Michael Livermore 0:11
Welcome to the Free Range podcast. I’m your host Mike Livermore. The episode today is sponsored by the program on law, communities, and the environment at the University of Virginia School of Law. With me today is Danae Hernandez-Cortes, an economist and professor in the School of Sustainability at Arizona State University. She studies environmental justice and the distributional consequences of environmental policy. Hi, Danae. Thanks for joining me today.
Danae Hernandez-Cortes 0:37
Hi, thank you so much for having me.
Michael Livermore 0:40
So I’m really looking forward to our conversation today. Maybe just to get us started, obviously, you know, the US faces serious levels of inequality on many fronts. There’s inequality of income, there’s inequality of consumption, there’s also inequality and access to health care, education, personal safety, there’s huge inequalities in how the criminal justice, criminal penal system works, and environmental inequality is definitely part of that picture. I think it’s fair to say that the field of economics generally has sharpened its focus on questions related to inequality in recent years, you know, in various domains. Do you think that’s true in the field of environmental economics as well? Has there been more attention to issues around inequality, distribution injustice, recently then, then maybe in the past?
Danae Hernandez-Cortes 1:34
Yes, definitely. So we have a lot of–as you said, there are many forms of inequality. But environmental inequality is very particular. Because, you know, it’s very well documented. And this is not something new. But it has been documented that citing exists in many ways, but particularly in where the pollution is located with respect to disadvantaged populations, or vulnerable populations. So this has existed in the past, and many researchers, including researchers of color, have shown that this is the case. But I think that there has been a recent increase in interest in–from part of environmental economists and economists in general, in understanding some of these causes, and some of the policy incidents of different various economic, economic and environmental policies that could affect pollution, and could therefore affect who is exposed by this pollution.
Michael Livermore 2:38
You know, so there’s a really interesting review paper that you’re one of the co authors on that reviews some kind of recent advances in the field. And I would, yeah, I would recommend folks who are interested in that to take a look, but one of the research questions that, you know, maybe we could talk some generally about some of the advances in the field, but one that I found kind of interesting, and that I wasn’t personally familiar with, compares environmental inequality or inequality in the environmental domain, with inequality generally. And that’s, that strikes me as a pretty interesting research topic. So, some of the papers looked at things like you know, comparing Gini coefficients, which is, of course, a measure of inequality, in income, typically, and looking at Gini coefficients with respect to like environmental exposures and comparing that to Gini coefficients, with income more generally. So just kind of general inequality in society. So that’s pretty interesting. And it seems like at least some of the times, environmental inequality is kind of worse, that environmental harms are distributed more unequally than even income, which is already very unequally distributed in our society. And I guess the one thought is just, you know, what do you think about this research? And, and, you know, kind of normatively, I was trying to think, like, what do we want here, actually? Like, you know, we have a certain amount of inequality in society, do we want environmental quality to be distributed, like, at the same rate as income inequality? Or do we want it distributed more equally or less equally? What’s the right normative framework for thinking about how to interpret these results?
Danae Hernandez-Cortes 4:27
This is a great question. And I think it’s very hard to have an answer that is very precise, because it’s a normative statement, right? So these normative statements are difficult to compare without having an analysis of different policies and different policy alternatives. But in general, income inequality has followed different distributions and what we see in environmental inequality is that low income–but predominantly minority communities are the ones that are exposed to more pollution. And, and this leads to sharp disparities in to–in this distribution. So if you look at gradients of income versus different levels of this community, somehow on how predominantly minority communities leave there, you will see that minority indicators are even more prevalent than income indicators. And that is very, that is a very important finding of a lot of this literature that yes, it’s true that income, that low income communities are exposed to more pollution on average. But when you look closely, and you look at minority communities, that is even a bigger indicator of that. So that is the first finding that the literature has generally found. And then the next question on how we compare the distributions of income and distributions of environmental inequality, well, I think that one–environmental inequality is related to different sources of inequality. They could be correlated, but there are different sources. So we have citing policies that affect where, where polluting facilities are located, and that affects the distribution of pollution in the environment. We also have different–we also have different access to policymaking that also affects what policies are implemented, and who they target and which environmental policies are being implemented. So we have different policies that are affecting the distribution of environmental inequality that are different from those that are affecting the distribution of income inequality. And so it’s really hard to compare both. But in general, what we see is that even cross-dimensions of income versus race, just see that minority communities are the most affected by pollution in general.
Michael Livermore 7:15
Right, so there’s kind of two things going on. Right? So there’s–or there’s many different things going on? Yeah. Fair to say. So there’s, you’re right, there’s a correlation between income and, you know, environmental exposure, or exposure to environmental harms. And in a way, it’s, I think, it’s kind of natural to think that the causal story runs from say, you know, income, to environmental quality, right? Because the idea being, look, wealthier people can afford to move to areas that have cleaner air, that are less likely to have, you know, negative land uses nearby, and that kind of thing. So that’s one possibility. Another possibility is that environmental quality has a causal effect on income. Right? So there’s some research along these lines, I understand that, you know, if you’re exposed to lead pollution, when you’re young, you know, that can have, you know, serious long term effects on all kinds of downstream consequences, including things potentially, like, you know, educational attainment, that’s gonna affect income. There could be another variable that–and that’s kind of what you’re saying is that there’s something else, maybe that’s policy that affects both the distribution of environmental quality, or affects both income and, and environmental quality in some way that leads to a correlation. So that’s pretty interesting. I mean, has there been–what is the state of research to try to untangle those different possible causal stuff? And then, you know, obviously race too, I want to get to that as well. But just to think about the income relationship first, maybe?
Danae Hernandez-Cortes 8:55
Yeah, this is, this is a great question. And it’s often called the chicken versus the egg problem in environmental inequality. And there are a couple of people who have done research in the past related to that. And this idea that low income communities could be restricted on where to find places to leave, those places that they are able to access because land could be, land could be cheaper, are more polluted. And if they’re more polluted, then they have these other potential effects in the future into what are their outcomes. And so it’s hard to understand what is the origin. It’s either that people arrive to a place that is polluted or not or people–certain groups arrive there in and community–and these facilities locate where those people are located already. And so we have this chicken and the egg problem. And I think that there’s a lot of economics literature that has tried to focus on understanding this origin. It’s of course a very hard, very hard question to answer. But there’s some literature that has found that it really depends on the type of pollution that you’re looking at, and the type of–the type of pollution that you’re looking at, and also the geographic–the geography of the United States. So there’s some literature that has found that in Los Angeles, for example, in LA, some refineries arrived, when low income and minority communities were already leaving. So that is something that some literature has found. But in other places of Southern California, as well, we see that some, some communities arrive to places that were already polluted. And it’s hard to disentangle. So some work by Manuel Pastor and other researchers in California have shown that this chicken and the egg problem is really difficult to understand. But there are some other recent literature that is trying to understand those processes more clearly. So I know that you have had Jonathan Coleman as part of the guests here in the podcast, and he has talked a little bit about how these different cycles and how moving to opportunity can be, can be a way of trying to get away from not only some inequality in income, but also some environmental inequality as well. So we see this in the literature, and there are some recent advances for that as well.
Michael Livermore 11:33
Yeah. Yeah. So it’s, as you say, it’s not surprising that this is difficult to untangle. Any type of these kinds of deep causal questions are tough. It’s not like we can run an experiment on any of these things, and so it’s going to be difficult. It is interesting to consider that third possibility. So the–it’s almost certainly that it’s just very hard to believe that some relationship from income to environmental quality isn’t happening, right, just because, you know, people, the way I kind of say this, people who have money have lots of nice things that are nicer than the stuff that you know, people with less money have, and it’s just, would be very surprising if environmental quality just didn’t work that way, in some respects. But then there’s obviously as you said, there’s citing decisions. The–you know, there’s this, really–real possibility that, you know, the environmental quality that you’re born into, has an effect on your downstream, you know, life prospects. So those are all, you know, totally, very, very interesting areas of research. But, you know, this idea that there’s a third variable that could have, honestly I just haven’t considered this all this much. But, you know, just kind of imagine that you start off in a society, theoretically, some kind of an imaginary equal society. And then there’s, you know, some policymaker that’s doling out good things, including money, and including environmental quality, and then just preferentially doles out those two things to some people and not others, there’s going to be a correlation, but it’s because of like the doling out process. I mean, is that plausible? What do you think? Is that a story that the community, the kind of research community has considered? And would it just be discrimination in the policy process more broadly? Or is there something kind of specific that, you know, kind of more specific that would lead us to think that that’s kind of what’s happening is that there’s this third variable that’s leading the, to these correlations to kind of show up in the data?
Danae Hernandez-Cortes 13:33
Yeah, I–this is a great question. And I think that this third variable, which is a greater number of like policies, in this case, like, almost like, decision planner, just coming in and distributing pollution or income inequality could, could have different consequences. And I think that how we–these policies, I think that this is going to be a little bit hard to answer. But I think that policies are not being implemented in isolation of the general distribution, and where people are leaving, and some of the things that they have faced in the past and some of the inequalities they have faced in the past. And so we are living in a society that is highly unequal in several fronts. And any policy or any potential intervention that could happen could have unequal outcomes just because of all of these historical inequalities. And I think that this is not directly answering the question, but I think that it’s important to understand because regardless of how that policy implement–is implemented, it may have on equal outcomes, because of the fact that there’s this long history in the relationship of environmental and income and race inequality, that is happening in the background. Yeah, absolutely.
Michael Livermore 15:04
And you know that–the interaction with race here is maybe, maybe illuminating. You know, if it was just an income sorting story where wealthy people go to the places that have higher environmental quality, and people with less, who are less well off, kind of go to places where it’s less expensive to live, and that often means lower environmental quality. You know, that wouldn’t explain why there’s, as you said, this kind of–race is also predictive here, right? So if you run a, if you run a regression, and you’re trying to figure out where, you know, what, you know, you’re kind of looking at correlations between income and environmental quality, including race in that in that regression is going to improve the performance of the model, right, which is telling us that race is a factor kind of above and beyond income. You know, I–personally, I’ve always thought that that misses part of the story, you know, the fact that race is so closely correlated with income, like we shouldn’t just kind of pass that over as like, “oh okay, well”, we just accept that or something that itself, is, is real bad. And, and, you know, we should, you know, that its own quote, unquote, only income helps explain some of the variation in the racial correlations doesn’t mean it’s like, not normatively problematic. But in any case, I think it does maybe tell us something about the mechanism, perhaps, because there’s not really such a clear, you know, kind of sorting story with respect to race as there might be with respect to income.
Danae Hernandez-Cortes 16:39
Yeah. But there have been some policies that have this, particularly being–trying to accelerate these disparities in the access to some housing. And I want to point out one important, one important piece of research that Peter Christensen and Chris Timmons have been trying to do, that have published and it has been very interesting, and is when you, that–the places where people are able to access in terms of where they live, also depends on these characteristics on their income, but also on their race. And so it’s important to know that if people have a restricted set of alternatives, and where they are going to be able to move to, then they also have restriction into which type of environment they are able to even
Michael Livermore 17:32
get to live. Yeah, that’s absolutely true. Yes.
Danae Hernandez-Cortes 17:35
So it is very interesting. But these relationships are, are really hard to disentangle. And I think that that’s why some of the current environmental literature and environmental economics literature has been trying to understand that and, and it’s also, at the same time, that we have started to understand a leverage some of the incredible data that is collected out there that we can leverage to understand this question. So we’re in a very interesting point in time to study off of these questions. Yeah, absolutely.
Michael Livermore 18:06
Absolutely. You know, just that, you know, that the point that you were just making is completely right. And just to, just to emphasize that, obviously, there’s housing discrimination. And so that is going to interact with income. Now, just in the vein of our kind of general conversation here about the relationship of income inequality, environmental inequality, and maybe other kinds of inequality. So, I’m gonna guess–although I don’t know, and this is outside your immediate area of research so perhaps it’s not a totally fair question. But my guess is that there’s going to be other areas like this, where there’s going to have it kind of almost exactly the same setup. Like you have, there’s income disparity in access to health care, there’s income disparity in treatment by the criminal justice system, there’s income disparity in educational quality that people have access to. And then race on top of income is going to be predictive, even controlling–to say even controlling for income race, there’s still going to be racial disparities. And so that it sounds like, again, environment is kind of, just follows the same pattern that we see in these other domains.
Danae Hernandez-Cortes 19:21
Definitely, definitely. And I think that one interesting fact about the environment is that any policy that–what many policies that could target improvement of the local environment will be place based in general, right? If you are trying to say, increase access in–to health to hospitals, maybe you do it in a larger, in a larger state or in the whole country. But sometimes, local environmental policies have the potential to really affect the people who are living in those communities. So I think that it’s true that environment in environmental inequality will be alongside all of these other sources of inequality. But I think it’s a little bit different in the sense of how this relationship between some of the citing decisions, some of the, the nature of the pollution problem as well. And actually, I would like to mention some part my research. I, part of my research is also trying to look at these other, these disparities and how they interact with environmental disparities. So I have one working paper together with Ty Ling trying to understand what is it? Is it health disparities, or is it, or is it environmental disparities that is preventing these trends? What, what is the main factor that is happening? And we see it very clearly in California, where environmental disparities have definitely been declining, if you see to some pollutants, not others, but if you see some pollutants, some of these disparities have been declining, but health disparities haven’t. And so this is very interesting, because if we think that environment explains health, but we don’t–but we see environmental, despite this reducing and health disparities not reducing, then maybe we’re not targeting the right, the right sector, right? So it is very interesting. And all of that, overall, is interacting, and it’s hard to answer what part is health disparities, what part is housing discrimination, what part is income inequality. But all of them are likely happening in the background. But having these tools of causality that economists often have, for analyzing these questions, it’s important to, to leverage and trying to answer these questions. Yeah,
Michael Livermore 21:50
that’s super interesting. So I want to talk about this piece of actually, when I get back to so many interesting things to talk about. Because I want to get back to this, this notion of you know, what is tied to place and how much inequality is kind of driven by, you know, place, and how much of it is driven by other things and correlations between characteristics and places, that just strikes me as a really interesting thing to talk about. But anyway, I just with respect to that research that you’ve been that you were just mentioning, you know, one of the, you know, when, kind of, of your recent papers that I was looking at, is leveraging this huge decline in particulate matter exposure from the electricity generating sector, which is just, you know, we don’t celebrate this enough, right. So like, maybe you can give us the numbers. But, you know, in the last 20, odd years, there’s really been just a staggering reduction in exposure to particulate matter, which is a really serious pollutant that causes, you know, is associated with premature mortality. So, so maybe we could tell the happy story there. And then yeah, maybe unpack that, that work on, on the relationship with inequality?
Danae Hernandez-Cortes 23:02
Yes, of course. And in this paper, where–it is a paper together with Colleen and Paige Webber, and we’re trying to understand what are the main drivers of the reduction of particulate matter coming from the electricity sector. And what we see is that this particular power consumption concentrations have decreased a lot around 89% for the average individual in the US–
Michael Livermore 23:25
which we should just pause and say, that’s a 90% reduction, and this is between 2018 or thereabouts. Right?
Danae Hernandez-Cortes 23:31
Exactly, exactly. And that is impressive in and of itself, because if you compare to the overall pollution, say all of the potential sources, it doesn’t, like all of the other sources have also declined. If you look at the pollution concentrations, that I’ve just seen monitors that captured all sources, it has also been declining, but we don’t see the same rate, as in the case of the electricity sector, which is impressive. And that has been a combination of many factors. Some of them are driven by policies that are targeting air quality, such as improvement–improvements in emissions intensities, improvements in the technologies that the power plants use, etc. But there’s also other policies that are happening. So this change of coal to natural gas and the eventual change of renewables have also probably led to some of these changes as well. We don’t look at the, at some of these renewable energy but in terms of this transition from coal to natural gas has also decreased inequality as well. And so they’ve said they’re trying to disentangle what are the potential changes of pollution coming from these different sources, but not only in terms of pollution, but also in terms of disparities of that pollution so we calculate also the health disparities have changed between different minority and income groups, and we see also different convergences in, in those disparities. So we do see these convergences in disparities as well.
Michael Livermore 25:16
Yeah, which is really good news that we see, you know, see disparities going down. But as you note this in, that’s very interesting finding that, that doesn’t seem to be affecting disparities in health. And I guess there could be a couple of different possible stories there. One that would be like an extreme skeptic, just articulated, even though I find it implausible is that you know, environmental quality or air quality isn’t affecting anybody’s health. And so the fact that you’ve, you know, reduced, you’ve improved air quality, and you’ve reduced disparities, it just isn’t mattering in some sense, because the link to health is, is not there. That I just find very implausible, just because there’s such a strong evidence base for that. So then, what the heck’s going on? Is it just that there’s so many other things that are, you know that air pollution is an important component of health, but there’s so many other things that affect our health, that even if you reduce, you know, when you improve the air, it does impact our health. But, you know, it’s just gonna be hard to measure, there’s gonna be a lot of noise because so many other factors, or is it that other sources of health inequality have like increased and then made up for the reduction in environmentally related health inequality? Or what’s the story there? What do you think is going on?
Danae Hernandez-Cortes 26:35
Well, I think that it’s a question that we are still trying to understand. But I–let me tell you that the literature has consistently found that improvements in environmental quality lead to improvements in health. So it’s hard to believe that this is one of the reasons that we’re seeing what we see. But one thing that could be the case is that there are disparities in health access that have been very prevalent that prevent people from access the care that they need, in the case of, one of, pollution exposure. And that can be the case. But there’s also another strand of literature that tries to understand what is the role of cumulative inequities that could be leading to these disparities, and I think that that is one part that could be happening as well, that it’s not only exposure to health, but also, what is the, it’s not only the exposure to pollution in your census tract, but it could be the quality of your house, the level of insulation, it can also be, what is the type of exposure that you have on a daily basis is that changing because of income or race? So for example, if some groups are more exposed to pollution, because they work outdoors, that could be affecting the exposure and therefore affecting the scientists as well. So it’s hard to believe that it could be a story of only the environment. I think that is all of these other things that could be potentially affecting health disparities. What is happening in the background? And hopefully, our work in this field will allow us to answer some of these questions. And, and we’re hoping to, that we are able to disentangle what could be driven by environmental disparities decreasing and what can be driven by other, other disparities in health access.
Michael Livermore 28:37
Right. Here, part of the problem, of course, is that these are time correlated variables, right? So there’s just so much else going on at the same time. So even if we’re reducing one source of inequality, it’s possible that there’s another source of inequality that is increasing in the same time, over the same time, and then it kind of washes out when you look at health effects. Yeah, yeah, very, very interesting. Very interesting work. Maybe just also, kind of while we’re on the subject of your recent papers, as another bit of, you know, some of your research that’s obviously super relevant, interesting these days has to do with the potential distributional impacts of market based mechanisms to control pollution. And so, you know, as you’re well aware, many economists favor regimes or instruments such as cap and trade programs or environmental taxes as a way of controlling pollution, because it increases flexibility, leads to lower cost emissions reductions, and for various kinds of other reasons. But there’s been a consistent worry that these programs will lead to hotspots or will lead to increases in environmental disparities even if they’re good at reducing pollution at low cost, maybe they push the pollution around in some way that makes things worse from a justice or distributional perspective. So you’ve done some empirical work on that. And maybe we could just start with, like, what is the theory for why it would be the case that market mechanisms would be worse than say command and control with respect to equity? And then and then maybe talk about what some of your research findings had been.
Danae Hernandez-Cortes 30:33
Yes, of course. So, first of all, market based instruments are not–market based instruments have been favored by, by economists for many years. And these type of instruments have the advantage that it can lower the cost of achieving an environmental objective, which is great from an efficiency standpoint. But since markets are not prescriptive of where this pollution might be occurring, and where we will find these decreases in pollution, the same advantage that we see in terms of cost reduction could lead to environmental disparities by having this reallocation of pollution across a space. And so this is the main question is, why, why is the difference between markets and all their more restrictive policies in terms of like command and control policies that could be reducing this pollution as well from a more prescriptive manner in terms of trying to, to, to have a more predictable outcome on the total pollution that is being emitted. And so markets, you can, you cannot see which facilities are going to be reallocating pollution, which would mean that there could be a concern in terms of environmental distribution, because some facilities might require more permits or might pollute more as a result of the market. And this, if it’s correlated with where communities are located, then may lead to environmental justice concerns. So this is a main question that is, that is appearing. And it’s very relevant, because several policies, push the reallocation of pollution somewhere else and could lead to this environmental inequality per se. And it could be very bad because, in general, some of these policies are aimed at targeting pollution of one type. And there could be some unintended consequences in the pollution of another type. And in the case of the carpentry program in California, the carpentry program in California, which is the one that we’re studying in the paper, it was introduced in 2013. And in this program, one of the–the main target was to reduce greenhouse gas emissions, which are commonly mixed pollutants, and those is not subject to local pollution concerns. However, when they say greenhouse gases are often quite emitted with local air pollutants, such as PM 2.5, NOx, or SOx, that therefore this program, while in turn where pollution from greenhouse gases, is occurring, could also in turn, where the local air pollution despite these are going to be occurring, because these local air pollutants are co emitted with greenhouse gases. So therefore they can change the amount of emission, who is emitting them, and where they might be emitting, therefore having an environmental justice problem, which is that maybe those facilities that are emitting, are emitting more greenhouse gases or not might also emit more local pollution, which may lead to environmental justice concerns. So that is some question whether that happened in the case of California. And what we find is that, actually, the carpentry program led to decreased disparities in the emissions of some of these pollutants as well as greenhouse gases. And we find that disadvantaged communities as defined by the California government experience, or benefit from those reductions. So we see that California, California says on average, communities are actually being benefited by this program and reducing some of these environmental disparities.
Michael Livermore 34:27
Yeah, yeah, it’s a it’s a, it’s a really interesting finding, as you say, there’s, you know, this is a really important issue and it comes up, it’s been a huge part of the discussion in California about the cap and trade system, whether it’s a good thing and, and so on. In a way, it’s, as you know, you know, it’s kind of theoretically ambiguous, right? Yeah. You know, we don’t know what’s going to happen. That’s the whole idea, in a sense with the markets. And, and it’s just you have to kind of empirically, empirically tease it out. You can model it ahead of time, I guess, but then, but then you have to see whether those models are accurate or not. So it’s a really big and important public policy finding that actually, that it appears the cap and trade program has led to a reduction in, in disparities in exposure to these air pollutants of concern. So that’s, that’s a huge, important finding. And I hopefully, it’s getting the attention it deserves in California. You know, is there a, is there a lesson here for future policy design? I mean, in part because it’s theoretically ambiguous, and it just plays out the way it plays out. Is there anything we should be thinking about for for future efforts? You know, given this relatively happy, you know, happy finding in California, but there’s no kind of guarantee that that’s going to be the case, the next, the next spin of the wheel.
Danae Hernandez-Cortes 35:54
Of course. And I think that that, this is a great question. And first of all, I would like to say that in the case of our paper, we restricted the facilities that we were examining. So some, some different facilities and a different composition than our sample could be completely different results, although we checked compared to other sample composition, and our results are robust. But that’s something that I will always like to, to carry out. But in general, I think that one thing that is important to understand about the contribution of this paper and all their policies in the future is that this type of policy could have happened the other way around. It really depends on the characteristics of the downwind populations, and also the characteristics of the facilities. In our case, we saw that the facilities with the larger Marginal Abatement, sorry, the facilities with the lighter emissions, were the ones that were decreasing pollution the most, which is consistent with this idea of a cap and–if a cap and trade program is targeting those that are polluting the most, then if those are the ones that are located close to these communities, then we might see similar, we might see improvement in this area. So that is what we consistently find in this paper. And so this is important to consider in the case of other potential implementations that are, that are similar to this. But in general, I think that it’s important to make a, really–make it very clear that some environmental, environmental outcomes that are being targeted by a policy might not lead the desired result for another outcome that it might be directly affecting. So in this case, the pollutant that was targeted by the program was greenhouse gases, right? But we also have this other environmental, environmental issue, which is environmental disparities. And so whenever we are trying to reduce environmental disparities, we should also be aware that environmental problems need–environmental environmental justice problems need environmental justice policies, right? We cannot hope that any policy that affects the pollution of one, of one facility may lead to environmental justice improvements. And that is something that it’s important to consider. So other policies that are, that have to do with improving the outcomes of these communities are also important to consider.
Michael Livermore 38:29
Yeah, yeah, it’s interesting, although, you know, I mean, part of the.. I think the happy story, again from the, from your research is when we reduce aggregate pollution, it actually often, again, it doesn’t necessarily have to lead to reductions in disparities, but it does seem to be the case that it often does, which isn’t super surprising. I mean, if you cut particulate matter by exposure by 90%, it would have to be really horribly distributed, right? I mean, something really bad would have to be happening, where, you know, where that wouldn’t also reduce reduce disparities at some at some level? I mean, certainly. So there’s like, there’s just a lot of interesting moving parts to that, like, say you cut exposure to some pollutant by 90% and disparity doesn’t change, right? So you go from where folks were, it was, you know, you go from a situation where, so you have two populations: less well, and more well off. And, you know, the more wealthy people were being exposed to 50 units and the less wealthy people were being exposed to 100 units. That’s pretty bad disparity. You cut that down to, you know, from 50, to five for the wealthy people, and from 100 to 10 for the less wealthy people. I mean, that’s…the disparity in a sense hasn’t changed but everybody is just so much better off in that kind of circumstance. I guess the question is, how should we think about? Like, like, what is that? You know, should we be happy with that outcome? I mean, everyone in the less well off community is much better off, they went from 100 to 10. They’re also, in the less well off community, way better off than the well off people were before the policy, right, because that’s a change 50 to 10. And so that seems like a very happy story, you know, but we still, I think, would have kind of, wouldn’t quite sit all together, right, because the policy was good, in that it reduced everybody’s exposures by a lot. But it didn’t kind of address this inequality problem. Yeah. How do you, how do you, obviously, is a purely normative question, nothing really empirical about it, but like, how do you, how do you think about the normative stakes of, of that kind of scenario happening?
Danae Hernandez-Cortes 40:58
Yeah, well, this is a fantastic question. I think that, that, well…I mean, I think that what you’re mentioning is really true. It’s not only caring about how much exposure is being reduced in aggregate. But there’s also concern about the inequality per se, and the resulting inequality at the end of the policy. And I think that the, the, I think that there are other things happening at the same time. And I think that some other policies might might be similar, may have similar stories in this sense. There’s some policies that might be, that might be reducing pollution more and other policies might not. And having these two alternatives is always hard to compare, it’s hard, because you can only, in the case of our paper, in the case of many papers, you can only compare what happened to the policy before and after, you cannot say why would have been a policy that could have reduced more or that could have gotten rid of this, this inequality, right. So I think that that is a very that, that is something that is limiting in that sense that a lot of these papers are all only able to compare the before and after. And so for us, looking at this reduction might be great, but we never know, what is the potential other alternative that could have happened in the background. So that is the first thing. And the second thing is what is it–I think it’s also important, and we haven’t mentioned it in this discussion, partly because, you know, we haven’t studied this, but what is the process to which we decide which policy is the one that we’re implementing? It’s also important, I think that sometimes there is one important fact there, which is, are the communities liking that policy? Do they think that it’s working? And so I think that that is also another thing that could be happening there. Now, in a normative sense, how do we feel about that? Well, first of all, I think that any improvement in environmental, environmental quality for these communities that have experienced all of these, these disparities in the past is good. But at the same time, what are we left with? Are we left with more or less inequality? Well, that could also be an undesirable outcome per se. Maybe what we want is just to get rid of all the inequality altogether. And so I think that that’s also important to consider.
Michael Livermore 43:32
Right. Yes. Great. So yeah, and there’s a lot of important stuff in there, including questions around process, which, of course, the environmental justice community has consistently emphasized it’s not just about results, that it’s about inclusion in the process. And maybe we could talk a little bit about that, as well. Yeah, maybe let’s just focus on that for a second. So, has there been research on that question? I mean it’s a little bit outside the standard set of questions that economists normally ask. Economists tend to be very outcomes oriented, very kind of consequentialist in their normative views and very outcomes oriented in terms of the empirical questions that they study. So is this a, is this something that environmental economists have asked about is, is process and are there metrics for process? Are we interested in people’s perceptions? Are we trying to develop, kind of, some kind of objective notion of what kinds of processes are good? Yeah, where’s the field on these questions?
Danae Hernandez-Cortes 44:36
Yeah, so these questions are more–you’re totally right, that there’s two questions happening here. One is the, what is the distributional outcome at the end? The other one is what is the process and what is the procedural justice whether people are being considered or not? And I think to that sense, there have been some papers that look at some of these issues. So for example, who is involved in the decision process, but in general, those tend to be very hard to answer. And there hasn’t been a lot of this, a lot of this research. There’s a couple of papers that have shown that the, that the– that the process is important, definitely. But in a way that we can focus on an outcome of the process. I don’t think there has been some papers looking at that. I could be wrong. But it is also an important thing. And I think that in the paper, where we, where we analyze some of the literature we leave, we leave it very clear that that would be an important contribution for economists, which is how is procedural justice and these differences in the access to the political process? The determining the total outcomes is one of the important questions to answer in the future.
Michael Livermore 45:54
Yeah. Yeah, of course, and that should make economists relatively more comfortable, right? Because there’s still an outcome orientation. Right. So the question of how does the process affect the outcomes, there is a kind of outcome independent element of process as well, that, you know, when you, even if the process leads to exactly, you know, some kind of benign dictator has, you know, the same outcome as a democratic and inclusive process, we might still favor that latter process, even entirely apart from effects on outcomes. But yeah, that’s, that’s a hard question, I think, for economists to try to get at.
Danae Hernandez-Cortes 46:32
Yes, I know, there are some tools that we can get at in trying to, again, disentangle some of these consolidated questions. We have some tools for that, but it’s in general a hard question to answer. And, I mean, that doesn’t, that shouldn’t restrict us, right, trying to focus on how we answer it, maybe just having a description on, on these different outcomes, and how different access to process–to decision making processes, make difference or not, could be just really good to describe this, this differences.
Michael Livermore 47:07
So maybe just like returning a little bit to the themes that we were talking about earlier, which is the the role of place in environmental justice and environmental inequality, where just strikes me as a really interesting, interesting feature of this work, and really the way that inequality generally is tied to place. You know, in a way, it’s, as you mentioned, it’s true that the environment is very place based, you don’t take the air around with you, right? But education is very place based, access to health care is very place based, personal security and policing is very place based. And all of those, you know, different kind of facets of life, are very unequal in our society. And so one possible response to this right is, well, let’s focus on places. Let’s, kind of, comprehensively you know, improve school quality and improve environmental quality and improve access to health care. But there is–then you run into this sorting problem, which is that which goes by another word in, in many contexts, which is gentrification, right, is that when you go in and you kind of change how a place functions, it often, that–that can lead to changes in the composition of the people who are there. Rents go up, prices go up in general, and, and people sort around that. So I’m just curious if you have thoughts about this, in general, as someone who studies these issues, I mean, obviously, it goes to the heart of, you know, how do we address environmental inequality and inequality? Generally, if, if, you know, every time we kind of–if we orient ourselves towards these place base improvements or place based interventions, you know, there’s the kind of the sorting mechanism, gentrification that happens, that just, it seems like a bit of a treadmill that we could never get off. And I’m just curious if you have thoughts about what kind of policy instruments we might consider to deal with that.
Danae Hernandez-Cortes 49:19
Yeah, this, this is at the core of many of the current questions that people are facing. How those changes in, in the quality of an outcome might change the probability of people moving sorting, and it is hard to answer per se, what are the, what are the policies that could, could lead to these gentrification or not because they are hard to, they are hard to be answered in general because you need a lot of detail on the people living there. You need to know where they are deciding to leave over time. You’ll also need to be exposed to a shock that is particularly big enough that is changing the amenity that leads to this sort of thing. But in general, I think that it’s important to understand that the role of pollution per se, and whether that is incentivizing people to move, because then you can then understand which policy might be better. So for example, if you have a policy that is simply improving pollution and people are restricted on where they can move or not, then it might not be desirable, because if people ended up trying to move, then they are restricted or where they will end up after moving, right. So I think there are a lot of interaction between these, between different policies happening that we should be aware of. Now, in general, gentrification has been, in general, gentrification has been linked to changes that have been very, very big changes of pollution. So there’s a very nice paper by, by Lala Ma, Elaine Keel, and Alicia Cassidy, that is looking at brownfield remediation and how that did not change, that did not change who was serving, however, those places were being where were being cleaned up. And the main reason was that, yes, it was changing in environmental quality. But it was not such a big change, that there was this movement. So I think that it depends a lot on the policy. And I think that for us to be able to find that this actually affecting migration, we have to see a policy that is changing the environment a lot.
Michael Livermore 51:49
So we can improve the environment, but not too much.
Danae Hernandez-Cortes 51:53
Well, I think that that, I think that is not a very good conclusion. But I think that it just leads to these other policies that are happening in tandem. Is it housing policy? Are people restricted because they don’t have enough income to move? Is it an income story? And again, all of these things are interlinked. But it is very hard to not think of them in tandem.
Michael Livermore 52:18
Yeah. Complicated stuff, but, but obviously, really, really important. So maybe just changing tax a little play–a little bit. There’s this kind of what I think it was almost the inverse of concerns about the distribution of environmental quality, which is concerns about the distribution of the cost of improving environmental quality. So obviously, this plays a massive role in debates about any environmental measure that you could imagine is there’s questions about not only the aggregate costs, but also the distribution of those costs. So you know, kind of climate change would maybe be the clearest, contemporary example, where, you know, there’s concerns that if we implement serious carbon policy that, that’s going to lead to increased electricity prices, which is going to be regressive. There’s geographic distribution, there’s distributional issues around the economic sectors that are going to be affected by decarbonization. So yeah, so I guess one, one broad question is just within the field. You know, what’s, what’s some of the–it’s kind of these theoretical things that have been well known for a long time, I don’t know if there’s been, you know, progress in any empirical questions. But generally, the degree to which this is seen as the same research program, right, just about the distribution of regulatory costs and regulatory benefits in the environmental domain, or, you know, whether it really we see kind of a bifurcation of the questions that people are interested in, folks who are more focused on environmental quality and distributional issues there. And then, to the extent that there are folks interested in the distribution of the cost of improving environmental quality.
Danae Hernandez-Cortes 54:10
I think that they should be part of the same discussion. I don’t think that they can be thought of in isolation, I think that they are mutually informative, especially because we’re in a point where there has been these concerns about environmental justice, and they are important concerns. And I think that in general, there’s a lot of, the cost of environmental policies are also important. So I think of thinking them together, it’s good, particularly in the context of climate change, because the costs are very heterogeneous and very unequally distributed across populations. And we shouldn’t be–we should be aware of those of these distribution while we also try to think about what the cost of the policy per se.
Michael Livermore 54:58
Yeah, of course in the climate change context, there’s also the intergenerational distribution of, of costs and, of costs and benefits. And I wonder, as a scholar of environmental justice, is that something that you, you know, that you think is, again, under the same rubric? You know, sometimes I mean, in some ways, it’s like a lot–I mean, obviously, a lot of environmental questions have very long time horizon, time horizons associated with them, even traditional environmental pollutants, not just greenhouse gases, it often takes a long time for a policy to be implemented. And, you know, the people who live in a community, when the policies adopted aren’t necessarily the people who will be living there, when the policy finally kind of comes to fruition. Is that something that you know, that you think about that you worry about? Or can we, can we abstract away from that at some level and kind of think of the people of today representing this, this, they’re kind of their same community, but there’s a kind of a continuity in the communities even if the people are turning over?
Danae Hernandez-Cortes 56:03
Definitely, there’s a very important generational component, and I think that this generational component is also linked to this inequality, the present inequality, because as we have seen the outcomes of the same generations that you had before affect your outcomes. And so thinking about the future, and the future outcomes of the generations that are to come, are not independent of what is happening right now, particularly in this distributional, in this distributional aspect. So if we continue to face these disparities in environmental, environmental outcomes, I–It’s pretty sure that we will see that in the future as well.
Michael Livermore 56:46
There’s a kind of a self perpetuating element to some of these, some of these inequalities. Yeah. So, so I think maybe this will be the kind of the final question I’ll leave you with. This is, is kind of a bigger picture question, maybe. But it relates to the point you were just raising, which is the, maybe the self perpetuating nature of some amount of inequality, including environmental inequality, that, you know, decisions that were made 50 or 100 years ago, or longer, like, you know, even over a very long time horizons, kind of just perpetuate in some sense that the level of inequality or at least some features of the of the inequality landscape, are not really the result of conscious decisions that are happening now. Certainly not decisions intentionally to perpetuate that inequality. But they just kind of occur as a, as a consequence of, let’s say, people investing in their kids’ education, and people who have more money, have more money to invest in their kids’ education, right. And so their kids are going to be in a better position to, you know, to attain in the education system, to earn higher incomes. And when people are doing that they’re not intentionally trying to lock in or perpetuate inequality. But their behavior certainly is doing that there’s no I mean, it’s very hard to see that that’s not a consequence of those decisions. So yeah, I’m just curious what, you know, what you think, normatively about that, or is that just outside the research agenda? I mean, in some sense, you know, this could be happening in the environmental context, as well, that there’s just kind of, in some, like, a locked in or past, even explicitly discriminatory practices that just perpetuate forward in time, without–and will perpetuate for us kind of indefinitely without some kind of intervention. Is there a way to identify those and separate those from where we’re kind of actively causing new, new inequality that, you know, that wouldn’t have been there except for our decisions today?
Danae Hernandez-Cortes 59:00
Yeah, and I think that that’s, this is all very important. And I know that some of the consequences of the outcomes that, that we’re seeing today are the result of some of the decisions in the past, some of them intentional, some of them not. But what I can say is that, in general, in the sense of environmental inequality, we are aware that some of the tools that we have used in the past have worked. This meaning improvements in air quality, generally tend to benefit the general population overall, but also, sometimes the places that are most polluted, therefore benefiting and improving environmental, well, reducing environmental disparities. So I think that the, the individual decisions that were made in the past have an impact now, and I think that that’s even more of a reason as to why to create the public policies that could benefit and reduce disparities in the future because these decisions matter for the populations living there and will have an impact in the future as well.
Michael Livermore 1:00:13
All right, well, thanks so much for the conversation. This has been a really interesting chat and thanks for all of your incredibly important work in this area. These are all very, very vital questions and they no doubt gonna continue to have a huge influence over our discussions of environmental policy for, for years to come.
Danae Hernandez-Cortes 1:00:35
Thank you so much for having me. This was great.
Michael Livermore 1:00:38
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