Energy Justice
Subtitle
What it means and how to integrate it into state regulation of electricity markets
Author
Aladdine Joroff - Harvard Law School
Harvard Law School
Current Issue
July-August 2018
Issue
4
Energy Justice

The evolution of electricity systems raises fundamental questions about how to balance innovation with costs to individuals, particularly those individuals who are less able to participate in or benefit from the innovation. Who bears the costs of modernization, and how we distribute the burdens and benefits, are societal questions with policy implications that underlie the concept of energy justice. Energy justice looks beyond income-based discount rates that, while necessary, are alone too blunt a tool to optimize the underlying dynamics that create the need for such discounts.

Although the long-term goals of modernizing our electricity system, whether the sources of energy or the infrastructure (i.e., the grid), include greater personal control over energy usage and cost savings, there are up-front costs that will often be borne by consumers. Even if total costs do not increase, they may be redistributed as pricing systems evolve to reflect the changing nature of connections and customer usage patterns. Increased or redistributed costs raise concerns about potential impacts, particularly disproportionate impacts, on low-income consumers, who are frequently least able to accommodate higher or volatile energy prices.1 This concern drives questions as to whether decisions about our electricity system are “fair” or “equitable.”

Energy justice is a relatively new concept as compared to environmental justice, and although the ideas are related, they at times diverge in objectives and strategies. Achieving the full range of goals envisioned by both concepts 2 requires anticipating where energy and environmental equity concerns overlap or differ. This Comment proposes a framework for evaluating energy justice, recognizing that there is not, nor need be, a uniform definition of what energy justice means or what it seeks to achieve. The authority and process for implementing this framework will differ across jurisdictions, but the Comment examines some of the questions that state legislatures and ratemaking agencies will face when integrating energy justice considerations into their regulation of electricity markets.

Delving Into the Definition of Energy Justice

There are few stand-alone definitions or objectives for energy justice, and the universal adoption of a single definition is unlikely. Predicting cost-distribution impacts of electricity market developments is often complicated by the fact that many of these policy initiatives and utility proceedings build on new technologies and novel business strategies. An evaluation of equitable impacts thus should go beyond a static consideration of the cost of isolated actions. The following proposed definition thus encompasses principles that address energy equity issues beyond the consideration of discounts for low-income consumers:

Building on the tenets of environmental justice, which provide that all people have a right to be protected from environmental pollution and to live in and enjoy a clean and healthful environment, energy justice is based on the principle that all people should have a reliable, safe, and affordable source of energy; protection from a disproportionate share of costs or negative impacts or externalities associated with building, operating, and maintaining electric power generation, transmission, and distribution systems; and equitable distribution of and access to benefits from such systems.

This definition goes beyond using energy burdens as a proxy for energy equity concerns. While reducing energy burdens is a component of energy justice, it is only one of the objectives of energy justice, which include:

  1. Reducing energy burdens on low-income consumers;
  2. Avoiding disproportionate distribution of the costs or negative impacts associated with building, operating, and maintaining electric power generation, transmission, and distribution systems;
  3. Providing equitable distribution of and access to real benefits associated with building, operating, and maintaining electric power generation, transmission, and distribution systems; and
  4. Ensuring a reliable source of electricity and protecting low-income households, including those on fixed incomes, from price fluctuations.

While all aspects of this framework are worthy objectives, simultaneously making progress on all principles will not always be possible. The following sections flesh out what is meant by each of the above-enumerated principles.

Reducing Energy Burdens on Low-Income Consumers

From an economic perspective, energy burdens refer to the percentage of income households spend on energy costs: low-income households generally have higher energy burdens than other households, primarily because their income is lower but also because their homes tend to be older and less energy-efficient.3 According to a 2016 study of nearly 50 major metropolitan areas in the United States, low-income households devote up to three times as much income to energy-related utility costs as do higher-income households; in more than one-third of the cities studied, one-quarter of low-income households had an energy burden greater than 14%.4 The burden increases when heating costs are considered.5

Energy burdens matter because households facing disproportionately high energy costs relative to income make budget trade offs that can jeopardize health, safety, and housing stability.6 According to a 2005 survey, a significant proportion of households receiving federal energy assistance in the Northeast reported making budget trade offs because they did not have enough money to pay their energy bills: 20% went without food; 28% went without medical or dental care; and 23% did not make a full rent or mortgage payment at least once.7 Children and elderly individuals are often most susceptible to such trade offs.8

As a metric for measuring progress, the economic size of energy burdens is easier to calculate than other “equal protection” objectives of energy justice, but reducing energy burdens will not be the most appropriate driver in all equity discussions. A ratemaking case, where a utility is determining charges for different categories of users, is a logical context to consider mechanisms to reduce energy burdens; however, it may be less appropriate to link the growth of renewable energy to a reduction of energy burdens. For example, when determining whether or how to compensate or charge residential solar owners, it might be sufficient, from an energy justice perspective, to seek to avoid increasing energy burdens, either proportionally or absolutely, as opposed to reducing them.

An example of a potential hybrid approach comes from Massachusetts, where stakeholders petitioned the Department of Public Utilities (DPU) to “restore” the value of the discount rates for low-income consumers because “the cost of on-site generation subsidies which low-income discount customers rarely receive have had the effect of offsetting low-income rate discounts by almost 20%.”9 This request was presented as an adjudicatory petition separate from decisions about
(1) whether to provide a discount for low-income consumers, and (2) how to integrate renewable energy into the electricity system. The outcome could have been an order directing utilities to immediately and/or periodically review, and revise as necessary, their discount rates to reflect any impacts from subsidies for on-site generation (subject to filing and opportunity for review but separate from rate cases). However, DPU declined to open a stand-alone proceeding and instead encouraged petitioners to raise the issue in company-specific base rate case proceedings, an approach with higher transactional costs due to the multiple filings required.

Avoiding Disproportionate Distribution of the Costs or Negative Impacts

This principle looks to the comparative size and shifting of costs or negative impacts between categories of consumers as opposed to the absolute costs. When commentators posit that the effect of solar customers using less energy from the grid and running their meters in reverse is to shift the payment of lost utility revenue onto individuals who do not have solar panels, they are implicating concerns about disproportionate distributions of costs, given that wealthier homeowners are more likely to own solar panels than lower-income consumers.10

This aspect of energy justice is also concerned with nonmonetary impacts. For example, if businesses or communities develop microgrids powered by natural gas, an energy justice analysis queries whether such facilities would negatively impact air quality in neighborhoods where conditions are worse than in surrounding areas or as compared to state averages, even if compliant with relevant standards.

Providing Equitable Distribution of and Access to Real Benefits

As proposed here, an energy justice analysis considers whether consumers have equitable opportunities to take advantage of energy cost-saving measures and other benefits. When all consumers help pay for changes to the electricity system, resulting benefits should accrue or be accessible to all consumers. Such benefits could take the form of reduced environmental impacts, greater control over electricity usage, or reduced bills. Applying this principle may require considering whether benefits should be distributed equally to all consumers, proportionally based on contributions to cost, or disproportionately favoring those consumers most “in need” of the benefits.

When discretionary actions result in benefits, systems should be designed to enable as many people as possible to take the beneficial actions. In some instances, low-income households interested in taking advantage of new technology, such as programmable thermostats, may struggle with the initial investment required to access associated benefits. Policies informed by energy justice principles should account for these initial costs and consider mechanisms that allow low-income consumers to utilize new technologies without increasing their energy burden. To illustrate, to the extent that residential solar power provides cost-savings or benefits to direct users, solar farms and virtual power plants are mechanisms that may provide similar benefits to populations without access to rooftop solar.

Some ratepayer advocates worry that access to benefits simply for the sake of access may not be meaningful, and could in fact be detrimental, such as access to cheap credit.11 But is an energy justice analysis the right context to decide whether providing access to a benefit is a worthwhile objective if utilizing the benefit could have negative consequences? Rather than making a paternalistic decision to preclude such access at the outset, an energy justice analysis instead could be refined to target appropriate use by (1) looking for potential drawbacks of access to benefits, and (2) ensuring that programs are designed in tandem with appropriate education, outreach, and pilot programs.

Ensuring a Reliable Source of Electricity and Protecting From Price Fluctuations

This principle most closely tracks the traditional goal of energy system regulators: to ensure reliable, affordable, and, more frequently, sustainable/clean electricity sources and systems. From a purely economic standpoint, the historical application of this principle would have frequently focused on access to the lowest-cost forms of energy (e.g., nuclear, coal, or gas). A more-nuanced approach is needed in today’s world, given trends such as (1) renewable generators bidding into markets at negative rates, (2) markets lacking adequate storage to run exclusively on renewables, and (3) evolving systems for real-time pricing. For example, a holistic application of this principle would favor actions that help flatten load curves and reduce peak prices, which would implicate issues other than lowest-cost fuel sources.

This energy justice framework focuses on substantive/distributive justice as opposed to procedural/participatory rights. This is not to minimize the importance of equal access and ability to participate in decisionmaking processes. The focus on distributive justice arose from (1) the greater similarities between procedural justice in the energy and environmental justice contexts, and (2) the greater progress made on procedural objectives than substantive equal protection goals.12 However, relevant to both aspects of energy justice is the need for education and outreach. Energy literacy programs are important because the learning curve for understanding and accessing the advantages of an evolving grid can be incredibly steep for any customer, and this is exacerbated when consumers lack access to information about their energy systems or prioritize other needs. Greater knowledge can empower consumers to take greater control over their energy usage and become more involved in energy decisions.

Energy Justice Is a Concept Additional to Environmental Justice

The concepts of environmental justice and energy justice have commonalities, but they are not always consistent and can differ in the people they seek to protect, the harms they seek to avoid, and the strategies they employ to achieve fair results. Traditionally, environmental justice focused on the aggregation of pollution and sources of pollution in lower-income and minority communities.13 Today, many environmental justice initiatives go beyond siting and permitting decisions, and also promote “fairness” or “equity” with regard to matters such as the oversight and enforcement of polluters, the distribution of cleanup grants, and access to funds for open spaces or other “green” benefits.

Moreover, the definitions and objectives of environmental justice laws and policies are not static, and some expressly recognize a need to address energy-related issues that go beyond the siting of traditional energy infrastructure.14 However, given the framework for energy justice outlined above, most existing approaches to environmental justice are not sufficient to protect individuals in their role as energy consumers as well as in their role as community members.

Environmental justice policies typically seek to protect or assist people at the community level, defining protected neighborhoods by reference to factors such as income levels and percentages of minorities, foreign-born residents, and/or non-English speakers.15 Assistance for low-income electricity consumers, on the other hand, is targeted at recipients based on personal or household income levels. These approaches provide protection/assistance to different people. This is illustrated in Table 1, which compares energy and environmental justice subjects in Boston, a large urban area, and in Concord, a well-to-do Massachusetts suburb. (The comparison in the table is not precise, as it looks at “populations” subject to environmental justice policies versus “households” eligible for federal energy assistance, but demonstrates in the aggregate that the programs protect different people.)

Even when proponents of environmental protection and low-income energy consumers seek to protect the same people, they may disagree on what that means. In the solar net metering discussion, for instance, some rate advocates view residential solar as a non-cost-effective measure that, by decreasing utilities’ revenues, reduces their ability to carry out their social responsibilities, including to low-income consumers. Environmental advocates, on the other hand, may argue that, because all electricity consumers will benefit from the societal value of reduced emissions and avoided capacity investments, any equity concerns should be addressed by making solar power widely available.

To promote equitable solutions and innovations, advocates and decisionmakers should consider both environmental and energy equity perspectives in order to identify and take advantage of synergies and resolve potential conflicts. Dialogue and coordination between environmental and low-income/rate advocates could also increase energy literacy, both among advocates and electricity consumers.

Application of an Energy Justice Framework to State Regulation of Electricity Markets

Energy justice considerations will most frequently be addressed at the state level by legislatures and ratemaking entities. The authority and structure of such entities will differ across states, but many will face similar questions when designing and implementing energy justice policies. This section outlines some of these questions, but provides neither a comprehensive list nor answers. Rather, this is presented as a starting point for further discussion.

Table 1. Environmental Justice Populations and Energy Assistance-Eligible Households in Boston and Concord, Massachusetts

Who Has Authority to Address Energy Justice Objectives?

Multiple government entities have authority to make decisions or seek action/relief relevant to the electricity system, from legislatures and ratemaking agencies (e.g., departments of public utilities and public utility commissions) to offices of attorneys general. Determining which entity has the authority to make decisions relevant to energy justice involves a jurisdiction-specific analysis. Some general questions to consider, however, include:

  • When is there a need for additional legislation or changes to existing legislation to address energy justice issues?
  • Do ratemaking agencies have the authority to set statewide tariffs or fees, or can they only make such decisions in the context of individual ratemaking cases?
  • When setting policies or approving rates, how much leeway do ratemaking agencies have to consider, or to base their decisions on, issues like energy justice?
  • Can ratemaking agencies investigate or adopt new policies on their own initiative?
  • Which parties, governmental or private, have standing to petition for actions relevant to energy justice or to challenge decisions based on energy justice considerations?

Given the evolution of concepts like energy justice, environmental justice, and climate change, existing sources of authority may support addressing these issues without explicitly referencing current nomenclature. As an example, the Massachusetts Legislature has stated that “affordable electric service should be available to all consumers on reasonable terms and conditions,” and that “electricity bills for low income residents should remain as affordable as possible.”16 Though not using the term, this language gives the Massachusetts DPU authority to consider energy justice, a conclusion supported by judicial precedent confirming that rate classifications can be based on “[a]ny number of factors” beyond cost of service.17

In What Context Are Equitable Impacts Measured?

Equitable impacts of proposed actions are not isolated effects; they occur in complex electricity systems that already include a number of explicit and implicit cost-shifting features and subsidies that flow in multiple directions. As examples:

  • Utility/ratepayer subsidies: Some states require regulated energy utilities to impose a surcharge on customers to fund discounts on low-income customers’ utility bills.18
  • Government/taxpayer subsidies: LIHEAP is an example of federal funding that assists low-income households with heating, cooling, and weatherization expenses.
  • Implicit cost-shifting: Many electric bills include volumetric charges with set transmission and distribution fees even though a person living next to a power plant has a “real” transmission cost less than that for a person whose electricity travels over 100 miles of wires. Because these two customers pay the same price per unit of electricity, the person next to the power plant, who may be a lower-income individual, is subsidizing the costs of the person living farther away. As another example, where electricity is sold at a single rate, there can be a cross-subsidy between consumers with flatter load profiles and those with peakier load profiles.

Contextual analyses of equitable impacts that consider the full range of existing subsidies and cost-shifting features are more complicated; parameters for analyses that are less than holistic may be appropriate, or at least necessary, especially in time-constrained proceedings.

Geographic and temporal limits can also be relevant. For instance, if the environmental benefits of cleaner energy sources are contemplated as part of the energy justice analysis, decisionmakers need to consider the geographic context in which such impacts are measured. As an example, the addition of solar power anywhere may reduce greenhouse gas emissions (assuming other generation is displaced or avoided), but such global benefits are different than the localized benefits of adding solar power directly in a community with poor air quality.

Who Is Protected by Energy Justice Goals?

It may be appropriate for energy justice policies to protect consumers beyond those that actually receive some form of subsidy on their electric bills. For instance, LIHEAP is not an entitlement program; there is no legal mandate to provide benefits to all eligible households, funding fluctuates, and assistance often reaches only a portion of eligible households. Even when funding is available, not all eligible customers take advantage of discounted residential electricity rates. Energy policies could instead be designed to protect all consumers or households eligible for financial assistance.

However, eligibility criteria for subsidies and other forms of financial assistance vary both within and across programs; there is no single set of participation requirements or income thresholds. Assistance may be targeted to individuals with defined incomes, fixed incomes, and/or specific characteristics (e.g., senior citizens, families with young children, and individuals who have a serious illness or require the use of medical devices). Given the occurring and projected rising number of extreme heat days, it may be necessary, particularly in states where air-conditioning use has historically been low, to expand hardship classifications to include more individuals with heat-related illnesses. How protected populations are defined can impact the scope and cost of equity-driven decisions.

What Information Is Necessary to Evaluate Energy Justice Impacts?

As is often the case when considering electricity system proposals, the information needed for energy justice analyses varies based on the issue under consideration. At times, such analyses will raise questions in rate- or utility-specific proceedings that are often associated with more widely applicable policy discussions. As an example, consider an energy justice analysis for a proposal to implement time-varying rates (TVRs) with either an opt-out or opt-in approach. If the installation of smart meters is tied to decisions about participating in TVR programs, then questions arise as to who makes the opt-out/opt-in decision, and if it is an opt-in program, who pays for the meters. Examples might include:

  • In a rental property, is the opt-in/opt-out decision made by the landlord or the individual tenants19
  • Will landlords be required to install submeters?
  • If an opt-in TVR program charges participants for the smart meters, will tenants or landlords pay for the meters?
  • If the tenant pays for the smart meter installation, what happens to the smart meter when the tenant moves?
  • Would the cost of a meter prohibit participation by low-income consumers and, if so, could the cost be paid over time through savings in energy bills?

Additional information may be needed to design programs that optimize equitable outcomes. With respect to TVRs, although pilot studies continue to be performed, the impacts of TVRs on low-income consumers are not fully understood. Striking the right balance between giving low-income consumers access to the benefits of TVRs and protecting them from high peak costs will not be easy (and there is unlikely to be an approach that uniformly affects all consumers). But regulators should consider innovative strategies to allow those low-income consumers who can benefit from TVRs to do so, while protecting those who would be hurt by TVRs from significant increases in their energy burdens.

Simply carving low-income consumers out of TVR programs would be too blunt a tool and leave potential benefits on the table. Hybrid solutions might entail:

  • Providing exemptions from opt-out programs for particularly vulnerable populations (e.g., individuals dependent on medical equipment that requires electricity), and offering them an opt-in TVR program instead; or
  • Conducting “shadow billings” that allow customers to see the impact TVRs would have on their bills before the TVRs are actually applied. This would give consumers an opportunity to test their ability to respond to TVRs.

Outreach and education will strengthen realization of benefits from new programs such as these. Adaptive and iterative management of electricity systems that is open to innovation and integrates flexibility into traditionally longer-term capital planning will support achievement of energy justice goals.

Conclusion

Whether or not defined as such, the concept of energy justice is not new, but as an analytical tool it is less common than environmental justice analyses. Adopting systemic frameworks for energy justice, and consistently evaluating electricity market decisions from an equity perspective, will support the evolution of electricity markets that meet societal goals of fairness and affordability.

Taken individually, many initial steps in grid modernization and other proceedings may not have a disproportionate impact on low-income consumers. For example, adding advanced sensors and meters or data analysis capacity should have proportional cost impacts if installed uniformly. But smart meters that support the implementation of TVRs could result in rate structures with higher basic service prices, or more risk of price volatility, that may disproportionately impact low-income consumers. Thus, energy justice analyses should consider the impact not only of specific actions or investments, but also the outcomes that these investments lead to or support. TEF

1. See, e.g., Massachusetts Department of Public Utilities, Anticipated Policy Framework for Time Varying Rates (June 12, 2014) (D.P.U. 14-04-B) (“the Department is mindful of the concerns raised on behalf of low-income customers and others who are unable to shift a significant portion of their consumption due to extraordinary circumstances, such as medical equipment requirements”).

2. Such goals include ensuring grid safety and reliability, providing universal access to affordable electricity, and reducing greenhouse gas and other emissions from the generation and distribution of electricity.

3. Rental households also experience higher energy burdens. See, e.g., Ariel Drehobl & Lauren Ross, American Council for an Energy-Efficient Economy, Lifting the High Energy Burden in America’s Largest Cities: How Energy Efficiency Can Improve Low Income and Underserved Communities 12 (2016).

4. Id. at 3-6. Other studies suggest a more drastic difference.

5. See, e.g., Meg Power, Economic Opportunity Studies, The Burden of FY 2008 Residential Energy Bills on Low-Income Consumers 5 (2008) (reporting energy burdens of nearly 40% for certain low-income consumers in New England), available at http://www.opportunitystudies.org/repository/File/energy_affordability/Forecast_
Burdens_08.pdf. This report is a snapshot in time; the percent of income spent on energy costs will vary based on factors such as temperatures, energy costs, and average incomes.

6. See, e.g., Diana Hernandez & Stephen Bird, Energy Burden and the Need for Integrated Low-Income Housing and Energy Policy, 2 Poverty & Pub. Pol’y 4, 7-8 (2010).

7. Lauren Smith et al., Child Health Impact Working Group (Boston Medical Center), Unhealthy Consequences: Energy Costs and Child Health 2-3 (2007), available at http://www.hiaguide.org/sites/default/files/ChildHIAofenergycostsandchildhealth.pdf.

8. See, e.g., Hernandez & Bird, supra note 6, at 8 (finding that children in families with high energy burdens are exposed to “nutritional deficiencies, higher risks of burns from non-conventional heating sources, higher risks for cognitive and developmental behavior deficiencies, and increased incidences of carbon monoxide poisoning”).

9. Petition of the Low-Income Weatherization and Fuel Assistance Program Network to Apply G.L. c. 164, sec. 141 (Nov. 17, 2015).

10. This is a simplified summary of net metering arguments, provided for illustrative as opposed to analytical purposes.

11. This concern was raised in interviews that Harvard Law School’s Emmett Environmental Law and Policy Clinic conducted with environmental and energy nonprofit organizations.

12. Experience with environmental justice laws and policies suggests that the procedural components of equity initiatives, such as enhanced outreach and participation, are often easier to address than the substantive components. There are, for instance, fewer benchmarks to determine what type of review or actions are sufficient to implement a substantive environmental justice objective such as equal protection.

13. The origins of environmental justice can be seen in the civil rights movement in the 1960s and 1970s, but its roots as a separate movement are often traced back to the early 1980s, when a siting dispute over a hazardous waste landfill in a minority community in North Carolina brought attention to the issue. The momentum generated by the protests in North Carolina built, in part, on two prior federal actions. The first was the passage in 1964 of the Civil Rights Act, which prohibits using federal funds in a way that discriminates based on race, color, and national origin. The second was a 1970 study finding that lead poisoning was disproportionately impacting African American and Hispanic children. In response to this and other studies showing disproportionate exposures to environmental burdens and associated health risks, environmental justice policies sought, and continue to seek, increased procedural and substantive review requirements for the siting and permitting of projects in or near groups or areas defined as environmental justice populations or neighborhoods. See, e.g., Alice Kaswan, Environmental Justice and Environmental Law, 24 Fordham Envtl. L. Rev. 149, 158 (2013); Maryland Department of the Environment, What Is Environmental Justice?, http://mde.maryland.gov/programs/Crossmedia/EnvironmentalJustice/Pages/WhatisEJ.aspx (last visited Aug. 29, 2017).

14. The federal government as well as all states and the District of Columbia have “some type of environmental justice law, executive order, or policy,” and states “continue to innovate in tackling environmental justice issues and the range of approaches is growing, showing that this area of law and policy continues to mature.” See Robert D. Bullard et al., Texas Southern University, Environmental Justice Milestones and Accomplishments: 1964-2014 (2014); American Bar Association & Hastings College of the Law, Environmental Justice for All: A Fifty State Survey of Legislation, Policies, and Cases (Steven Bonorris ed., 4th ed. 2010).

15. See, e.g., Exec. Order No. 12898, 59 Fed. Reg. 7629 (Feb. 16, 1994), Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, available at https://www.archives.gov/files/federal-register/executive-orders/pdf/12898.pdf (directing federal agencies to ensure that programs, policies, and activities that substantially affect human health or the environment are conducted so as not to exclude participation or deny benefits to people and populations because of their race, color, or national origin); Massachusetts Executive Office of Energy and Environmental Affairs, Environmental Justice Policy (2017), available at http://www.mass.gov/eea/docs/eea/ej/2017-environmental-justice-policy.pdf (defining environmental justice populations at the neighborhood level by reference to income levels and percentages of minority or “English Isolation” residents).

16. Massachusetts Legislature, ch. 164 of the Acts of 1997, An Act Relative to Restructuring the Electric Utility Industry in the Commonwealth, Regulating the Provision of Electricity and Other Services, and Promoting Enhanced Consumer Protections Therein, §1(b) and (n) (Nov. 25, 1997).

17. See, e.g., American Hoechest Corp. v. Department of Pub. Utils., 379 Mass. 408, 411-12 (Mass. 1980) (“It is ‘axiomatic in ratemaking’ that ‘different treatment for different classes of customers, reasonably classified, is not unlawful discrimination.’”) (internal citations omitted).

18. See, e.g., Mass. Gen. Laws ch. 164, §1F(4)(i) (2017).

19. Consideration of tenants is relevant from an energy justice perspective because low-income consumers are more likely to be renters.

ENVIRONMENTAL LAW REPORTER ❧ What it means and how to integrate it into state regulation of electricity markets.

Climate Justice
Author
Josephine Balzac - Rollins College
Rollins College
Current Issue
July-August 2018
Issue
4
Climate Justice

People of conscience need to break their ties . . . it makes no sense to invest in companies that undermine our future.

—Desmond Tutu

The perpetuation of business as usual in the climate change era endangers the future of human existence and, consequently, imperils the realization of human rights.1 The recent signing and adoption of the Paris Agreement signifies a global consensus that climate change is an urgent threat and common concern of humankind that needs ambitious mitigation and adaptation efforts to solve the problem.2 The Agreement requires holding the increase in global temperature to well below 2°C while pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.3 The Paris Agreement is undergirded by principles of equity, common but differentiated responsibilities, sustainable development, and poverty eradication.4

Protecting the environment and eradicating poverty are an “indispensable requirement and integral part of achieving sustainable development.”5 Sustainable development incorporates three components: environmental protection, social development, and economic development. On January 1, 2016, the 17 Sustainable Development Goals of the 2030 Agenda for Sustainable Development officially became effective.6 The goals include women’s rights, eradicating poverty, climate action, food security, environmental protection, health, education, equality, and job opportunities.7 The Sustainable Development Goals promote equitable economic growth, equitable social development, and integrated and sustainable management of natural resources and ecosystems.8

Sustainable development is rooted in equitably meeting the developmental and environmental needs of present and future generations.9 This concept of intergenerational equity was first emphasized in the Stockholm Declaration preamble, stating that “[t]o defend and improve the human environment for present and future generations has become an imperative goal of humankind.”10 Furthermore, the United Nations Framework Convention on Climate Change (UNFCCC) requires countries to protect the climate system for the benefit of present and future generations of humankind on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities.11

Viewing the scientific evidence and impacts of climate change through a human rights lens, climate change impacts endanger the effective enjoyment of a range of human rights. The connection between human rights and climate change has been recognized by the United Nations in a variety of documents by the Human Rights Council and the Office of the High Commissioner for Human Rights.12 In 2000, at the UNFCCC Sixth Conference of the Parties (COP6), the summit’s mission stated: “We affirm that climate change is a rights issue. It affects our livelihoods, our health, our children and our natural resources.”

The Mary Robinson Foundation is a leading climate justice organization that seeks to put justice and equity at the heart of climate change responses and identifies the strong connection between human rights and climate change.13 In its Principles of Climate Justice, the Foundation observed that “[c]limate justice links human rights and development to achieve a human-centered approach safeguarding the rights of the most vulnerable and sharing the burdens and benefits of climate change and its resolution equitably and fairly.”14 The climate “injustice” is that the people most vulnerable and marginalized are the ones that have had little to do with generating the greenhouse gas (GHG) emissions that cause climate change. Climate justice affirms the need to significantly reduce the emission of GHGs and associated local pollutants.15 The Bali Principles identified the 27 principles of climate justice.16

The business community is now recognizing this connection between human rights and climate change.17 Businesses play a role in addressing climate change impacts on human rights.18 Until recently, businesses addressed these two subjects independently of the other. Due to the growing awareness and recognition of the nexus between the two, however, businesses are now addressing climate change and human rights concerns holistically.19 Recent actions in the business and investment sectors reflect a new focus on protecting human rights in the face of climate change impacts.

This heightened awareness of climate change has inspired various institutional investors to divest from fossil fuels.20 Investors have embraced the same thinking by pushing for a new sustainable energy economy with socially and environmentally responsible investments.21 This fossil fuel divestment and investment in sustainable and socially responsible businesses will become a powerful driver of change.22 This transition will promote climate justice by taking a human-centered approach to climate change and safeguarding the rights of present and future generations in the investment decisionmaking process.

This chapter examines the ethical motivations behind the movement to divest from dirty energy in order to protect our planet and present and future generations. Part I of this chapter discusses the moral origins of the fossil fuel divestment movement, the litigation that has ensued, and the movement’s reach beyond its college campus origins. Part II identifies the sustainable business model through a corporate social responsibility (CSR) framework and discusses how CSR voluntary initiatives undertaken by companies can help promote climate justice. It addresses how climate change impacts are driving responsible investments and prompting investors to consider environmental, social, and governance criteria in the investment decisionmaking process.

The Fossil Fuel Divestment Movement

Movements seeking ecological equity for future generations and rights of nature have been gaining momentum in the 21st century.23 Divestment is a social responsibility campaign in which owners can decide to withhold their capital by selling investments in reprehensible activity.24 It is the process of removing investments that are unethical or morally ambiguous.25 Divesting is a form of social investing, defined as “the systematic incorporation of ethical values and objectives in the investment decision-making process.”26 The objective of divestment is to promote a certain behavior or policy.27

In the 20th century, reprehensible activity subject to divestment campaigns included tobacco, munitions, corporations in apartheid South Africa, adult services, and gaming.28 These divestment campaigns have been successful, but the largest and most impactful was the South African apartheid context.29 Divesting in multinationals doing business in South Africa helped break the back of the apartheid government and usher in a new era of democracy and equality.30 The success of this campaign is the inspiration for the current fossil fuel divestment movement.31

The fossil fuel divestment movement has quickly become the fastest growing divestment corporate campaign in history, surpassing the South Africa apartheid divestment movement.32 The spark began in August 2012 when Rolling Stone Magazine published an article by Bill McKibben, founder of the organization 350.org, which detailed the risk of increasing the global temperatures above 2°C.33 A tour called Do the Math was launched by 350.org explaining the need to limit the release of fossil fuels and keep the fossil fuels in the ground.34 The tour led to the 350.org Fossil Free Divesture Movement, “a network of independent campaigns petitioning institutions and investors to divest from fossil fuels.”35

The first major victory was in May 2014 when Stanford University agreed to divest its $18.7 billion endowment from coal companies.36 By December 2015, 500 institutions representing $3.4 trillion in assets committed to divesting.37

Moral Dimensions of the Fossil Fuel Divestment Movement

The fossil fuel divestment campaign focuses on the moral dimensions of climate change by spotlighting the immoral actions and impacts of the polluting fossil fuel industry.38 It is a climate justice initiative that seeks to stand in solidarity with vulnerable frontline communities and those already experiencing the impacts of climate change.39 The students of the campaign make a further plea that their futures are at stake because they are inheriting the consequences of global warming beyond 2°C.40 They emphasize the injustice in this reality because they did not create the crisis but have a responsibility to fix it.41 This intergenerational equity focus of the campaign seeks to ensure that future generations are not worse off by our choices.42 It requires utilizing resources sustainably to avoid irreversible damage to the environment.43

The movement focuses on “living up to our values, changing the business as usual mentality, and redefining our future.”44 Our values as humans are what determine how we will behave in certain situations.45 In order to have integrity, there must be consistency in what we say we value and what our actions say we value.46 Ethical decisions involve self-restraint: (1) not doing what you have the power to do and (2) not doing what you have the right to do.47

The goal of divesting from fossil fuels is to “diminish the influence and power of the fossil fuel industry in the market, our political system, and in the social conscience overall.”48 Fossil fuel divestment has three aims:

(i) “force the hand” of the fossil fuel companies and pressure government to leave the fossil fuels “down there”; (ii) pressure fossil fuel companies to undergo “transformative change” that can cause a drastic reduction in carbon emissions; [and] (iii) pressure governments to enact legislation such as a ban on further drilling or a carbon tax.49

It demands institutions and investors to eradicate the environmental and social injustices created by “dirty energy” by adopting sustainable investment policies.50

The Bali Principles on Climate Justice intended to shift “the discursive framework of climate change from a scientific-technical debate to one about ethics focused on human rights and justice.”51 “Divesting is a form of social investing . . . incorporating ethical values and objectives in the investment decision making process.”52 The campaign is not just to fight climate change “but to fight the racism, classism, and imperialism that the fossil fuel industries perpetuate.”53 This future generation is shifting the way of thinking “business as usual” and propelling change. This shift is necessary to change these social and political realities and have a meaningful response to climate change impacts on the environment and human rights.54

College Campus Future Generations Lead Divestment Campaigns

The Fossil Free Divestment Movement mobilized and trained thousands of students and young people to organize against the threats of climate change.55 Social movements use confrontational strategies, including media protests, to emphasize the negative social and environmental practices of highly visible corporations.56 With social media commanding the public’s attention, these corporations realize they are not immune to “naming and shaming” strategies when their valuable brands and reputation are linked to objectionable and social practices.57 Social movements have emerged as key forces in mobilizing political consumers to address their concerns through the market.58

The students are demanding full divestment of fossil fuels and are doing it in the name of “climate justice.” Students and graduates are making campaign pledges such as: “[M]illennials, we must rise to our historic moment and lead the call for climate justice. This is truly the fight of our lives.”; “[W]e will not stop until we confront, dismantle and ultimately transform oppressive structures that perpetuate climate injustice, gender violence, and economic equality”; and “[B]ecause I want a more just and sustainable world that protects humanity over profits, environment over exploitation.”59 The “fossil fuel divestment [movement] is a moral campaign at its core.”60 In an open publication, Divest Harvard students criticized the Harvard Management Company (HMC) for betraying its moral obligations to its students by investing new capital in oil and gas exploration and refusing to divest.61

Most of the divestments to which colleges, universities, or schools have committed are only partial, such as only divesting in coal or tar sands, and are mostly from smaller private colleges.62 Students are being advocates by writing and signing petitions, scheduling meetings, and conducting protests, week-long blockades, and sit-ins.63

Recently, this type of social activism generated real change on a university campus. On May 25, 2016, the University of Massachusetts became the first major public university to fully divest its endowment from fossil fuels.64 Divestment of coal at UMass first began last year in response to a petition from the Student Fossil Fuel Divestment Campaign at UMass.65 In April 2016, in efforts to call for full divestment of fossil fuels, the Campaign staged a series of protests that led to student arrests at UMass Amherst.66 This student activism resulted in a unanimous decision by the board of directors of the UMass Foundation to fully divest from fossil fuels.67 The board of trustees chairman stated that he will endorse the Foundation’s decision, “because members of the UMass community have urged us to consider divestment in moral terms . . . and we acknowledge the moral imperative.”68 The UMass Amherst chancellor stated in regards to the decision to divest, “[T]he Foundation’s action today . . . speaks volumes about our students’ passionate commitment to social justice and the environment. It is largely due to their advocacy that this important issue has received the attention that it deserves.”69

Although the divestment movement started on university campuses, it has spread beyond campuses and reached diverse institutions and cities throughout the world.70 Of the more than 500 institutions divesting, only 13% are universities, colleges, and schools.71 Other institutions divesting include faith-based organizations (26%), foundations (24%), governmental agencies (14%), pension funds (13%), nongovernmental organizations (6%), and for-profit corporations (3%).72

More than 70 cities worldwide have divested from fossil fuels, including Oslo, Norway; Paris, France; Newcastle, Australia; Muenster, Germany; Copenhagen, Denmark; San Francisco, California; Boulder, Colorado; and Minneapolis, Minnesota.73 In addition, Stockholm, Sweden, and Berlin, Germany, are reviewing their fossil fuel investments.74 Copenhagen’s mayor stated in his proposal to divest that it would be wrong to continue investing in fossil fuels when Copenhagen is leading the world in the transition to a green economy.75 Similarly, in deciding to divest from fossil fuels, the UMass board of trustees chairman shared a similar vision in stating, “[D]ivestment from fossil fuel companies is in keeping with our status as a national leader in environmental sustainability with cutting-edge programs in alternative energy research, sustainable agriculture, and sustainable built environment.”76 The decisionmakers deciding to divest are recognizing that their investments must align with their values to convey the proper message and uphold integrity in promoting their goals.

Fossil Fuel Divestment Litigation

Social activism in the fossil fuel divestment movement has been taken to the courts, as students demand climate justice.77 The litigation arose out of Harvard students’ frustration with the university’s refusal to divest from fossil fuels after demanding divestment from the university endowment through their campaigns and petitions.78 The students decided to take their advocacy to another level.

On November 19, 2014, the Harvard Climate Justice Coalition filed a complaint against the Harvard president and fellows of Harvard College, the HMC, and the attorney general of Massachusetts.79 The plaintiffs are a group of seven students, consisting of law, graduate, and undergraduate students.80 The students are bringing this suit seeking climate justice on behalf of future generations.81 The complaint names “individuals not yet born or too young to assert their rights but whose future health, safety, and welfare depend on slowing the pace of climate change.”82

The innovative causes of action listed in the complaint are twofold: (1) mismanagement of charitable funds and (2) intentional investment in abnormally dangerous activity.83 The statement of facts describes the vesting of responsibility in the “President and Fellows” by the charter of the Harvard Corporation to further the goals of “the advancement and education of youth.”84 They are suing the attorney general of Massachusetts by citing the duty of Massachusetts “‘legislatures and magistrates’ to ensure the charitable operation of schools . . . [by] acting in the public interest, furthering the education and welfare of the students, and refraining from actions known to cause harm to the public and students.”85

The lawsuit identified $79 million in direct holdings in publicly traded fossil fuel companies in Harvard’s endowment.86 The endowment also contains additional indirect holdings in fossil fuels, but the amount is not listed.87 The plaintiffs connect investing in fossil fuels with creating environmental and social harms because the universities are helping finance the fossil fuel industry’s business activities.88 The complaint identifies the catastrophic consequences that endanger the health, safety, and welfare of present and future generations if businesses continue to burn fossil fuels and emit GHGs.89The complaint is supported by significant evidence labeled as exhibits, including reports from scientists (James Hansen) and international organizations (the Intergovernmental Panel on Climate Change), federal agencies (U.S. Environmental Protection Agency), Harvard’s U.S. Securities and Exchange Commission (SEC) filing, Harvard’s charter, the Massachusetts Constitution, news articles, and academic studies.90

The mismanagement of charitable funds cause of action stems from Harvard Corporation’s breach of fiduciary and charitable duties as a public charity and nonprofit.91 The complaint asserts that investing in fossil fuels damages Harvard’s reputation, and the students’ and graduates’ reputations.92 The students are unable to be free of the threats of climate change, and the future damage to the university’s physical campus as a result of sea-level rise.93 The second count—intentional investment in abnormally dangerous activities—identifies the fossil fuel industries’ business activities as abnormally dangerous “because they inevitably contribute to climate change, causing serious harm to Plaintiff’s Future Generations’ persons and property.”94 The argument continues that there is no amount of reasonable care that can be taken by a fossil fuel company to substantially reduce the risk of harm.95 The complaint alleges that Harvard has knowledge or should have known that fossil fuel companies contribute to climate change and cause harm, and that these harms are well understood among institutions of higher education.96

The Harvard Climate Justice Coalition complaint requests “an injunction ordering Defendants to immediately withdraw Defendant Harvard Corporation’s direct holdings in fossil fuel companies and an injunction for Defendants to take immediate steps to begin withdrawing indirect holdings and to complete withdrawal within a reasonable period of time.”97 The plaintiffs also request a declaration that Harvard breached its obligations contained in its charter.98

The plaintiffs acknowledged the difficulty of meeting the “special interest” requirement to have standing to sue.99 The lawsuit was ultimately dismissed on the ground that the plaintiffs lacked standing because they claimed the threat was to “future generations.”100 The court reasoned that the plaintiffs’ status as Harvard students did not give them personal rights enough to have standing to charge Harvard with the mismanagement of its charitable assets.101

The Harvard students appealed the dismissal of the divestment lawsuit.102 The appellate brief was supported by amicus curiae briefs by Dr. James E. Hansen and the Animal Legal Defense Fund.103 The brief from the Animal Legal Defense Fund supported the moral obligation for the protection of future generations, as a recognized principle in international and domestic law.104 The city of Cambridge, Massachusetts, also supported the lawsuit.105 Dr. Hansen’s amicus brief also cites the moral obligation to protect future generations by phasing out fossil fuels.106 The appeal focuses on the same arguments that Harvard mismanaged its endowment by investing in “abnormally dangerous activities.”107 On June 7, 2016, the Harvard Climate Justice Coalition appeared for oral arguments in the Massachusetts Appeals Court and the appeal is pending as of this writing.108

Even in the face of this social activism and litigation, the HMC still decided not to divest but instead became the first university endowment in the United States to join the Principles for Responsible Investment (PRI) and the Carbon Disclosure Project (CDP).109 The HMC has dedicated a web page to their sustainable investments, reporting their focus on investments based on environmental, social, and governance (ESG) factors.110 The HMC assesses and manages ESG risks, and documents and considers risk before making a decision on the investment.111 The faculty members in support of divestment responded by saying that the PRI and CDP are “utterly ineffective.”112 These voluntary measures are not as effective in mitigating climate change as mandatory legal standards or full divestment; however, in lieu of full divestment, these initiatives can be seen as steps in the right direction toward a more sustainable future within businesses. If the intent behind the initiative is purely for public relations reasons, however, it would be deemed to be merely “greenwashing.”113 A sustainable business model “should not be a discretionary preference, to follow only if corporate leaders perceive an economic benefit.”114 What is necessary is the acceptance of an ethical responsibility to do what is right and act for environmental and social well-being, regardless of financial gain.115

Corporate Social Responsibility and Responsible Investment

Divestment of fossil fuels is promoting climate justice by bringing awareness to the moral obligation of corporations, wealth owners, and investors, and to the duty to protect the interest of society, future generations, and the environment. The campaign creates stigma and advocates for more socially responsible investment practices. Divestment of fossil fuels is the “people demanding institutions and corporations to adopt comprehensive sustainable investment policies that eliminate the environmental and social injustices that the fossil fuel industry is creating.”116 Climate justice will be achieved not just by divesting from fossil fuels, but also by businesses incorporating sustainable policies, practices, and standards into everyday business activities. Since divestment is the opposite of investment, sustainable and socially responsible investments are also needed to promote climate justice.

Achieving a sustainable future does not occur in a vacuum, however. Although often the primary source of environmental pollution, business must be part of the long-term solution.117 Compared to government, business has greater capital, research, development capacity, and influence in the market to push towards sustainable development and climate justice.118 The United Nations acknowledged the significant role of business in mitigating and adapting to climate change.119 Caring for Climate is a joint initiative convened by the United Nations Global Compact, the United Nations Environment Programme (UNEP), and UNFCCC and recognizes that “only through a critical mass of engaged companies can the private sector be an effective part of the climate solution.”120 The initiative calls on all companies to commit to corporate responsibility policies on climate action.121

Since the Earth Summit in 1992, the field of CSR has evolved to become part of mainstream thinking in corporate compliance with environmental and human rights principles.122 CSR is premised on the idea that businesses have a responsibility to society and all its stakeholders, not just to their shareholders or their bottom line profits.123 The World Business Council for Sustainable Development defines CSR as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.”124 CSR encompasses the sustainability agenda by thinking in terms of the “triple bottom line,” focusing on economic prosperity, environmental quality, and social justice.125 John Elkington wrote, “[t]o refuse the challenge implied by the triple bottom line is to risk extinction.”126 This shift in thinking for business priorities stems from a reshaping of society’s expectations.127

The severe financial crisis and climate change risks have underscored the need for businesses to incorporate ESG factors into their financial statements, policies, and disclosures.128 Businesses feel pressure from all stakeholders, customers, investors, financial institutions, and shareholders.129 Lenders and investors, of course, want the best return on their investments with the least amount of risks.130 Moreover, investors today understand that financial success and good corporate citizenship are connected.131

Therefore, investing in fossil fuels is a risky business not only because of the financial risks, but also because of the environmental and social risks. Al Gore made a comparison of the risks of investing in fossil fuels to the meltdown in the market for subprime mortgages: “The assumption that you can safely invest in assets that come from business models that assume carbon is free is an assumption that is about to go splat. Many companies have lots of assets in your portfolios that are chock full of ‘subprime’ carbon assets.”132

ESG issues have a material impact on those risks and fulfill fiduciary duties.133 These ESG practices and considerations are evident across the spectrum of business entities including financial institutions, institutional investors, individual investors, corporations engaging in CSR practices, and consumers. CSR and ESG performance, monitoring, and improvement provide the greater transparency that all sectors are demanding.134 After the financial crisis and the looming threat of climate change, consumers, investors, stakeholders, and suppliers are demanding greater transparency.135 This pressure caused an increase in CSR reporting to publicize companies’ ESG data.136

Corporate Social Responsibility Reporting and Disclosures

It is becoming the norm in corporate practice to submit sustainability reports or CSR reports using at least one voluntary initiative.137 CSR disclosure focuses on the paradigm of sustainability reporting, with the information reported being relative to the triple bottom line of social, environmental, and economic impacts of a corporation’s activities.138 Executives are now considering the environmental issues, such as climate change, to be among the most important issues affecting business.139 The Governance and Accountability Institute reported that in 2015, 75% of the Standard & Poor’s 500 Index produced sustainability reports, an increase from 20% in 2011.140

There are many voluntary initiatives and providers of CSR reporting, but the major providers offering sustainability reporting include: the Global Reporting Initiative (GRI) (GRI’s Sustainability Reporting Standards), the Organisation for Economic Co-operation and Development (OECD) (OECD Guidelines for Multinational Enterprises), the United Nations Global Compact (the Communication on Progress), the International Organization for Standardization (ISO) (ISO 26000, International Standard for social responsibility), and the Carbon Disclosure Project.141 The GRI is the best example of the CSR reporting trends.142 It was launched in 1997 by the Coalition for Environmentally Responsible Economies (CERES)143 and it included the participation of organizations such as CEP, UNEP, and the World Business Council for Sustainable Development.144 The GRI’s mission is “to elevate the comparability and credibility of sustainability reporting practices worldwide.”145 Currently, 92% of the 250 largest corporations in the world report on their sustainability performance utilizing the GRI.146 The GRI’s goal is to make sustainability reporting as commonplace as financial reporting.147

True sustainability reporting allows for greater transparency into corporate practices that either achieve CSR or impede its achievement. Sustainability reporting is valuable because it ensures that the organizations reporting consider their impacts on environmental and social issues and allows them to be transparent about the risks and opportunities that they encounter.148 A trusting relationship amongst stakeholders is necessary to receive good support.149 Transparency builds and maintains trust and credibility150 in businesses because it shows honesty, openness, and self-criticism.151 CSR reporting on ESG issues promotes better decisionmaking because it informs the decisions of investors, consumers, local communities, and civil society.152 Reporting in a transparent manner is an essential part of committing to sustainability.153

Businesses need to make sure that they report the good, the bad, and the ugly of their companies. Voluntary self-reporting can tempt companies to only reveal the greatest achievements and omit negative information.154 This type of reporting is seen as greenwashing and is only concerned with image and not with accurate reporting.155 This practice causes distrust in stakeholders because they fear a cover up and, therefore, are unable to be fully informed of the risks and benefits of the company.156 To avoid creating suspicion, companies should report achievements and weaknesses and identify the steps to fix the problems.157

International Voluntary ESG and CSR Initiatives

The growing public awareness of environmental performance is driving companies to adopt voluntary or self-imposed standards, guidelines, and codes.158Those supporting ESG and CSR considerations in any sector must rely on international voluntary corporate standards because transnational corporate activities are minimally governed by international law.159 These voluntary standards or initiatives usually do not have any verification methods or enforcement measures.160 The only enforcement mechanism available is to “name and shame” the companies that fail to meet these standards.161 These standards also lack explicit performance benchmarks.162 Some companies become signatories to these third-party initiatives committing to standards and codes of conducts to improve their public image.163 Others view these initiatives as attempts to prevent more stringent regulations through preemptive measures by the market.164 Others do it out of a commitment to true sustainability. Although there is no substitute for legally binding standards, these voluntary initiatives signify a change of consciousness, a change in values, a change in priorities, and a commitment across the globe to create a more sustainable and just future for our present and future generations in the face of climate change. The “business as usual” model is no longer mainstream, it is no longer popular, and the market has responded.

CSR voluntary corporate codes of conduct are becoming the norm as companies want to convey their core values and ethical business practices to all stakeholders. This shift in thinking to employ CSR has caused an increase in the majority of corporations dedicated to addressing larger social problems.165 The United Nations Global Compact is the world’s largest voluntary corporate sustainability initiative.166 More than 8,000 companies and 4,000 non-businesses have become signatories to the compact.167 The mission of the compact is for businesses to be responsible by aligning their strategies and operations with principles on human rights, labor, environment, and anti-corruption.168 The United Nations Global Compact’s General Assembly mandate is to “promote responsible business practices and UN values among the global business community and the UN System.”169

The 10 principles of the United Nations Global Compact are derived from the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption.170 The Compact principles have been endorsed by the Human Rights Council, which has confirmed the interconnectedness between climate change and human rights.171 The Global Compact institutes these principles as the core values to be shared among businesses, trade unions, and civil society.172 The United Nations Guiding Principles on Human Rights have been incorporated into the Compact commitments for the past four years.173 The Compact requires businesses to make a policy commitment to respect human rights and take proactive steps to prevent violations and remediate any adverse human rights impacts.174

Commitments to the Compact also include taking action to advance societal goals, such as the United Nations Sustainable Development Goals 2030.175 Through the Global Compact, businesses have played an important role in the process of shaping the Sustainable Development Goals and helping companies implement them.176 The efforts through partnerships created by the Compact include the Post-2015 Business Engagement Architecture, Rio+20 Corporate Sustainability Forum, Global Compact Local Networks, SDG Industry Matrix, Caring for Climate, and Global Compact LEAD.177

Opportunities for Responsible Investment

While CSR reporting has been on the rise within corporations, investors have been able to use this information to determine in which sectors of the stock market they want to invest. Socially responsible investing (SRI) is “an investment discipline that considers environmental, social, and governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.”178 The motivations for SRI investing include personal goals, institutional missions, and the demands of clients and stakeholders.179 Investors also are seeking strong financial performance in their investments to contribute to advancement in ESG practices.180 SRI allows investors to match financial investments with ethical and moral values.181 These SRI investments focus on considering ESG criteria.182 SRI investments were more than $6.57 trillion in 2014, a 76% increase compared to 2012 figures.183

The SRI practice used to focus on weeding out companies from specific industries that investors did not want to support, such as natural resource extraction and nuclear energy.184 This approach is a negative screen; positive screens focus on promoting positive change and rewarding good behavior by investing in companies that promote positive social and environmental impacts.185 This section discusses three important SRI opportunities to promote climate justice.

United Nations Principles for Responsible Investment: The United Nations Principles for Responsible Investment (PRI) is a voluntary set of guidelines for investors that seek to combine financial return with a moral and ethical obligation by giving consideration to the ESG issues of companies in which parties choose to invest.186 Ethical values are the essence of climate justice and instilling these principles into investment decisions allows for greater protection of the rights of vulnerable communities. The goal was to incorporate “ESG issues into mainstream investment decision-making and ownership practices.”187 This momentum is driven by recognizing that ESG factors play a material role in determining risk and return within the financial community.188 Investors understand that part of their fiduciary duty is incorporating ESG factors and that beneficiaries are demanding more transparency.189 Responsible investment is also grounded in the fact that companies could face serious reputational risk by destroying value on environmental (climate change and pollution), social (employee diversity and working conditions), and economic issues (aggressive tax strategies).190 The PRI has nearly 1,500 signatories that represent $60 trillion from more than 50 countries.191

Shareholder Resolutions; An important aspect of SRI is shareholder advocacy. Through shareholder resolutions, investors are given the opportunity to file resolutions to raise ESG issues.192 These resolutions involve human rights, working conditions, and climate change issues.193 In 2007, only 43 climate shareholder resolutions were filed with U.S. companies.194 That number increased in 2009, with 68 shareholder proposals on climate change.195 In the 2015 proxy season, a record-breaking 433 social and environmental shareholder resolutions were filed with climate change as one of the leading drivers of the uptick in activity.196 By filing shareholder resolutions, active shareholders are able to bring important issues to the attention of company management.197 Filing these resolutions gains media attention and educates the public.198 The mere process of filing resolutions prompts productive discussions and agreements, and the receipt of the shareholders’ majority vote further pressures action by the corporation’s management.199

Recently, an Exxon climate justice shareholder resolution, “Acknowledge Moral Imperative to Limit Global Warming to 2° Celsius,” was filed.200 It stated that the poor and most vulnerable are the first to suffer, while future generations, holding no responsibility, will live with greater impacts of global warming.201 Shareholders called on the board of directors to act by adopting a policy acknowledging the imperative to limit global average temperature increases to 2°C above pre-industrial levels.202 Exxon challenged the proposal as “vague” to exclude the climate justice proposal from this year’s proxy ballot so that the shareholders would not be allowed to vote, fearing a majority in favor of the resolution.203 The SEC reviewed the resolution and denied Exxon’s challenge.204 This outcome is a significant victory, as shareholders will have the opportunity to vote on Exxon’s moral responsibilities regarding climate change.205 These moral and ESG considerations are continuing to take center stage in the investment decisionmaking process in seeking to promote climate justice.

Equator Principles ESG Guidelines for Financial Institutions: This framework sets out minimum standards for institutions to implement to ensure due diligence in determining, assessing, and managing environmental and social risks when determining whether to finance projects.206 Financing of the project is conditioned on complying with the Equator Principles (EP). If companies will not or are unable to comply with the EP, then no project finance or project-related corporate loans will be provided.207 Borrowers must categorize and fully disclose environmental and social risks and provide a mitigation plan to manage the risks to obtain loans from these Equator Principles Financial Institutions (EPFIs).208

Currently, 83 EPFIs209 in 36 countries have adopted the EP.210 This number of institutions covers more than 70% of international project finance debt in emerging markets.211 The EPs incorporate principles of climate justice by including comprehensive standards for indigenous peoples and consultation with locally affected communities within the project.212 Borrowers must also disclose to affected communities “a mechanism for addressing grievances, and third-party verified review, monitoring, and annual public reporting.”213 Studies show that after the financial crisis of 2008, only four of the largest financial institutions—Bank of America, Wells Fargo, JP Morgan Chase, and Citibank—survived and they were all signatories to the EPs.214 This outcome is further proof that incorporating ESG principles into lending practices helps manage and identify risks and opportunities.

Conclusion

The impacts of climate change are the biggest threat of our time, imperiling both natural resources and human rights. This connection between climate change and human rights has significantly impacted decisionmaking in financial markets from divesting to investing. Companies, consumers, and investors are prioritizing ESG considerations and responsible business practices. The detrimental impacts of climate change have prompted the recognition that there is an ethical and moral obligation to invest responsibly by choosing to divest from morally reprehensible activities such as fossil fuel extraction.

These actions promote climate justice via the financial investment markets. Investors are recognizing not only the financial incentives of considering ESG factors, but most importantly the ethical need to invest in sustainable and socially responsible companies to protect the needs of present and future generations. Investors now understand and recognize climate change risks and social injustices and do not want to invest in or support companies that are not concerned with their moral duty to be good citizens of the world. The businesses that survive are the ones that have a genuine interest in caring about the people and the planet while also making a profit.

Divesting from fossil fuels and SRI reduces GHG emissions, helps eradicate poverty, promotes sustainability, and protects future generations. Although the actions undertaken are voluntary in nature, they represent an important shift in thinking necessary for a sustainable future. Therefore, these actions promote the goal of climate justice for the most vulnerable communities of the world. TEF

1. Webinar: Business and Climate Justice: What Role Can Business Play in Tackling the Human Rights of Impacts of Climate Change? (U.N. Global Compact and Mary Robinson Foundation 2015), https://www.unglobalcompact.org/library/1231.

2. Adoption of the Paris Agreement, UNFCCC Conference of the Parties, 21st Sess., U.N. Doc. FCCC/CP/2015/10/Add.1 (Dec. 12, 2015), http://unfccc.int/files/home/application/pdf/paris_agreement.pdf.

3. Id.

4. Id.

5. Rio Declaration on Environment and Development, U.N. Conference on Environment and Development, Rio de Janeiro, Brazil, June 3–14, 1992, Annex 1, U.N. Doc. A/CONF.151/26 (Vol. I) (1992), http://www.un.org/documents/ga/conf151/aconf15126-1annex1.htm [hereinafter Rio Declaration].

6. United Nations, The Sustainable Development Agenda, http://www.un.org/sustainabledevelopment/development-agenda/ (last visited Aug. 21, 2016).

7. Id.

8. Id.

9. Rio Declaration, supra note 5, at Annex I, Princ. 3 (noting that the “right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations”).

10. Declaration of the United Nations Conference on the Human Environment, U.N. Conference on the Human Environment, Stockholm, Sweden, June 5–16, 1972, U.N. Doc. A/CONF.48/14 (1972), revised by U.N. Doc. A/CONF.48/14/Corr.1 (1972), reprinted in 11 I.L.M. 1416 (1972); see also David Hunter et al., International Environmental Law and Policy 492 (3d ed. 2007).

11. United Nations Framework Convention on Climate Change, May 9, 1992, 1771 U.N.T.S. 107 (entered into force Mar. 21, 1994).

12. Webinar, supra note 1; see also John H. Knox, U.N. Special Rapporteur, Mapping Report on Climate Change and Human Rights (2014), http://srenvironment.org/wp-content/uploads/2014/08/Climate-Change-mapping-report-15-August-final.docx; United Nations Human Rights Office of the High Commissioner, Key Messages on Human Rights and Climate Change 2 (2015), http://www.ohchr.org/Documents/Issues/ClimateChange/KeyMessages_on_HR_CC.pdf.

13. Mary Robinson Foundation-Climate Justice, Mission and Vision, http://www.mrfcj.org/about/mission-and-vision/ (last visited Aug. 21, 2016).

14. Mary Robinson Foundation-Climate Justice, Principles of Climate Justice (n.d.), http://www.mrfcj.org/pdf/Principles-of-Climate-Justice.pdf.

15. Bali Principles of Climate Justice (2002), http://www.ejnet.org/ej/bali.pdf.

16. Id.

17. Webinar, supra note 1.

18. Id.

19. Id.

20. Divestor.org, Reinvest: Your Home, https://divestor.org/YHreinvesting.html (last visited Aug. 21, 2016).

21. Id.

22. Id.

23. Judith E. Koons, At the Tipping Point: Defining an Earth Jurisprudence for Social and Ecological Justice, 58 Loy. L. Rev. 349, 349 (2012).

24. Atif Ansar et al., Stranded Assets and the Fossil Fuel Divestment Campaign: What Does Divestment Mean for the Valuation of Fossil Fuel Assets? (Smith School of Enterprise and the Environment 2013), http://www.smithschool.ox.ac.uk/research-programmes/stranded-assets/SAP-divestment-report-final.pdf.

25. Fossil Free, What Is Fossil Fuel Divestment?, http://gofossilfree.org/what-is-fossil-fuel-divestment/ (last visited Aug. 21, 2016).

26. Surbhi Sarang, Note, Combating Climate Change Through a Duty to Divest, 49 Colum. J.L. & Soc. Probs. 295, 300 (2016).

27. What Is Fossil Fuel Divestment?, supra note 25.

28. Ansar et al., supra note 24, at 9 (noting that the private wealth owners making the decision to divest typically are university endowments, public pension funds, or their appointed asset managers).

29. What Is Fossil Fuel Divestment?, supra note 25.

30. Id.

31. Ansar et al., supra note 24.

32. Marc Gunther, Why the Fossil Fuel Divestment Movement May Ultimately Win, Yale Env’t 360, July 26, 2015, http://e360.yale.edu/feature/why_the_fossil_fuel_divestment_movement_may_ultimately_win/2898; Desmond Tutu, We Need an Apartheid-Style Boycott to Save the Planet, The Guardian, Apr. 10, 2014, http://www.theguardian.com/commentisfree/2014/apr/10/divest-fossil-fuels-climate-change-keystone-xl.

33. Sarang, supra note 26, at 298.

34. Id.

35. Id. at 299.

36. Id.

37. Fossil Free, Divestment Commitments, http://gofossilfree.org/commitments/ (last visited Aug. 21, 2016).

38. Brett Fleishman, The Decarbonizer and the Moral Case for Divestment, 350, Feb. 5, 2016, https://350.org/the-decarbonizer-and-the-moral-case-for-divestment/.

39. We Are Power Shift, Fossil Fuel Divestment, http://www.wearepowershift.org/campaigns/divest (last visited Aug. 21, 2016).

40. Id.

41. Id.

42. Hunter et al., supra note 10, at 491.

43. Id.

44. Fleishman, supra note 38.

45. Michael Josephson, Making Ethical Decisions 5–6 (Josephson Inst. of Ethics n.d.), http://www.sfjohnson.com/acad/ethics/making_ethical_decisions.pdf.

46. Id.

47. Id. (explaining that an act is not proper simply because it is permissible or you can get away with it. There is a big difference between what you have the right to do and what is right to do.).

48. Fossil Fuel Divestment, supra note 39.

49. Ansar et al., supra note 24.

50. What Is Fossil Fuel Divestment?, supra note 25.

51. Bali Principles of Climate Justice, supra note 15; Robert Cox, Environmental Communication and the Public Sphere 121 (3d. ed. 2013) (citing J. Agyeman et al., The Climate-Justice Link: Communicating Risk With Low-Income and Minority Audiences, in Communicating a Climate for Change: Communicating Climate Change and Facilitating Social Change (S.C. Moser & L. Dillings eds., 2007).

52. Sarang, supra note 26, at 300–01.

53. Fossil Fuel Divestment, supra note 39.

54. Koons, supra note 23, at 351.

55. Fossil Fuel Divestment Student Network, Organizing Pledge Project, http://www.studentsdivest.org/organizing_pledge (last visited Aug. 21, 2016).

56. Carmen Bain & Tamera Dandachi, Governing GMOs: The (Counter) Movement for Mandatory and Voluntary Non-GMO Labels, 6 Sustainability 9456, 9459 (2014).

57. Id.

58. Id.

59. Organizing Pledge Project, supra note 55.

60. 350, In the Space of Just 10 Weeks . . . , https://350.org/in-the-space-of-just-10-weeks/ (last visited Aug. 21, 2016).

61. Open Publication: Divest Harvard Requests Meeting With Stephen Blyth, Divest Harv., Mar. 9, 2016 (stating that “[a]bsent strong action, those of us who are young will likely see some of the world’s great cities begin to be submerged underwater and millions of people displaced or killed by droughts, floods and famines. In our view, this crisis calls for new intergenerational accountability entailing drastic reductions in fossil fuel investment, production, and use.” In order to reach the goal of 2°C, Divest Harvard states that “at least half of current reserves must remain in the ground, and investments in fossil fuel production must decrease considerably”), http://divestharvard.com/updates/.

62. Divestment Commitments, supra note 37.

63. Mariel A. Klein, Student Protesters Appeal Dismissal of Divestment Lawsuit, Harv. Crimson, Oct. 13, 2015, http://www.thecrimson.com/article/2015/10/13/divestment-appeal-lawsuit-dismiss/.

64. Robert P. Connolly, UMass Becomes First Major Public University to Divest From Direct Fossil Fuel Holdings, UMass Amherst, May 25, 2016, http://www.umass.edu/newsoffice/article/umass-becomes-first-major-public.

65. Id.

66. Id.

67. Id.

68. Id.

69. Id.

70. Fossil Fuel Divestment, supra note 39.

71. Divestment Commitments, supra note 37.

72. Id.

73. Fossil Fuel Divestment, supra note 39.

74. Melanie Mattauch, Mayor Wants to Rid Copenhagen of “Totally Wrong” Investments in Coal, Oil, and Gas, Fossil Free, Feb. 3, 2016, http://gofossilfree.org/mayor-wants-to-rid-copenhagen-of-totally-wrong-investments-in-coal-oil-and-gas/; In the Space of Just 10 Weeks, supra note 60.

75. Mattauch, supra note 74.

76. Connolly, supra note 64 (quoting Kumble Subbaswamy, UMass Amherst chancellor).

77. John Schwartz, Harvard Students Move Fossil Fuel Stock Fight to Court, N.Y. Times, Nov. 19, 2014, http://www.nytimes.com/2014/11/20/us/harvard-students-move-fossil-fuel-divestment-fight-to-court.html?ref=us&_r=1.

78. Id.

79. Harvard Complaint (Nov. 19, 2014), http://www.divestproject.org/wp-content/uploads/2014/10/Read-the-Complaint.pdf.

80. Harvard Climate Justice Coalition v. President and Fellows of Harvard College, About The Plaintiffs, http://www.divestproject.org/about-the-plaintiffs/ (last visited Aug. 21, 2016).

81. See Harvard Complaint, supra note 79.

82. Id. para. 2.

83. See id. paras. 41, 63.

84. Id. para. 29.

85. Id. paras. 29–31.

86. Id. para. 32.

87. Id.

88. Id. para. 33.

89. Id. paras. 21–28.

90. Harvard Climate Justice Coalition v. President and Fellows of Harvard College, The Evidence, http://www.divestproject.org/the-evidence/ (last visited Aug. 21 2016).

91. Harvard Complaint, supra note 79, para. 47.

92. Id.

93. Id.

94. Id. para. 66.

95. Id.

96. Id. para. 67.

97. Id.

98. Id.

99. Schwartz, supra note 77.

100. Theodore R. Delwiche & Mariel A Klein, Judge Dismisses Divestment Lawsuit, Harv. Crimson, Mar. 24, 2015, http://www.thecrimson.com/article/2015/3/24/judge-dismisses-divestment-lawsuit/.

101. Id.

102. Klein, supra note 63; Brief for Petitioner-Appellant Harvard Climate Justice Coalition v. President & Fellows of Harvard Coll., No. 2015-P-0905 (Nov. 19 2014), http://www.divestproject.org/wp-content/uploads/2015/10/HCJC-Appellants-Brief.pdf.

103. Klein, supra note 63; Harvard Climate Justice Coalition v. President and Fellows of Harvard College, Court Documents, http://www.divestproject.org/documents-2/ (last visited Aug. 21, 2016).

104. Animal Legal Defense Fund Amicus Brief, 36-9, http://www.divestproject.org/wp-content/uploads/2015/10/ALDF-Amicus.pdf.

105. Klein, supra note 63.

106. Dr. James Hansen Amicus Brief, 2015-P-0905 (Oct. 23, 2015), http://www.divestproject.org/wp-content/uploads/2015/10/Hansen-Amicus.pdf.

107. Klein, supra note 63.

108. Appellant Harvard Climate Justice Coalition v. President & Fellows of Harvard Coll., No. 2015-p-0905, Appeals Court, Full Case Panel Court Docket http://www.ma-appellatecourts.org/search_number.php?dno=2015-P-0905&get=Search (last visited Sept. 20, 2016).

109. Press Release, Harvard, Harvard to Sign on to United Nations-Supported Principles for Responsible Investment (Apr. 7, 2014), http://news.harvard.edu/gazette/story/2014/04/harvard-to-sign-
on-to-united-nations-supported-principles-for-responsible-investment/.

110. Harvard Management Co., Investing for the Long-Term: Integrating ESG Factors, http://www.hmc.harvard.edu/investment-management/sustainable_investment.html (last visited Aug. 21, 2016).

111. Id.

112. The Divestment Debate, Harv. Mag., July–Aug. 2014, http://harvardmagazine.com/2014/07/the-divestment-debate.

113. Thomas P. Lyon & John W. Maxwell, Greenwash: Corporate Environmental Disclosure Under Threat of Audit, 20 J. Econ. Mgmt. Strategy 3, 4 (2011) (defining greenwashing as “the selective disclosure of positive information about a company’s environmental or social performance, while withholding negative information on these dimensions”).

114. Beate Sjafjell & Benjamin J. Richardson, Company Law and Sustainability: Legal Barriers and Sustainability 2 (2015).

115. Id. at 2.

116. What Is Fossil Fuel Divestment?, supra note 25; Fleishman, supra note 38.

117. Sjafjell & Richardson, supra note 114, at 35–36.

118. Id.

119. Caring for Climate, Homepage, http://caringforclimate.org/ (last visited Aug. 21, 2016).

120. Id.

121. Caring for Climate, Responsible Corporate Engagement in Climate Policy, http://caringforclimate.org/workstreams/climate-policy-engagement/ (last visited Aug. 21, 2016).

122. Hunter et al., supra note 10, at 1489.

123. Donal Crilly et al., The Grammar of Decoupling: A Cognitive-linguistic Perspective on Firms’ Sustainability Claims and Stakeholders’ Interpretation, 59 Acad. Mgmt. J. 705 (2016).

124. Sjafjell & Richardson, supra note 114, at 3.

125. John Elkington, Cannibals With Forks: The Triple Bottom Line of 21st Century Business 22 (1998).

126. Id.

127. Id.

128. Kevin Wilhelm, Return on Sustainability: How Business Can Increase Profitability and Address Climate Change in an Uncertain Economy 105 (2013).

129. Id.

130. Id.

131. Id.

132. Id.

133. US SIF: The Forum for Sustainable and Responsible Investment, SRI Basics, http://www.ussif.org/sribasics (last visited Aug. 21, 2016).

134. Wilhelm, supra note 128, at 166.

135. Id.

136. Hunter et al., supra note 10, at 1490.

137. David W. Case, Corporate Environmental Reporting as Informational Regulation: A Law and Economics Perspective, 76 U. Colo. L. Rev. 379, 389 (2005).

138. Id.

139. Wilhelm, supra note 128, at 166.

140. Emily Chasan, Investors Want More From Sustainability Reporting, Says Former SEC Head, Wall St. J., Nov. 12, 2015 (citing Governance & Accountability Institute, Flash Report—Seventy-Five Percent (75%) of the S&P 500 Index Published Corporate Sustainability Reports in 2014, http://www.ga-institute.com/nc/issue-master-system/news-details/article/flash-report-seventy-five-percent-75-of-the-sp-index-published-corporate-sustainability-rep.html), http://blogs.wsj.com/cfo/2015/11/12/investors-want-more-from-sustainability-reporting-says-former-sec-head/.

141. Wilhelm, supra note 128, at 161; Carbon Disclosure Project, Homepage, https://www.cdp.net/en-US/Pages/HomePage.aspx (last visited Aug. 21, 2016).

142. Case, supra note 137, at 389; see also GRI, Homepage, https://www.globalreporting.org/Pages/default.aspx (last visited Aug. 21, 2016).

143. The organization describes itself as follows: “CERES is a non-profit organization advocating for sustainability leadership. We mobilize a powerful network of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy.” http://www.ceres.org/ (last visited Aug. 31, 2016). CERES established a 10-point code of conduct that companies voluntarily commit to reporting on corporate environmental activities. Id.

144. Case, supra note 137, at 389; see also GRI, supra note 142.

145. Hunter et al., supra note 10, at 1491; see also GRI, Homepage, https://www.globalreporting.org/Pages/default.aspx (last visited Aug. 21, 2016).

146. GRI, Homepage, supra note 145.

147. Hunter et al., supra note 10, at 1491.

148. GRI, About Sustainability Reporting, https://www.globalreporting.org/information/sustainability-reporting/Pages/default.aspx (last visited Aug. 21, 2016).

149. William R. Blackburn, The Sustainability Handbook: The Complete Management Guide to Achieving Social, Economic, and Environmental Responsibility 285 (2d ed. 2015).

150. Id.

151. Id.; About Sustainability Reporting, supra note 148.

152. United Nations Global Impact, Participation, https://www.unglobalcompact.org/participation/report (last visited Aug. 21, 2016).

153. Id.

154. Case, supra note 137, at 389.

155. Id.

156. Blackburn, supra note 149, at 285.

157. Id. at 285–86.

158. Hunter et al., supra note 10, at 1488.

159. Id. at 1493.

160. Id. at 1501.

161. Id. at 1488.

162. Sjafjell & Richardson, supra note 114, at 4.

163. Hunter et al., supra note 10, at 1501.

164. Sjafjell & Richardson, supra note 114, at 18.

165. Crilly et al., supra note 123.

166. United Nations Global Impact, What Is U.N. Global Impact?, https://www.unglobalcompact.org/what-is-gc (last visited Aug. 21, 2016).

167. Id.

168. United Nations Global Impact, Our Mission, https://www.unglobalcompact.org/what-is-gc/mission (last visited Aug. 21, 2016).

169. United Nations Global Impact, Our Governance, https://www.unglobalcompact.org/about/governance (last visited Aug. 21, 2016); G.A. Res. 70/224, U.N. GAOR, 70th Sess., at 2, U.N. Doc. A/RES/70/224 (2016).

170. United Nations Global Impact, The Ten Principles of the UN Global Compact, https://www.unglobalcompact.org/what-is-gc/mission/principles (last visited Aug. 21, 2016).

171. See E. Cameron et al., Business in a Climate-Constrained World: Catalyzing a Climate-Resilient Future Through the Power of the Private Sector 6 (2014), http://www.bsr.org/reports/BSR_Business_in_a_Climate_Constrained_World_Report.pdf.

172. United Nations Global Impact, Global Compact +15: General Assembly Session, https://www.unglobalcompact.org/library/3861 (last visited Aug. 21, 2016); Video: GC + 15: General Assembly Session (U.N. Global Compact 2016), https://www.youtube.com/watch?v=DFMaTKadtfs.

173. Id.

174. Id.

175. United Nations Global Impact, Our Mission, supra note 168.

176. United Nations Global Impact, UN Global Compact and the Sustainable Development Goals, https://www.unglobalcompact.org/what-is-gc/our-work/sustainable-development/background (last visited Aug. 21, 2016).

177. Id.

178. US SIF, supra note 133.

179. Id.

180. Id.

181. Wilhelm, supra note 128, at 166.

182. US SIF, supra note 133.

183. Id.

184. Id.

185. Wilhelm, supra note 128, at 115.

186. Principles for Responsible Investment, About the PRI, https://www.unpri.org/about (last visited Aug. 21, 2016); Wilhelm, supra note 128, at 161 (The six principles are: (1) Incorporate ESG issues into investment analysis and decisionmaking process;
(2) Incorporate ESG issues into ownership policies and practices;
(3) Seek appropriate disclosure on ESG issues by the entities invested; (4) Promote acceptance and implementation of the Principles within the investment industry; (5) Work together to enhance effectiveness in implementing the Principles; and (6) Report on activities and progress toward implementing the Principles).

187. Wilhelm, supra note 128, at 107.

188. Principles for Responsible Investment, What Is Responsible Investment?, https://www.unpri.org/about/what-is-responsible-investment (last visited Aug. 21, 2016).

189. Id.

190. Id.

191. Principles for Responsible Investment, About the PRI, supra note 186.

192. US SIF, supra note 133.

193. Id.

194. Wilhelm, supra note 128, at 116.

195. Lawrence P. Schanpf, Environmental Issues in Business Transactions 461 (2014).

196. Caitlin Kauffman, Proxy Preview 2015 Examines Record-Breaking Number of Sustainability-Related Shareholder Resolutions, Sustainable Brands, Mar. 11, 2015, http://www.sustainablebrands.com/news_and_views/marketing_comms/caitlin_kauffman/proxy_preview_2015_examines_record-breaking_
number_s.

197. US SIF: The Forum for Sustainable and Responsible Investment, SRI Basics, http://www.ussif.org/sribasics (last visited Aug. 21, 2016).

198. Id.

199. Id.

200. Acknowledge Moral Imperative to Limit Global Warming to 2°C, 2016—Exxon Mobil Corporation (Feb. 1, 2016), http://www.iccr.org/sites/default/files/resources_attachments/exxonreso.pdf.

201. Id.

202. Id.

203. Id.

204. Press Release, Interfaith Center on Corporate Responsibility, ExxonMobil Seeks to Deny Shareholders a Vote on Climate Justice Proposal (Feb. 1, 2015), http://www.iccr.org/sites/default/files/blog_attachments/pr_exxon_-_moral_reso_1-31-15_final_3.pdf.

205. See Press Release, Interfaith Center on Corporate Responsibility, ExxonMobil Fails to Block Climate Justice Proposal at the SEC (Mar. 24, 2016), http://www.iccr.org/sites/default/files/blog_attachments/exxon_pr_sec-moral_reso_3-24-16final.pdf.

206. Wilhelm, supra note 128, at 106.

207. The Equator Principles Association, About the Equator Principles, http://www.equator-principles.com/index.php/about-ep (last visited Aug. 21, 2016).

208. Wilhelm, supra note 128, at 106.

209. The Equator Principles Association, Equator Principles Association Members & Reporting, http://www.equator-principles.com/index.php/members-reporting (last visited Aug. 21, 2016).

210. The Equator Principles Association, Homepage, http://www.equator-principles.com/ (last visited Aug. 21, 2016).

211. Id.

212. The Equator Principles Association, About the Equator Principles, supra note 207.

213. Wilhelm, supra 128, at 106.

214. Id.

This chapter appears in Climate Justice: Case Studies in Global and Regional Governance Challenges, Randal S. Abate, editor. 700 pages. $79.95. The collection is published by ELI Press, the book publishing arm of the Environmental Law Institute.

Josephine Balzac is an assistant professor in the Department of Social Entrepreneurship at Rollins College.

ELI PRESS ❧ Promoting corporate responsibility through the divestment of fossil fuels and socially conscious investment.

India's National Green Tribunal and the Future of Environmental Justice
Author
Bruce Rich - Environmental Law Institute
Environmental Law Institute
Current Issue
May-June 2018
Issue
3
Bruce Rich

Specialized environmental courts have proliferated around the world, growing from 350 in 2009 to over 1,200 in 44 countries by 2017. This growth is a response to increasing environmental litigation, as well as to failures in traditional legal systems in handling cases in an expedient and equitable way. Environmental tribunals have become especially significant in Australia, New Zealand, and some developing nations, in contrast to the United States and Europe, where environmental law has mostly remained under the jurisdiction of existing courts. India’s National Green Tribunal illustrates both the successes of such specialized tribunals and threats to environmental enforcement in many nations.

The NGT’s genesis was fostered by decisions of the Indian Supreme Court recognizing the need for new approaches to implement environmental law as well as by the failure of two earlier national environmental courts. Civil society activism and growing alarm over India’s ecological deterioration led finally in 2010 to the National Green Tribunal Act.

The act established a multi-disciplinary tribunal equally composed of judges and professional environmental experts (each group to number between 10 and 20), chaired by a judge, and divided into four regional benches and a central bench in Delhi. Indian rules for civil procedure and evidence do not apply, allowing for a broader evaluation of environmental and social issues as well as for the identification of alternatives to resolve disputes.

The NGT has jurisdiction over all civil cases concerning implementation of seven Indian national laws concerning air and water quality, forest conservation, environmental protection, and biodiversity. In the absence of a legal claimant, it can initiate cases itself for public purposes. It is required to consider the principles of sustainable development, the polluter pays, and precaution, as set out in the 1992 Rio Earth Summit Declaration. Cases must be decided within six months. Indian courts transferred a large backlog to the NGT, including in 2015 some 300 cases from the Supreme Court, some of which had been delayed for over 14 years.

Relaxed standing requirements enable community groups and NGOs to undertake claims in the public interest. Permanent technical specialists on the tribune level the playing field for poorer claimants when faced with powerful business interests that can hire reliably pro-corporate experts. By late 2017 the NGT had heard 23,341 cases and issued decisions on 19,970, the vast majority within the six-month requirement.

In an early 2012 case the NGT suspended India’s then largest foreign direct investment, the South Korean corporate giant POSCO’s $12 billion proposal for a steel plant and iron ore mines in southeastern India’s Orissa (later Odisha) state. The NGT exposed how the state and national governments and POSCO suppressed information on the project’s enormous impacts on water availability (diverting flows from irrigation and urban water supply), port infrastructure, sea turtles, and other marine life, and ignored the legal rights of local village councils. Following further studies and litigation, POSCO withdrew from the project in 2017.

The NGT has halted construction of coal power plants, coal mining projects, and an airport in response to complaints by local villagers and fisherman, citing flawed environmental assessments and inadequate consultation with affected communities. It levied its largest fine of $37 million against mining companies for illegal polluting activities on the Yamuna River upstream of Delhi and Agra.

In 2016 it halted proposed dams in the Himalayan states of Himachal Pradesh and Arunachal Pradesh. It ruled in the first case that construction could not proceed without the approval of affected village councils, and in the second that the 780 megawatt project had not considered the impact on the wintering habitat of the endangered black neck crane — viewed by the local Tibetan Buddhist population as a reincarnation of the Dalai Lama. In both cases representatives of local ethnic groups and engaged Buddhist monks protested government plans for massive dam construction that have ignored continual calls for more locally oriented development.

The NGT faces opposition for the simple reason that it is working. Its future is important for environmental justice and effective international environmental law not just in India, but worldwide. The Modi government has tried to limit its authority to making recommendations to the national government, instead of issuing legally binding rulings, as well as reducing term limits and professional qualifications for its members. Indian public interest advocates have challenged these dilutions in the Indian Supreme Court, and on February 18, the court reinstated at least temporarily rules set forth in the 2010 NGT enabling act.

India's National Green Tribunal and the future of environmental justice.

A Radical Alliance of Black and Green Could Save the World
Author
James Gustave Speth - Next Systems Project
J. Phillip Thompson III - Massachusetts Institute of Technology
Next Systems Project
Massachusetts Institute of Technology
Current Issue
May-June 2018
Issue
3
A Radical Alliance of Black and Green Could Save the World

But first the two movements will have to rediscover their shared roots in a fundamental critique of an economy and a society that value things more than lives.

Reprinted from The Nation, April 14, 2016, with the kind permission of the publisher.

A beautiful thing is happening: Advocates for racial justice and for environmental protection — too often, movements quite distant from each other — are coming together in a new way. One can see it in the campaign of National People’s Action and the Climate Justice Alliance to push for a just and locally empowering transition to clean energy; in the New Economy Coalition’s inclusive membership and commitment to front-line communities; and in the projects of the Evergreen Cooperatives, in inner-city Cleveland. These new efforts (may they multiply!) are grounded on a strong foundation. When one explores the roots of both the environmental and civil-rights movements, one finds a strikingly similar radical critique. Both movements have called for a deep restructuring of society and the economy; in both cases, that call is based on an affirmation of life and the devoted care that life requires of us.

There is urgency in this fusing. Environmentalists must confront a haunting paradox. Our environmental organizations have grown ever stronger, more sophisticated, and better funded, winning many battles along the way. Yet, 48 years after the first Earth Day, we find ourselves on the cusp of a ruined planet. Climate change is bearing down on us, with dire consequences that disproportionately impact the poor. Around the world, we are losing biodiversity, forests, fisheries, and agricultural soils at a frightening rate. Freshwater shortages multiply. Toxins accumulate in ecosystems and in our bodies. Something is terribly wrong, and more of the same cannot be the answer. It’s time for environmentalists to reassess and reboot. It’s time for a new environmentalism.

One can begin by asking: What is an environmental issue? We’d say that an environmental issue is any issue that affects environmental performance. When answered that way, environmental issues must include our failing political system and the erosion of democracy; the pervasive economic insecurity that paralyzes political action; and the materialistic, racially divisive, and completely anthropocentric values that dominate our culture. Environmental degradation is also driven by the triple imperatives of GDP growth at almost any cost, sustained corporate profits, and the projection of national power around the world.

These are among the root causes of our environmental decline, and if American environmentalists ever hope to succeed, we must find ways to address these systemic issues, which our movement has largely ignored. Environmentalists must revive our legacy of radical critique. In the movement’s early days in the 1960s and ’70s, those at the forefront asserted the need for a radical restructuring of the economy and society. Ecologist Barry Commoner was not alone in asking, in his 1971 best seller The Closing Circle, whether the operational requirements of the capitalist system are compatible with ecological imperatives. Commoner’s answer was no: If we do the right things for the environment, he argued, it’s difficult to see how today’s economic system could continue to operate, as dependent as it is on accumulation and growth.

Ideas like these motivated many of us as we set out to build the modern environmental movement. Reviving these ideas will require a new democratic politics, one that reasserts the ascendancy of people power over money power and moves us far away from the plutocracy and corporatocracy we see today. Rebuilding people power requires a fusion of progressive efforts, which means that progressives of all stripes must come out of our individual silos to build an unprecedented social movement.

Many of us who took up the environmental cause in the late 1960s drew our primary inspiration from America’s black community and its struggle for civil rights. We had entered college when the civil-rights movement was in full swing; those of us who went on to law school studied civil-rights litigation and legislation. We had seen the impact of social movements, of citizens standing up and speaking out. We regained faith in government’s ability to do great good. The civil-rights movement and the ’60s generally had taught us that activism could succeed, that government could succeed, that wrongs could be righted.

How do we overcome our tragic legacy of subordination of nature to humans and humans to other humans?

A great tragedy, looking back, is that the booming environmental movement of the 1970s didn’t build on this civil-rights connection. Instead of forging relationships with communities of color, our movement became — for a long period — a movement composed heavily of middle-class whites. The more recent emphasis on environmental-justice concerns has helped build a bridge between environmentalists and communities of color. But the environmental and racial-justice movements remain distant, without major dialogue between them. In a world where there is a premium on a melding of progressive forces, this situation is doubly unfortunate.

As in the environmental world, many in the black community are seeing limits to traditional advocacy. Achieving equal legal rights has enabled a small black upper-middle class to prosper, but it hasn’t prevented a widening wealth gap between most blacks and middle-class whites (not to mention the superrich). Nor has it prevented the reemergence of a racialized, two-tiered educational system or the mass criminalization of black youth. Faced with this realization, a number of black leaders, from grassroots organizers (such as those involved with Black Lives Matter and the Moral Mondays movement) to scholars, are calling for a rediscovery and revitalization of the civil-rights movement’s radical roots to address the deeper structural issues that America confronts.

The modern civil-rights movement had its origins in black advocacy before the Civil War, when radical activists called for a fundamental reordering of American society, beginning with its values. Martin Luther King Jr. turned increasingly to these broader issues in his later years. In his last presidential address to the Southern Christian Leadership Conference in 1967, King called upon his followers to “honestly face the fact that the movement must address itself to the question of restructuring the whole of American society. There are 40 million poor people here. And one day we must ask the question, ‘Why are there 40 million poor people in America?’ And when you begin to ask that question, you are raising a question about the economic system, about a broader distribution of wealth. When you ask that question, you begin to question the capitalistic economy. And I’m simply saying that more and more, we’ve got to begin to ask questions about the whole society. We are called upon to help the discouraged beggars in life’s marketplace. But one day we must come to see that an edifice which produces beggars needs restructuring.” Shortly after this address, King launched the Poor People’s Campaign.

Recently, Cornel West has brought together a remarkable collection of King’s speeches and writings. In his book The Radical King, West notes that later in his career, “King’s dream of a more free and democratic America and world had morphed into, in his words, ‘a nightmare.’ . . . He called America a ‘sick society.’ At one point, King cried out in despair, ‘I have found out that all that I have been doing in trying to correct this system in America has been in vain. I am trying to get at the roots of it to see just what ought to be done. The whole thing will have to be done away with. . . . Are we integrating into a burning house?’” The last years of King’s life were devoted to reviving the radical roots of the civil-rights movement — and his own.

There is something profoundly hopeful in these calls to rediscover the civil-rights movement’s radical roots. Though they’re important in their own right, they are also important for environmentalists and the future of the environmental movement, and for progressivism generally.

Of course, the black struggle in America includes many strong currents of radical thought and action, more than in the environmental movement. Still, their shared roots are apparent, and the best traditions of both movements are very much aligned. Both see the origin of our country’s problems in the system as a whole: in capitalism and the values and institutions that support it. As King said, the whole edifice needs restructuring. The operating system by which we live and work is programmed for the wrong results, and it needs to be reprogrammed so that it genuinely sustains and restores human and natural communities. This task is daunting, but it is also rich with opportunity as a powerful basis for dialogue and collaboration between two of our country’s greatest social movements — one that holds the potential for a common language, a common critique, and a common agenda.

And there’s an even deeper and more profound set of considerations that unite black and green. Early crusaders for black freedom took special aim at the worldview and values that enabled a rapacious form of capitalism — the slave system — to emerge and flourish. Unlike later theories of socialism, which focused blame for economic inequality and racial divisions on economic self-interest and power differentials between classes, advocates like Sarah Grimké and Frederick Douglass emphasized the cultural origins of inequality and oppression — in precapitalist religion, in philosophy, and in social attitudes and prejudices. They held that there could not be a fundamental change in the economic or social system without a simultaneous revolution in deeply held values. Much later, King would revive the call for “a radical revolution of values.” He spoke with clarity about what was at stake: “We must rapidly begin the shift from a ‘thing-oriented’ society to a ‘person-oriented’ society. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism, and extreme militarism are incapable of being conquered.”

For King, “other-preservation is the first law of life. It is the first law of life precisely because we cannot preserve self without being concerned about preserving other selves.” He was referring to other humans, whereas environmentalists consider nature as the other about which humans must be concerned. Yet these two imperatives are ineluctably intertwined. The subjugation of nature and its life creates the pretext for the subjugation of human beings. Human dignity cannot be restored fully without first displacing the God-like status that western thought has bestowed on some at the expense of others, as well as our instinct to sort life into hierarchies of value. Full dignity requires that humans be reconnected to each other and to the natural world that sustains all life.

The environmental movement criticizes the separation of human beings from the natural world and the treatment of nature as existing to serve human ends. This separation has strong roots in the Western tradition, from Aristotle to the Bible. The Genesis “dominion” mandate, for example, served the cause of elevating humans over nature and has had a powerful influence down through the centuries, an influence that efforts like the Forum on Religion and Ecology have sought vigorously to counter.

The cultural historian Thomas Berry has described the European settlement of North America as “a clash between the most anthropocentric culture that history has ever known with one of the most nature-centric cultures ever known.” European settlers in the Americas made a major distinction between themselves, whom they declared were created in God’s image, and indigenous peoples and Africans, whom they regarded as less than fully human. The escaped slave and abolitionist revolutionary Henry Highland Garnet, addressing a black audience in 1848, said, “Brethren, your oppressors . . . endeavor to make you as much like brutes as possible.” King noted that “a nation that will keep people in slavery for 244 years will ‘thingify’ them and make them things.”

This attitude of control and dominion over “soulless” matter and animals, including “inferior” nonwhites, is an evil embedded deeply in the culture of modern society. It also haunts and weakens our democracy. Absent genuine solidarity across racial groups, democracy can easily degenerate into a tyranny of the majority, as it has for much of American history. Unless we counter the white-supremacist attitude of control and domination over both nature and nonwhite others, the cross-racial solidarity we need in order to deepen democracy, change the economy, and save the environment will continue to elude us.

Civil-rights activists were fond of saying that all human destiny is intertwined. What many indigenous philosophies teach is that the destiny of all life is intertwined. In 1977, the elders of the Iroquois Confederacy issued a remarkable statement, “Basic Call to Consciousness: Address to the Western World”: “The Hau de no sau nee, or the Six Nations Iroquois Confederacy, has existed on this land since the beginning of human memory. . . . Our essential message to the world is a basic call to consciousness. The destruction of the Native cultures and people is the same process which has destroyed and is destroying life on this planet. The technologies and social systems which have destroyed the animal and plant life are also destroying the Native people. . . . It is the people of the West, ultimately, who are the most oppressed and exploited. They are burdened by the weight of centuries of racism, sexism, and ignorance which has rendered their people insensitive to the true nature of their lives. . . . The people who are living on this planet need to break with the narrow concept of human liberation, and begin to see liberation as something which needs to be extended to the whole of the Natural World.”

How do we overcome our tragic legacy of subordinating nature to humans and humans to other humans? Surely one step is to see this historical pattern for what it is: the product of profound arrogance. Love, care, respect — we owe these to each other and to the natural world, and their common wellspring is an attitude of the heart, an abiding humility, awe, and reverence in the face of life’s wondrous creations: the very opposite of arrogance. TEF

TESTIMONY ❧ But first the two movements will have to rediscover their shared roots in a fundamental critique of an economy and a society that value things more than lives.

What Makes a Village
Author
Ayanna V. Buckner - Community Health Cooperative
Community Health Cooperative
Current Issue
May-June 2018
Issue
3
What Makes a Village

When a community needs to heal, individual claims are not enough. Collective harm also needs to be addressed. As the Deepwater Horizon disaster shows, resources for regional recovery can and should be included in toxic tort court decisions or settlements.

Ayanna V. BucknerAyanna V. Buckner is a medical doctor and principal of the Community Health Cooperative in Atlanta, Georgia.

Film critics gave Erin Brockovich positive reviews. Some were delighted to see an A-list movie star, Julia Roberts, portray a strong woman who, according to the story’s tag line, “brought a small town to its feet and a huge company to its knees.” However, a reviewer for Sight & Sound astutely noted that the work’s “near-fairytale resolution doesn’t offer a magical transformation” for the community as a whole, which remained underserved.

Brockovich and the citizen plaintiffs received a huge settlement from Pacific Gas & Electric, which poisoned their water supply, but moviegoers did not see the impact of those funds on the community. This is a significant omission. There were several hundred plaintiffs in the same locality, each of whom received a share of the money, but the film didn’t show what happened to the neighborhood after the credits rolled.

When a common interest such as health is affected by a toxic tort incident, it is paramount to consider what is needed to allow not just citizens but the community as a whole to recover. Funds that simply address the needs of individuals do not sufficiently address the collective impact of the toxic tort incident.

There is an important lesson here. It starts by investigating the community needs after a massive toxic tort. In the town of Hinkley, California, site of Brockovich’s litigation, community needs begin with a safe drinking water supply. But they may also include funding for public health surveillance systems that would recognize an unexpected increase in cancer and other medical problems associated with environmental toxins like hexavalent chromium, the chemical at issue in Hinkley. There is also a necessity for training local primary care providers to diagnose and treat these conditions, or possibly expansion of services and staff to include environmental health and toxicology as well as associated psychological needs.

Toxic tort awards or settlements are designed to allow injured parties to recover damages for environmental exposures. They traditionally focus solely on the individual, and little thought is typically given to awarding damages on the community level. Yet a locality is changed by a massive toxic tort, and any decision or settlement needs to take that into account. Integrating community-level approaches into toxic tort outcomes may challenge orthodox practices, but doing so has the potential to exponentially enhance the impact of resolutions. A community-level approach should not necessarily replace individual damages, but it provides a novel solution to maximize benefit for members of the affected class, particularly when their neighborhoods are located in historically underserved regions.

Research has shown that environmental disasters frequently have the largest impact on poor and medically underserved communities that already have some of the worst health outcomes. These communities usually have fewer financial resources, are less likely to evacuate, and lack health resources and/or access to health care before the disaster as well as during the recovery period. Research has found that poor and medically underserved communities experience delayed treatment of preexisting or new conditions (either physical or mental) after a disaster, and their conditions worsen due to fewer chances for early treatment.

Health disparities have plagued the gulf region for decades. Alabama, Louisiana, and Mississippi consistently rank at the bottom of states in many important health ratings, including overall health, infant mortality, and prevalence of chronic conditions such as diabetes, hypertension, stroke, and obesity. Florida, while better, remains in the bottom 50 percent. Within these states, the communities along the gulf are among the most vulnerable, and the challenges posed by poor health outcomes are greater.

Preexisting disparities make communities more prone to acts of nature such as hurricanes, and they add to the deleterious repercussions of man-made disasters such as the 2010 Deepwater Horizon oil spill. Medically underserved communities have prompted national discussions about health disparities, and more recently, health equity. Whether they are at risk for environmental disaster because of their geographic location or because of their proximity to artificial risk factors, for many communities it is not a matter of if but when an environmental disaster may occur. Gulf Coast communities such as New Orleans and Houston and smaller localities right on the gulf shoreline are recent examples, but myriad other cases exist across the country and abroad. The focus on health disparities and health equity should not be forgotten when toxic spills or similar disasters occur. Instead, they should be a key consideration that guides decisionmaking around how toxic tort decisions and settlement agreements are approached.

Given the inherent complexities of toxic tort litigation, one might question the utility of adding another matter on which the parties must reach agreement or that judges or juries must consider in rendering a decision. Also, incorporating community considerations into settlement negotiations might prompt a series of questions about the focus of the program, who would be covered, and how it would be run. A program that arose from the settlement agreement associated with the largest environmental disaster in American history provides answers to these pertinent questions.

According to the report of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, more than 200 million gallons of oil spilled into the Gulf
of Mexico after the explosion of the rig in April 2010. The spill exacerbated a fragile situation in Gulf Coast communities attempting to heal after hurricanes Katrina and Rita and highlighted the public health and health-care deficiencies that individual claims could not address. Without the proper health infrastructure, Gulf Coast communities would continue to be medically at risk.

There remained a space for a program to address many of the longstanding health inequities that exist in gulf communities. Such a program would focus on integration and collaboration among academic, clinical, and local partners. It would build on existing neighborhood capacity in order to develop sustainable initiatives aimed at strengthening the community building blocks of the region.

In addition to a settlement agreement on economic and property damages between BP and Gulf Coast residents, a medical benefits settlement agreement allows class members to seek compensation for a specified physical condition, offers participation in the Periodic Medical Consultation Program, and offers the provision of a “back end” litigation option process for physical conditions that become manifest later.

However, there is also a lesser-known, community-focused component of the medical agreement that is the focus of this article. The Gulf Region Health Outreach Program is a unique approach to use a classic toxic tort settlement to address community health damage that is not readily addressable through standard tort practices. The GRHOP was developed jointly by BP and the Plaintiffs’ Steering Committee as part of the Deepwater Horizon Medical Benefits Class Action Settlement, which was approved by the U.S. District Court in New Orleans on January 11, 2013, and became effective on February 12, 2014.

Supervised by the court and funded with $105 million, the GRHOP was established “to expand capacity for and access to high quality, sustainable, community-based healthcare services, including primary care, behavioral and mental healthcare, and environmental medicine, in the Gulf Coast communities in Louisiana, Mississippi, Alabama, and the Florida Panhandle.”

The program is a result of negotiations between BP’s counsel and the Plaintiffs’ Steering Committee over the terms of the class action settlement. The talks provided an opportunity to explore the needs of localities and approaches that could be undertaken through the settlement agreement to address the needs. The steering committee expressed concern about potential physical and mental health effects of the spill on residents of Gulf Coast communities, and they felt that a settlement needed to address such issues.

Both sides consulted with medical and public health experts. They decided to put aside their disagreements about the cause of the medical issues faced by those along the Gulf Coast and chose to work together on an unusual solution aimed at improving healthcare capacity and access for class members directly, and potentially Gulf Coast residents indirectly, that would benefit the historically underserved region. By sharing the proposals — many of which were unsolicited — for discrete public health projects in the context of settlement discussions, BP’s counsel and the plaintiffs’ committee recognized the synergies among the various projects. They were then able to craft an integrated, multifaceted public health program in which the whole could be greater than the sum of its parts.

T he GRHOP was designed as a series of five integrated five-year projects to strengthen healthcare in certain Gulf Coast communities affected by the oil spill. The target beneficiaries are residents, especially the uninsured and medically underserved, of 17 coastal counties and parishes in Alabama, Florida, Louisiana, and Mississippi. As one of the four types of benefits contained in the Deepwater Horizon Medical Benefits Class Action Settlement, the GRHOP is the benefit that stands to have the greatest impact because of its population-based approach and its focus on activities designed to produce sustainable benefits to communities that last beyond the program’s five-year funding period.

The lynchpin to the sustainability of the program is the use of existing local capacity such as federally qualified health centers, or FQHCs, or other local health clinics as the hub that integrates the GRHOP projects. FQHCs are community-based healthcare organizations, operated under the supervision of the U.S. Department of Health and Human Services, that are required to provide comprehensive primary and preventive care, including health, oral, and mental and behavioral health services, regardless of the patient’s ability to pay. FQHCs receive a number of benefits from the federal government, including enhanced Medicare and Medicaid reimbursement rates and the ability to purchase outpatient drugs at a below-market price. One of the most significant strengths of the GRHOP is its leveraging of its funds with existing federal programs.

The ultimate goal of the GRHOP is to inform residents of the targeted communities about their own health and provide access to skilled frontline providers supported by networks of specialists knowledgeable in addressing communities’ physical, environmental, and behavioral and mental health needs, thereby improving the resilience of the targeted localities to future health challenges. The program consists of projects to build the capacity of primary care community health clinics in the region. These include increasing the mental and behavioral health expertise of medical professionals in the target neighborhoods and increasing awareness by local communities of mental and behavioral health issues. Another goal is to increase the environmental health expertise of medical professionals in the targeted communities and the health literacy of local residents. Community health workers are trained to help residents navigate the healthcare system and access needed care. And a program coordinates community involvement within and across all GRHOP projects.

The Medical Benefits Settlement Agreement established the GRHOP Coordinating Committee to ensure that the respective projects function in a cooperative and integrated manner and have reasonable flexibility to adjust their respective implementation to respond to changed needs and circumstances. The committee is composed of representatives from each of the projects as well as three unaffiliated members, one of whom serves as chairperson. The committee meets on a quarterly basis, and Medical Benefits Class Counsel and BP representatives may attend the meetings as observers at their own expense. The committee also meets via teleconferences between the in-person meetings, both as a full committee and in subcommittees — some formed to take action on short-term issues and others to address long-term functions such as evaluation of the overall program, communication with stakeholders, and collaboration across the GRHOP projects to promote and publicize program successes.

The court appointed a claims administrator to implement and administer the Medical Benefits Settlement Agreement in accordance with its terms and conditions, including administrative responsibilities in support of the GRHOP and the coordinating committee. In addition, there is a GRHOP Library — a publicly accessible, text-searchable, indexed, online electronic repository that contains reports, articles, studies, etc. The claims administrator maintains the library, and it is updated annually. The library will remain in existence for 21 years following the Medical Benefits Settlement Agreement’s effective date, thus serving as a strategic tool to disseminate the lessons learned from a regional, community-based model for addressing environmental exposures and impact.

In keeping with the specifications of the Medical Benefits Settlement Agreement, the GRHOP’s emphasis on high quality is fundamental to effective program implementation. Evidence-based models and best practices that have been demonstrated to address needs in the most vulnerable communities underscore the quality of the programs’ activities. Project leaders have combined existing community-level health data with targeted local and regional community health-needs assessments to inform priority areas within the specified counties and parishes. The program is further enhanced through the suite of interconnected resources provided to the selected community health centers across the Gulf Coast.

For example, each FQHC receives direct funding (support for technology, staffing, capital improvements, etc.) from the Primary Care Capacity Project as well as customized technical assistance (quality improvement and financial management, health information technology, etc.). The Mental and Behavioral Health Capacity Project offers health providers who are integrated within the FQHC’s primary-care services and also delivers training to help providers identify and manage the mental and behavioral health conditions that are appropriate for treatment in the primary-care setting. The Environmental Health Capacity and Literacy Project provides training for the FQHC’s primary-care clinicians to evaluate patients with environmental health complaints and provides an environmental health medical specialist for the patients, as needed. The Community Health Workers Training Project trains community health workers and peer health advocates and provides funding opportunities so that selected FQHCs and community-based organizations can hire them to help residents navigate the healthcare system, access needed care, and provide educational resources and other support to patients and community members. The Community Involvement Project subcontracts with local organizations to assist in outreach and project coordination. All these organizations are engaged in partnerships that support the FQHC’s outreach and education efforts.

Sustainability, another attribute specified in the Medical Benefits Settlement Agreement, provides a strong argument in support of initiating community-level programming through toxic tort awards and settlements. The coastal counties and parishes that benefit from the GRHOP are located in states that have consistently held the lowest health rankings. Since an environmental exposure has the potential to instigate new health conditions (either physical or mental) and exaggerate existing ones, a health system in a vulnerable area may lack the capacity to meet a community’s imminent needs. Therefore, the GRHOP projects are embedded in and complement, rather than detract from or replace, the existing efforts being undertaken by the public health community. By building upon existing community-health resources, the GRHOP promotes and leverages the resilience of the system and subsequently positions the enhancements provided through programming to be sustained.

For example, the Primary Care Capacity Project builds the capacity of FQHCs by providing them with direct funding and delivering customized technical assistance to assist centers with sustaining services. The project also supports regional health information exchanges, regional care collaboratives, and infrastructure investments that can be utilized to address relevant health issues ranging from health inequities to emergency preparedness and response for natural or technological disasters. Additionally, the training provided through the Environmental Health Capacity and Literacy Project, Mental and Behavioral Health Capacity Project, and Community Health Workers Training Project provide healthcare workforce development aimed at advancing and sustaining improved physical and mental health outcomes. Furthermore, the efforts by the individual GRHOP projects and collective work of the coordinating committee to evaluate the programming and disseminate findings via academic and community-based conferences, journals, media coverage, and GRHOP’s website and library, to mention a few, position the project leaders to continue their work by applying for and obtaining financial support from private and public sources after the funding period ends.

The GRHOP is a promising example of how toxic tort settlements or awards can be used to simultaneously mitigate the impact on a community and invest in it. The projects build capacity from the ground up, involving local communities, each of which may have very different needs. In particular, within the culturally and ethnically diverse gulf, there is no one-size-fits-all solution to healthcare problems. The GRHOP recognizes this fact and translates it into a model that is reflective of the communities it serves. It creates, reinforces, and expands local networks and partnerships to construct a bridge from environmental disaster to improved physical and mental health. Through its integrative and collaborative approach, the GRHOP is building a strong foundation on which the region can continue to build its healthcare system for years to come.

The program is replicable, feasible, and reflective of the expectations associated with a high quality and sustainable health program, and it presents a model that can be scaled up or down to complement a given community in other toxic tort situations. The program’s reliance on the existing talent and brainpower in the gulf region, among them nationally and internationally recognized leaders, deepens the program’s impact. Finally, the GRHOP can also serve as an impetus for environmental law professionals to recognize and champion the opportunity afforded by toxic tort settlements and awards to make an enduring impact beyond the conventional approach of an individual settlement. TEF

CENTERPIECE ❧ When a community needs to heal, individual claims are not enough. Collective harm also needs to be addressed. As the Deepwater Horizon disaster shows, resources for regional recovery can and should be included in toxic tort court decisions or settlements.

ELI Report
Subtitle
Making Law Work for People, Places, and the Planet
Author
Laura Frederick - Environmental Law Institute
Environmental Law Institute
Current Issue
March-April 2018
Issue
2

Floodplain Buyouts: Following 2017’s monster storms, reports aid communities in acquiring and rehabilitating properties.

2017’s extreme hurricane season is a reminder that such storms are the new normal. Communities will need to become resilient to consequences. ELI can help.

In the aftermath of floods and major storms, property owners are faced with a tough choice — to stay and rebuild in place or leave and rebuild on higher ground. An incentive for homeowners is to participate in a floodplain buyout program, such as the voluntary Federal Emergency Management Agency mitigation buyout program or state or local floodplain acquisition programs for destroyed homes and neighborhoods.

Once properties are acquired through these programs and existing structures removed, the land is typically dedicated to open space or recreational or wetland-management uses. Local governments often take ownership, but they have neither funding nor guidance on what to do with the properties over the long term. The result is that key opportunities are missed to leverage the environmental and flood-mitigation benefits of these properties.

Since 2013, ELI and the University of North Carolina Institute for the Environment have worked to increase knowledge and provide guidance to local governments and communities on how to use buyout programs to maximize the environmental and flood-mitigation benefits of acquired properties.

Building on our expertise, at the end of 2017 ELI and UNC released two guidance documents for local governments and communities. The first guide, Prioritizing Future Floodplain Acquisitions: Maximizing Opportunities for Habitat Restoration, Community Benefits, and Resilience, provides ideas for planning floodplain acquisitions and related projects in order to maximize community benefits. While buyouts are primarily intended to address flood damage to communities in the short term and mitigate future risks, secondary, longer-term benefits can include restoring habitat, rehabilitating ecosystems to improve water quality, and creating recreational spaces. By prioritizing eligible future buyouts, communities can develop more comprehensive mitigation projects and broaden their options for the management and use of acquired properties.

The ELI-UNC report provides a summary of prioritization criteria and methods that communities are using to make the most of these buyouts today, along with a four-step outline for integrating broader community goals into hazard mitigation and acquisition planning.

The second guide, Financing and Incentives Guide for Floodplain Buyouts, focuses on how local governments and communities can fund the acquisition and management of damaged properties.

The primary federal sources of funding for acquisitions are often only available after declared disasters, and often are not sufficient to purchase all eligible properties from willing sellers. Further, federal acquisition programs are usually matching funds for buyout projects provided by state and local governments or other entities. As a result, there are often more property owners willing to sell than are funds available.

Funding also represents a major challenge to managing and restoring properties to successfully leverage all the benefits of floodplain buyouts. Because of these challenges, most acquired properties remain as vacant, unimproved lots.

While available funds vary by state and locality and can depend on budgets, some communities have found creative ways to fund acquisition and management of open space properties. Based on a review of innovative approaches to make floodplain acquisitions a reality, ELI and UNC provide an overview of the sources and types of funds that exist and how they can be used to contribute to acquisition projects. The analysis offers a concise summary of how to approach this critical component of a successful buyout project.

Restoration in Gulf of Mexico Can Continue Despite Funding Cuts

In 2017, ELI released a background paper on Fast-Tracking ‘Good’ Restoration Projects in the Gulf of Mexico, which focused on mechanisms available to speed restoration projects that are subject to federal environmental requirements. The Institute’s research indicated that as the pace of restoration accelerates, resource constraints are likely to become a barrier to timely action and efficient environmental compliance. 

ELI recently published a follow-up to that work, addressing this resource deficiency conundrum. Fast-Tracking Restoration: Addressing Resource Constraints in Federal Agencies focuses on how agencies may be able to supplement their internal budget and personnel resources in order to increase the efficiency of the compliance process.

In general, federal agencies can only expend funds allocated to them through the congressional appropriations process. There are exceptions. ELI’s guide explains the circumstances in which federal agencies are allowed to accept outside funds or share personnel with other entities. Appropriately applied, these provisions may assist federal agencies overseeing gulf restoration in addressing at least some of their resource constraints related to environmental compliance.

The backgrounder explores legal provisions to allow government agencies to accept non-federal funds that can be used to expedite activities related to permitting and other environmental compliance activities, and it highlights mechanisms for intergovernmental transfer or loan of personnel engaged in environmental compliance activities to increase capacity without expending funds.

The backgrounder reviews hiring third-party contractors to prepare documents required for federal permits, approvals, or funding, paid for by the applicants, in place of agency review. 

Finally, the report suggests attendance at non-profit training activities by government employees involved in environmental compliance activities, where those needs are not already being met.

ELI also provides examples of instances in which these provisions have been used in projects.

By being strategic about the use of existing resources and creating new ones, federal agencies may be able to move restoration projects forward at the rate necessary to rehabilitate the environment and livelihoods of gulf communities.

 

Senator gives roadmap for environmental justice at ELI event

Last fall, Senator Cory Booker (D-NJ) and Representative Raul Ruiz (D-CA) introduced the Environmental Justice Act of 2017. The bill would require federal agencies to address environmental justice through agency actions and permitting decisions, and strengthen legal protections against environmental injustice for communities of color, low-income communities, and indigenous communities. The measure is the culmination of a months-long process of working with dozens of grassroots organizations across the country to craft a comprehensive bill that strengthens environmental justice protections for vulnerable communities. 

ELI hosted a panel discussion co-sponsored by the ABA Section of Civil Rights and Social Justice’s Environmental Justice Committee, the ABA Section of Environment, Energy, and Resources’ Special Committee on Environmental Justice, and Beveridge and Diamond, P.C.Booker gave the keynote address, focusing on the various ways the bill addresses critical issues for vulnerable communities nationwide.

He highlighted the connection between social justice issues and environmental problems. Booker started his career as an activist for issues of poverty, but saw “unconscionable” harm to the environment in his own backyard, such as lead contamination and water pollution, that stemmed in part from racism and disadvantage.

“I didn’t become an environmentalist because I was worried about global warming,” he said. “I didn’t become an environmentalist because I was concerned about penguins or polar bears. I became an environmentalist because I was living in Newark,” where environmental problems were disproportionately cast on disadvantaged communities.

Following the senator’s address, the cosponsors held a discussion with Mustafa Ali, vice president of climate, environmental justice, and community revitalization for the Hip Hop Caucus and formerly head of the EPA’s Office of Environmental Justice, and Patrice Simms, vice president of litigation for Earthjustice.

The program was moderated by B&D’s Randy Hayman.Topics included changes at EPA’s Office of Environmental Justice, attempts to limit science in agency decisionmaking, and challenges to environmental protection for clean air, water, and land via measures that could curtail citizen suits and enforcement. 

Field Notes: China grants ELI premier elite NGO advisor status

ELI has received approvals from China’s Ministry of Environmental Protection and the Beijing Bureau of Public Security to begin work on a project to build the capacity of NGOs to more fully engage in environmental litigation. The project is supported by the Hewlett Foundation and the Tilia Fund. 

Chinese law grants authority to NGOs to file these types of suits. ELI will work with its local partner, the China Environmental Protection Foundation, to build the capacity of public interest groups in China to file and win environmental cases, ensuring accountability and improvements in environmental quality. With this final procedural step in place, ELI cohosted its first workshop in January. 

Receiving this approval is a major reflection on ELI’s international reputation in promoting effective environmental governance and rule of law, as ELI is the first foreign NGO to receive temporary registration for an environmental protection-related project from the MEP under China’s foreign NGO law. It is also demonstrative of the excellent work of CEPF.ELI expects to receive additional temporary registration with other China-based partners to further expand the Institute’s growing work with governmental agencies and others in China. 

ELI expects to receive additional temporary registration with other China-based partners to further expand the Institute’s growing work with governmental agencies and others in China.

❧ ELI Visiting Scholar Carol Adaire Jones moderated a session on Tackling Wasted Food With Smart Technology hosted by the Solid Waste Association of North America. The session brought together speakers from organizations and companies that employ new and innovative uses of smart technologies to reduce food waste. The session focused on issues surrounding EPA’s Food Recovery Hierarchy of reduction (preventing wasted food at the source), reuse (donating wasted food leftovers) and recycling (as energy or nutrient products following processing).

❧The Antiquities Act grants presidents the authority to protect historic landmarks, structures, and objects of historic or scientific interest, and restrict uses of that land accordingly. The statute is ambiguous, however, as to whether the authority to reduce or modify these national monuments rests with Congress or the President — and the courts have never ruled on this particular issue.

Yet, last April, more than 50 years since the last alteration of national monument boundaries, President Trump issued an executive order instructing the Interior Department to undertake a broad review of national monuments created since 1996 that are larger than 100,000 acres. Based on the review, two proclamations significantly reduced the perimeters of Grand Staircase-Escalante and Bears Ears national monuments. 

ELI explored these legal questions at an ELI Associates Seminar, Antiquities Act: Legal Implications for Executive and Congressional Action. Speakers explored issues surrounding presidential authority and the role of Congress in the declaration and modification of national monuments. Participants gained insight into the legal history of the law, importance of America’s national monuments, and the role of Congress in management of these lands.

Aiding communities flooded by storms, sea-level rise.

The Debate: Federalism During an Era of Retrenchment, Growing State Needs
Subtitle
Cooperative Federalism in the Trump Era: Can the Sovereigns Collaborate in Gains?
Current Issue
January-February 2018
Issue
1
The Debate

Since its establishment 47 years ago, the U.S. Environmental Protection Agency has had overarching enforcement responsibility for most of the nation’s federal environmental laws. But over the decades, states have developed the expertise and capacity for ensuring environmental protection. With the Trump administration’s proposed downsizing of EPA’s budget and staffing and renewed focus on states, decisionmakers and stakeholders have a timely opportunity to rethink the paradigm of cooperative federalism and environmental protection.

For decades, EPA has played the role of the “gorilla in the closet,” the looming threat of federal enforcement if regulated entities did not cooperate with state enforcement efforts. But if less federal enforcement is on the horizon, how can environmental compliance be assured? In considering this question, the Environmental Council of the States has proposed that a periodic audit system take the place of federal intervention in delegated states. How would an audit system of this kind work in practice, and what are the implications of this kind of change?

Meanwhile, environmental data are being generated at an exponential rate, and other actors, namely localities and international regimes, are increasingly asserting their roles in environmental governance.

At the ELI-Miriam Hamilton Keare Policy Forum, held just before the annual Award Dinner, an expert panel discussed the opportunities and challenges of a new take on cooperative federalism for environmental governance. The conversation considered trends in politics, economics, technology, and other factors influencing environmental protection.

How will information technology and interconnectivity change environmental enforcement and accountability? How can governments, advocates, and businesses evaluate this information and use it to ensure compliance? What do forces outside the federalism dichotomy mean for the future of environmental governance in a global economy and society unconstrained by state or national borders?

 

Stan Meiburg

“Big data, the 24-hour news cycle, and hyper-transparency have the potential to disrupt the federal-state relationship, but there are also opportunities”

Stan Meiburg
Director of Graduate Studies in Sustainability
Wake Forest University
Moderator

Barry E. Hill

“Environmental justice has been embedded in each and every one of the laws that EPA administers. How is that going to change as a result of this
cooperative federalism?”

Barry E. Hill
Visiting Scholar
Environmental Law Institute

 
Neal Kemkar

“We at GE believe climate change is real. Pollutants don’t respect boundaries. Which raises the issue of state-federal relations and international relations as well”

Neal Kemkar
Director of Environmental Policy
General Electric

Becky Keogh

“Some view EPA as a helicopter parent to the states. Sometimes it’s a matter of letting our children grow up and understanding that programs have matured”

Becky Keogh
Director
Arkansas Department of Environmental Quality

 
Bob Martineau

“Cooperative federalism is really about the how, not the what. As to the what, people will agree we should breathe clean air and should have access to clean water”

Bob Martineau
Commissioner
Tennessee Department of Environment and Conservation

Vickie Patton

“We’ve got to reach out to the public and commit to the highest levels of transparency and really inclusive dialogue. We’ve got to be thinking about adaptive federalism”

Vickie Patton
General Counsel
Environmental Defense Fund

 

Stan Meiburg: Here is a reading from Federalist #51.

“In the compound republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allotted to each is subdivided among distinct and separate departments. Hence a double security arises to the rights of the people. The different governments will control each other, at the same time that each will be controlled by itself.”

This tension between two sovereigns can be destructive, as it was in the Civil War, but it can also be creative, with states serving as laboratories for democracy. The field of environmental protection is no exception to this tension and this opportunity.

Our first speaker on our federalism and environmental protection is Barry Hill. Barry is a visiting scholar at the Environmental Law Institute. He worked at EPA for many years as senior counsel for environmental governance in the Office of International Affairs, and as the director of the Office of Environmental Justice.

Barry Hill: There are four questions that I would like to pose. The first question is whether or not this cooperative federalism is new and what makes it so?

During the Clinton administration, I worked on EJSEAT — the Environmental Justice Strategic Enforcement Assessment Tool. Then the Bush administration came in and they said, “It’s now going to be called Environmental Justice Smart Enforcement Assessment Tool.” Same acronym, and at EPA we loved acronyms. Other than that one word, nothing really changed. So, I thought about that as it related to this thing called cooperative federalism and whether it is new.

The second question is whether a new cooperative federalism means we are going to abandon everything that has been done over the last 40 years or so in the environmental law and policy area. Will EPA no longer be the overseer?

The third question relates to environmental justice. Since the office was established 25 years ago, environmental justice has been seen as embedded in each and every one of the laws that EPA administers. How is that going to change as a result of this cooperative federalism?

The final question is whether this cooperative federalism is used as a sword or shield. In announcing the rollback of the Clean Power Plan, Administrator Pruitt said, “We can now assess whether further regulatory action is warranted; and, if so, what is the most appropriate path forward, consistent with the Clean Air Act and principles of cooperative federalism.”

Really? What does that mean?

He went on to state, “The previous rule ignored states’ concerns and eroded longstanding and important partnerships that are a necessary part of achieving positive environmental outcomes.” Was that a sword or shield?

Stan Meiburg: Neal Kemkar is the director of environmental policy at General Electric. Before joining GE, he worked for the White House Council on Environmental Quality, the secretary of the interior, and the governor of Colorado.

Neal Kemkar: At GE, we have 300,000 people operating in 180 countries. I want to boil up our experience into several megatrends.

The first is digitization. The number of connected devices will reach 50 billion by 2020. In a few years, we may all have personal air quality monitors in our pocket that tell you the levels of PM 2.5 in your exact neighborhood. How do we capture these terabytes of data?

Second is fossil fuel abundance. In the last decade, we have seen a tenfold increase in U.S. shale gas production and a 50 percent reduction in oil prices. Our collective challenge is ensuring that the resulting production and consumption are as efficient as possible. How does that interplay with that industry’s social license to operate?

The third is growing resource stress. We at GE believe climate change is real, the science is settled. Pollutants don’t respect boundaries, which raises the issue of state-federal relations and of course international relations as well.

Last is this idea of competitive clean energy. In the midst of digitization, fossil fuel abundance, and resource stress, we’ve also witnessed unprecedented innovation in the clean energy space. Costs have declined dramatically. Solar costs have come down 75 percent over the last decade. Wind power installed capacity has grown ten times.

More connected devices, fossil fuel abundance for the foreseeable future, intensifying resource stress that increasingly doesn’t respect boundaries, and competitive clean energy. These are the megatrends we face.

Stan Meiburg: Becky Keogh is vice president of the Environmental Council of the States. She has served as the director of the Arkansas Department of Environmental Quality since 2015.

Becky Keogh: One thing we need to remember is that states had environmental programs many years prior to the 1970s. Our agency has existed since the 1940s. And many issues were addressed not by a federal agency or a state but by cities.

Back then, we didn’t have the benefit of today’s technology, nor did we have the tens of thousands of trained professionals in environmental sciences and technologies that we do today. At our agency, we now have apps for many of our services, something that we never had before. That raises the question of how we channel this technology into our regulatory world, making sure that we are driving the technology in the direction we want it to go.

Some view EPA as sort of a helicopter parent to the states. Sometimes it’s a matter of letting our children grow up and understanding that these programs have matured. Many of these programs have delivered the outcomes that we originally sought. They’ve now graduated from college, many of them have jobs, they have their own children.

Looking at a case in Arkansas, we have regulations that declare that if you get a handful of water samples from a stream with a certain percentage of pollutants, then we will do something about it. Now we have monitors that take samples every 30 seconds and we’re trying to apply that data against a standard that used to be based on a set of eight samples over two seasons. Are the problems we are seeing today really an indication of a natural problem or is it just an indication that we know a lot more?

Stan Meiburg: Bob Martineau has been the commissioner of the Tennessee Department of Environment and Conservation since 2011. Bob is a past president of ECOS and worked in EPA’s Office of General Counsel.

Bob Martineau: Given limited resources, we don’t want to duplicate efforts. We shouldn’t be doing the same thing twice and checking every little bit of homework. So, how do we divide and conquer our limited resources and continue to build the federal-state relationship? It is important to keep in mind that first and foremost, it’s about environmental outcomes.

What we’re talking about in cooperative federalism is really that relationship of how, not necessarily the what. As to the what, as a general principle, people will agree we should breathe clean air and should have access to clean water. We may debate whether the standard ought to be so many parts per billion or that many parts per billion, but at the end of the day, the public wants to know if their air is clean, if their water is safe to drink, if the land around their house and their local school is safe to play on. How do we continue to prosper economically while ensuring that we have those?

A lot of people used to bristle at the term “co-regulator.” The common understanding is that states are not just another external stakeholder in the environmental regulatory enterprise; they are partners. We can’t develop a set of regulatory principles without looking at how they are going to be implemented in the field. The states, which are doing 90 percent or so of that implementation, need to think about the environmental outcomes we seek.

If we look at how cooperative federalism relates we have to differentiate between the regulatory side and the program implementation side and the enforcement side. States need flexibility to achieve their goals. At the same time, there are local, state, cross-state, and even international impacts to what happens in a particular state.

As we set air quality standards, such as new source performance standards, or water quality standards, we need to ensure that we have a race to the top, recognizing there is huge political pressure and economic pressure on given states to site that new plant.

So, as we frame that debate and add in private environmental governance, we can see that many people are making these decisions independent of any regulatory construct. Their shareholders are demanding it. Their customers are demanding it. Companies like Walmart have said, “We want X percentage of our energy to be renewable by a date certain.” Leadership in companies are driving marketplace decisionmaking regardless of what the regulatory requirements are.

Stan Meiburg: Vickie Patton is the general counsel of the Environmental Defense Fund and manages the organization’s national and regional clean air programs. Before coming to EDF, she worked as an attorney for EPA.

Vickie Patton: In my experience, there is no cookie-cutter approach to cooperative federalism. In fact, those people who have done this work for a long time find different ways to engage in problem-solving. As a result, we have made tremendous progress.

I’d like to make a few points. First, the “what” matters. What are we trying to achieve? It’s hard to have a debate about the “how” if we don’t have a shared understanding of the what. My view is the what ought to be delivering ambitious public health and environmental outcomes, while making continuous progress. We need to commit ourselves to what the American people expect, so that all communities benefit, especially those that have for far too long suffered a heavy burden of public health and environmental harms.

We can’t shy away from the most important challenge of our time, climate change. Support for climate action is at a zenith. In my own home state of Colorado we’re delivering cleaner energy, saving customers money, putting wind turbines in parts of rural Colorado that are keeping families on their farms. We’re manufacturing those turbines in rural parts of Colorado like Windsor and Pueblo that are gaining shared prosperity from this vibrant clean energy economy. Let’s roll up our sleeves and make sure that climate change is a critical part of this dialogue.

We’ve got to win the public trust. Whenever these discussions start, people are skeptical about where it is all headed, what the objectives really are. We’ve got to reach out to the public and commit to the highest levels of transparency and really inclusive dialogue. We’ve got to be thinking about adaptive federalism.

Finally, how do we create, collectively and individually, the platforms that recognize the environmental and public health outcomes that we need? How do we reward innovation that actually achieves more protective results? How do we create the platforms that reward inclusive dialogues and partnerships so that all across all the different levels of government and policymaking, public and private, we’re sending all of those right signals? There are a lot of people who are working together finding ways to deliver these kinds of results. It is good news, and America needs a little bit of good news.

Stan Meiburg: Several of you talked about how the nature of the relationship may have changed between federal and state environmental authorities. That poses a related question. Is the division of authority in the environmental space a zero-sum game? Does one have to go down for the other to go up?

Becky Keogh: We don’t want to have 50 states doing 50 different things. It makes sense to act collectively — we see that in regional groups and in national groups. It is best not deciding that one entity is better than the other to take on a certain responsibility but to instead discern which has the “most value-added methodology,” as my governor would say, to get the outcome that we need in our communities. One of the times I rely on EPA is the type of emergency where I need scientific capabilities that go beyond my state laboratory.

Bob Martineau: It isn’t a zero-sum game. The challenge has been avoiding duplication of effort and to decide what sovereign can act most efficiently. And then there are a whole bunch of things we haven’t been able to tackle because we haven’t shifted some of those resources to take on those new challenges. The debate today is the most efficient allocation of resources — how do we efficiently do the basic blocking and tackling, and then what resources can either the state provide or the federal government to take on new challenges.

Stan Meiburg: There are calls for statutory change to fully realize the potential for stronger state-federal relationships. Do any of you think that we need new law for this purpose?

Neal Kemkar: I’ll start with a short answer here — I hope not, because this issue is way too important to rely on Congress, a broken institution. What we have already is years of delegated authority to the federal executive branch from Congresses past. We have a lot of collective expertise. And when you add in our friends in the NGO community as well as in the regulated community, a lot of folks have been thinking about these issues for a long time. It goes back to resource allocation and using the existing authorities in smarter ways.

Barry Hill: You know, a lot depends upon where you sit as it relates to this whole area of environmental law and policy. I’m thinking in terms of communities where they are asking, Is the air clean? Is the water safe to drink? What about communities where the answer is “no” to everything? So, what would you prefer? Would you prefer the federal government, the strong arm of the federal government, or would you prefer that states do it — states are 50 laboratories of democracy but how do you define democracy? How do you ensure environmental justice for all not as a theory but as a practical matter? It’s not just the ederal government, it’s not just the state government, it’s not just corporations. It’s communities. How are they being impacted? That is the central question in the federal-state relationship.

Vickie Patton: There is ample room within existing law for people to improve upon achieving public health and environmental outcomes, while thinking about what sort of partnerships will help and how to most effectively achieve society’s goals. There are many people who have a lot of experience within the framework of existing law, finding all sorts of innovative ways to move forward.

Becky Keogh: And I would just add perhaps not statutory change at the federal level. Some of the state statutes, a lot of us are looking at opening up old statutes where they haven’t been refreshed. That’s something we’re doing in Arkansas. Other states have done the same. We haven’t just invested in the regulation or the statute for their own sake. We are spending a lot of time as we look at our programs through the lens of lean processes to make sure we don’t lose the core value of what we do as we speed up and we become more efficient and hopefully spend less money in delivering those outcomes.

Stan Meiburg: What do you see from your particular vantage point as the greatest challenge to implementing collaborative federalism?

Bob Martineau: The perception is that cooperative federalism means weakening environmental standards. That’s not what it is. But it’s caught up in the anti-regulatory mindset that we don’t want to over-regulate — it’s hindering business, it’s killing jobs. We’ve got to get agreement on the goals and maybe if we’re not there on that, about what the outcomes are. We need to have that debate first because then the question is how. There’s maybe less consensus on some of the goals now than we’ve had historically.

Back to the last question of reopening the statutes: what’s happened sometimes with the various amendments to the statutes over the years is that they have become more prescriptive. The idea was to set the goal, a maximum, for example, and let the states figure out how to achieve that max. Instead, each time the Clean Air Act was amended, it became much more prescriptive as to what had to be in that State Implementation Plan. So, those statutory provisions can be used as swords or shields as well.

The challenge of federalism is to agree on the basic goals, and then we need the trust to be less prescriptive on the day-to-day review of what the other entity is doing.

Vickie Patton: If there’s not a shared vision that we are seeking better public health outcomes and greater justice for the communities that have borne the burden of harmful impacts for far too long and meanwhile combating climate change — those are core central underpinning considerations — then I think there will be enormous public distrust.

There is another disruptor coming to the architecture of environmental law and policy and that is that every person is going to have a monitor in their pocket. The technology is already here. In the aftermath of Hurricane Harvey, EPA’s and Texas’s monitors were idled but Environmental Defense Fund deployed a lab-quality mobile monitor, communicating what we were finding to policymakers and the public. Think about a world where the parents in Flint had the easy ability to detect the lead in their water. Technology is going to be a game changer in holding all of us accountable.

Neal Kemkar: Vickie, that’s a great point. To me, the radical transparency that’s coming because of increased digitization and more people having more information, that’s the biggest challenge and opportunity to this Cooperative Federalism 2.0. I think back to my time working for the secretary of the interior during the oil spill, every night during the nightly news you had radical transparency of the oil flow real time. That changes the dynamic of the regulation. It makes the feds tend to be be more prescriptive, for example, “Well, no. Thou shalt have 2.15 blind shear rams on your blowout preventer,” or whatever.

With all this transparency, the challenge is going to be getting the balance right. So, one can imagine a world where people on an airplane are saying, “I want to know exactly the carbon output of this flight” so they can offset it. Or a corporate official saying, “I want to know the carbon footprint of my entire supply chain and I want to know it now.” And so, as we wrestle between the state and the federal control, we may be overtaken by events.

Bob Martineau: And it’s not only the transparency but it’s the 24-hour news cycle, it’s the instant information. Twenty years ago, you took a water sample and the results came back a month later. Today, you’ve got to have that answer two hours from now. People want to know, Can I drink the water? Can I walk outside if there’s an air incident? Do I need to evacuate? You can’t say, “We’re going to look at it and get back to you after we send this off to a lab on the other side of the country and we’ll write a report that’ll get edited by 38 people and you’ll see it in three months.” That’s not acceptable.

Becky Keogh: I recall working with city leaders in Little Rock on ozone. We were right below the standard, and some people believed things needed to be proactively addressed. And someone said, “Is it safe to breathe the air?” And to be frank, I don’t think our regulatory framework is set up to be instantaneous in response.

Barry Hill: Millennials and many corporations are very much concerned about climate change, and they are making decisions based on their concern. Why isn’t the federal leadership listening to the voices of all of these entities? And will it be better at the state level? And how does this administration talk to a state like California that’s very progressive as it relates to the issue of climate change? The biggest impediment is listening to the voices of all of the stakeholders, whoever they may be.

Audience question: The one thing I didn’t hear from the panel is where does the conversation restart. Because the conversation that we used to have very constructively since I grew up has broken down. We look at our two major parties and they not only aren’t really effectively talking to each other but the Republicans aren’t even talking effectively to themselves, and it’s not certain that the Democrats are doing that either.

One of the advantages of a federal system, if one is going to make one work, is that it has 50 laboratories with their sub-laboratories where experimentation in dealing with these questions can be going on, and if we had a system for articulating that up to the national level, that could be part of the solution.

However, our federalism has never really worked all that well from the get-go and it started with the fact that the Founders, for all the wonderful things they did, did not really grapple effectively with the question of states’ rights. And it’s understandable they didn’t because it all started with the states, they had the power, they had to be convinced even to allow a federal structure to emerge. And that’s plagued us all along.

My final lament is that when you look to the states at present, I don’t know where to look for a model. You can take on the one hand California, which became dysfunctional in its governance before the country did, and they’ve now become a lot more functional but they’ve done it mainly because the Republicans have taken themselves out of the conversation and the Democrats are bound and determined to keep them there if they can. Or you can look at Kansas, which has been working with a terrible model for eight years now, it’s been proven not to work, and a few people in the state are beginning to wake up to that but the people keep re-electing their government.

Vickie Patton: My only comment is that you’ve got a conversation happening right here. It’s up to all of us to have these conversations wherever we work. It’s a real challenge in this polarized world not to let ourselves just fall into a trap. We have to focus on what compels us to do this work, why we care about it, and find a way to have conversations that are uncomfortable with people that may not share our ideas and try to find common ground.

Stan Meiburg: Several of you talked about the potential of big data to be disruptive. I’d like to ask how — in your individual states or your companies or NGOs — are you looking at this challenge.

Vickie Patton: It’s a terrific opportunity. We have seen the impact of big data and advanced monitoring techniques in a bunch of different contexts. When you think about the recognition that there’s significant venting and leaking from oil and gas facilities, big data and monitoring have had a huge public health and environmental impact by revealing this serious pollution problem — making it far more salient. And advances in monitoring that have helped reveal this oil- and gasrelated pollution to the public and to policymakers have also catalyzed the deployment of solutions and policies that are sprinting to catch up.

We have a need to be really responsible with the information, but it does provide a tremendous opportunity to empower policymakers, private companies, and the public to improve public health and environmental outcomes. It’s a critical part of the next wave of environmental protections.

Becky Keogh: Our challenge will not be the data anymore. It will be the wisdom to know what data to actually base decisions on. Smart systems are not valuable if you’re not wise in how you use them. We have to make sure that we build credibility in those datasets so we can have frank and honest discussions about whether action is necessary or not.

Bob Martineau: I think big data has two aspects we need to consider. Consumers start asking how many kilowatts of electricity do you use to make your product, do you recycle, how much clean energy do you use in your process, because people will weigh that in their consumer purchasing decisions and who they invest in.

On the other side, there is the pressure of the 24-hour news cycle. Let’s say there is a pipe rupture or a discharge incident. As the media cover it, it’s really going to be incumbent on the public to educate themselves on how to manage that data, and sometimes an initial piece of information may be a valid indicator but it may not be. Suddenly there’s a huge public health crisis that turns out to be a lab sampling error.

Transparency is good. You want to be able to respond if there is a public health emergency. You don’t want to wait 30 days to find out you need to do something.

Becky Keogh: And I’ll add to that. The benefit of big data and technology is in a political world, as an engineer, and I speak to politicians all the time in our legislature, data generally will compel an answer. And so, you can depoliticize the conversation with data if you use it appropriately. You can remove the politics when you actually have facts, right? It also provides a bit of equality or perhaps addresses inequality in systems because now you have the information to show where those inequities exist and you can actually act on them.

Neal Kemkar: The good news for all of us is that there is a fierce competition going on in America’s boardrooms in the space of big data and advanced analytics, and the power of American innovation has been unleashed on this particular issue. We have what we call our new digital wind farms, which through both hardware and software — through improved asset performance — you’re able to operate 20 percent more efficiently, save about $100 million per farm.

And to take a different context, from the oil and gas space, the way we used to inspect pipelines, hydrostatic testing, you pressurized the pipe to see if it blew. Now we can use MRI technology on a “smart pig” that we run through the pipe to take a scan instead. You can imagine the environmental implications of that, when the regulations catch up. Similarly, for the outside of the pipe we can use drones to inspect 10 times faster at one tenth of the cost.

So when we’re talking about environmental regulation, let’s not just think of the statutes that we all grew up with and took in our environmental law survey classes but let’s think of brand new greenfield spaces, like how do we set the right framework for unmanned air systems so that when the commercial and technological ability to inspect a 400-mile pipeline via drone is there, that the regulations are in place to allow it.

Audience question: Josh Heltzer, First Environment. I’m just curious as to what the relationship is between the Environmental Council of the States, the National Governors Association, and, say, U.S. EPA or the federal government? Is there an interface among those organizations, either in an informal or formal manner?

Becky Keogh: ECOS evolved from the National Governors Association, and we continue to work with NGA on a number of initiatives. We also are working very closely with EPA. That was the intent of the Cooperative Federalism 2.0 paper, to provide information we thought would be helpful to define a road forward with the idea that we weren’t going to dictate the path nor would the federal government dictate it.

To your question, all that dialogue is important, and obviously one of the bases of ECOS is that as much as states are alike we are different. So our goal as an organization is to find our common issues and be able to advance those appropriately, allowing the governors and EPA to work with states to respect their needs — even if they don’t necessarily agree with my state or my governor’s perspective.

Stan Meiburg: And I would just note, to put on my old hat for just a minute, that this is not a partisan question because that kind of collaboration has been going on for a long time. When I was at EPA, Commissioner Thomas Burack of the New Hampshire Department of Environmental Services and I advanced collaborative federalism through E-Enterprise. That dialogue is going on pretty robustly.

Becky Keogh: I think states understand that to have the authority or trust or independence, there’s also accountability. We are working with our governors and with the federal EPA about how do we communicate our accountability to achieve agreedon outcomes.

Audience question: Just following on Neal’s point, I think it’s really interesting that this is the Environmental Law Institute, and lawyers base everything on precedent. The question came up earlier about whether you see any need for statutory change. I’ll just note most of our great environmental statutes were born out of crises. The crisis in Bhopal, India, helped lead to the Toxics Release Inventory and the Superfund Amendments and Reauthorization Act. You had Love Canal that led to CERCLA.

But we don’t tend to pass new laws anymore to address big problems. We might look to the states as being labs and yet the way cooperative federalism is set up, the state statutes tend to mirror the federal environmental statutes, and if a state gets out in front, then they’re put at a business disadvantage.

Stan Meiburg: Historically the worry about states was that somehow that if the federal oversight were not there, that the state would lag behind. It is going to be very interesting about what the response is now in the case where a state may move ahead — and I am thinking about California — and how the response to that is going to fit into the federalism framework.

At this time, let me not just summarize this panel but just make a couple of points.

One is that you’ve heard a lot of very innovative and thoughtful discussion about the potential effects of big data and technology and the 24-hour news cycle and what you might call hyper-transparency, and that these have both the potential to be quite disruptive in the way in which the federal-state relationship has worked, but there are opportunities involved as well, and that’s going to be a challenge in the years ahead.

I also wanted to make an observation pointing back to the comments about federal laws. They were very prescriptive and written that way for a couple of reasons, one of which was in the era in which they were created, there was a great deal of distrust between the legislative and the executive branch, and the legislative branch felt that if they did not make the laws very prescriptive that the executive branch would not implement and enforce them. So, that the issue of trust is there.

There was also a great deal of concern in public policy theory that without very prescriptive laws, that the agencies in charge with implementing them, and specifically EPA and the states’ agencies, would be captured by the entities that they regulated.

The idea of capture may seem like an antiquated notion these days, but the distrust became embedded in the very specificity of the statute, rightly and wrongly, and the problem with that of course is that if you have a very rigid statute and you don’t change it very much, like anything else, it can get a little long in the tooth.

Also, just simply note to close out that the answer to the question I asked about whether it is a zero-sum game, I was delighted to hear that nobody said it is. For the states to be strong, it’s not like the federal government has to be weak or vice versa. What you’d really like in an environmental system is two strong partners working effectively to produce environmental results.

And to pick up on the point that Vickie made, one of the challenges we face, the big challenge, is if we do not have some way of discussing and coming to a reasonable agreement on goals, then the discussion about means becomes even more difficult.

It is worth remembering that the Founders in the framing of the Constitution were not really concerned about producing efficient government. The fear on the part of the framers was that you would have tyrannical government, and so therefore, the effort was to produce moderate government — which is why you ended up with federalism structures and the separation of powers in the first place.

In an era in which things seem to happen in a 24-hour news cycle, this can sometimes produce great frustration. But it is probably worth recognizing that there may be some wisdom in not being able to react immediately to everything that comes right down the pike. TEF

HEADNOTE ❧ Over the decades, states have developed the expertise and capacity for ensuring environmental protection. With the Trump administration’s proposed downsizing of EPA’s budget and staffing and renewed focus on states, decisionmakers and stakeholders have a timely opportunity to rethink the paradigm of cooperative federalism and environmental protection.

The Debate What Can Trump Do to Foster Environmental Justice?
Author
Maite Arce - Hispanic Access Foundation
Lisa Garcia - Earthjustice
Sharon Lerner - The Intercept
Vernice Miller-Travis - SKEO Solutons Inc.
Suzi Ruhl - Environmental Protection Agency
Benjamin Wilson - Beveridge & Diamond, P.C.
Hispanic Access Foundation
Earthjustice
The Intercept
SKEO Solutons Inc.
Environmental Protection Agency
Beveridge & Diamond, P.C.
Current Issue
November-December 2017
Issue
6
The Debate What Can Trump Do to Foster Environmental Justice?

HEADNOTE ❧ We asked a panel of experts, and then the hurricanes hit, exposing the vulnerability of poor and minority populations in Texas, Florida, the Virgin Islands, and Puerto Rico. Is there a greater role for the executive branch to play to ensure environmental equity in what has been called the civil rights issue of the 21st century?

Blight Revitalization Initiative for Green, Healthy Towns

ELI’s Blight Revitalization Initiative for Green, Healthy Towns (BRIGHT) identifies corridors of blighted, vacant, and environmentally-impaired properties in overburdened communities and supports the community and municipality in developing a revitalization plan. Combining community-level engagement with organizational and financial support from the private sector, government, and NGOs, BRIGHT catalyzes:

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