic Whites
African Americans
Asian-Americans
1990
21.31%
12.53%
14.93%
14.32%
2000
20.79%
11.95%
15.33%
13.86%
Median household income 1990
Neighborhoods with
polluting facilities in 1990
Neighborhoods with no
polluting facilities in 1990
$34,230
$38,645
Dynamics over 1990 - 2000 period:
Housing prices affected by pollution
Pollution may have driven some people out
Housing prices fall
Induce others to replace movers
Income in polluted neighborhoods relative to remaining LA county probably fell