Environmental Equity Makes Business Sense

One Monday early last month, Gov. Pete Wilson vetoed legislation that would have required that the state’s Environmental Quality Act be revised to include considerations of “environmental justice.” At the end of the same week, in another part of the state, policy leaned in the opposite direction: The South Coast Air Quality Management District, the agency charged with reducing smog in the Los Angeles Basin, adopted a new program to monitor and correct potential environmental inequities.

What exactly is “environmental justice”?

The concept first emerged in the mid-1980s as researchers discovered that minority residents often faced disproportionate exposure to hazards such as toxic storage and disposal facilities. By the middle of the next decade, policy awareness had risen to the highest level: The U.S. Environmental Protection Agency established a special office on the issue, and President Clinton signed an executive order in 1994 requiring that every federal agency consider environmental equity in its decision-making.

The private sector, fearing yet another layer of government rules on land use and the environment, has tended to resist this new expansion of civil rights. Indeed, Wilson cited potential business reaction when he announced his veto.

Waste Management, the world’s largest waste-disposal company, has helped orchestrate the chorus of resistance by sponsoring sophisticated national-level studies suggesting that earlier claims of disproportionate exposure by race were exaggerated. Most significant, when researchers controlled for income and other factors, ethnicity was not generally correlated with hazardous sites, the studies indicated.

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These results suggest that disproportionate exposure is simply an economic phenomenon: Locally undesirable land uses (LULU) are reasonably going where incomes and property values are lowest. And, researchers claim, since “minority move-in” may occur after a LULU has further driven down housing values, the apparent demographic differences may reflect market choice and not pervasive discrimination.

In Los Angeles, however, the evidence indicates that color does matter and that a reliance on market forces may be exacerbating the inequalities.

In research forthcoming in Social Science Quarterly, I and a team of researchers from Occidental College found that minorities in Los Angeles County faced twice the exposure to hazardous waste facilities as did whites. More significant, the pattern of disproportionate exposure by race held even when we controlled for income, mix of land zoning, occupation of residents and other relevant factors.

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Our preliminary research on air pollution released from stationary sources (such as metal platers, furniture makers and other manufacturing facilities) suggested a similar pattern. Moreover, the more toxic the release, the higher the percentage of minority residents. The minority move-in explanation seems unlikely. To believe that, you would have to argue that African Americans and Latinos with the same income as whites simply prefer to congregate near toxics.

The market--or rather market-style policies--may contribute to making things worse. The AQMD’s recent decision to investigate environmental inequities was prompted, in part, by community concerns over emission trading programs.

These kinds of programs allow firms to forgo costly cleanup at one facility by paying for an equivalent (but presumably less expensive) amount of pollution reduction elsewhere in the region. From a purely economic perspective, the result is improved efficiency: The region winds up with the same enhancement in air quality, and firms wind up with better balance sheets.

But if the dirtiest and most-expensive-to-clean sites are already disproportionately in minority communities, then choosing to clean up elsewhere will exacerbate what some label environmental racism. These were the grounds on which one of the Southern California’s leading environmental justice groups, Communities for a Better Environment, recently sued the AQMD and five oil companies, all of whom were opting to buy and scrap old cars rather than install vapor-control equipment on their refineries in San Pedro and El Segundo.

The result, CBE claimed, was excess emissions of leukemia-linked benzene and other toxics in largely Latino areas already suffering from pollution overload.

The AQMD has decided to reexamine the issue as well as to monitor the toxic accumulations that might be resulting from both existing sites and the implementation of trading policies. Efficiency and equity seem to be in a classic clash, and business is surely concerned.

Yet the concern should translate into action rather than resistance. “Win-win” collaborations are possible, including joint efforts with community groups and governmental agencies to clean up “brownfields”--industrial locations where liability worries about previous toxic uses have impeded real estate development. Given the location of such toxic sites, paving the way for business investment in these areas could disproportionately help minority residents.

Moreover, business should recognize and help find ways to address the uneven impact of emissions credit systems, perhaps by tempering market-based pollution trading with stricter regulations on individual sites.

Businesses should also welcome the AQMD’s new effort to look at the cumulative health effects of multiple pollution sources. Although firms are ultimately responsible for only their own pollution, they cannot escape the fact that the industrial districts where they do business may create toxic “hot spots” that threaten the health of their neighbors.

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Finally, rather than simply hoping that a sympathetic governor will continue to veto new regulations, business should be working with the public and community sectors to determine which demographic factors should be used to determine the location of new facilities.

In short, business needs to get ahead of the policy curve. The reason is partly pragmatic: Although recent polls may suggest that minorities and the poor are not at the top of the agenda, Americans feel differently about the environment. From the industrial wastelands of Wilmington to the rolling hills of the Palos Verdes peninsula, clean air is seen as a public good--and residents are deeply suspicious when environmental health becomes a “means-tested” privilege reserved mostly for the rich.

The private sector has already acknowledged concerns about environmental protection in general and sometimes outpaced the public sector in understanding the advantages of work force diversity. The environmental justice movement may be nascent, but it is surely not going away. Accepting environmental equity as part of the new business climate simply makes good sense.

Manuel Pastor Jr. can be reached via e-mail at mpastor@cats.ucsc.edu