An Earth Day Addendum: Environmental Justice and the Poor
Editors are a central scourge of mankind, imposing length limits guaranteed to hollow out a finely-crafted argument. And the renowned editors of RealClear Energy? A fortiori: they are merciless.
I kid, of course. But in my RCE column on Earth Day 2025, one of the issues that I left on the cutting room floor is that of “environmental justice,” an empty nostrum devoid of rigorous definition but supremely useful to the proponents of left-wing environmentalism in terms of acquiring funding from various foundations, from government, and from private donors either naïve or engaged in classic virtue signaling.
As I discussed in my earlier column, the central Earth Day policy proposal this year is a tripling of renewable power (primarily wind and solar) generation globally by 2030, an insane idea environmentally destructive, fantastically expensive, and guaranteed to yield economic growth and employment impacts massively adverse. The Earth Day proponents continue to assert that wind and solar power are “cheap,” an exercise in political propaganda that shunts aside both the need for massive subsidies to keep the wind and solar power industries afloat and the attendant actual effects on household budgets.
That the heavily-subsidized expansion of wind and solar power increases electricity costs is incontrovertible; it is no accident, as Pravda used to put it, that California has the highest power prices among the lower 48 states, almost double the average for the U.S. as a whole. Accordingly, let us ask the question that the Earth Day proponents avoid at all costs: Across U.S. income quintiles, whom would be harmed the most by such increases in the price of electricity?
The Bureau of Labor Statistics in its Consumer Expenditure Survey reports the following shares of before-tax household income spent on electricity for all households, the lowest income quintile, the second, third, and fourth quintiles, and the highest. The respective percentages: 2.3 percent, 3.7 percent, 3.2 percent, 2.7 percent, 2.2 percent, and 1.6 percent.
Translation: The expansion of renewable power is hugely expensive, it increases the price of electricity, the poor spend a higher percentage of their incomes on power, and so the overall effect would be highly regressive. So much for “environmental justice” as a purported concern of the environmental left.
It is useful to consider more rigorously what “environmental justice” actually means; it typically is defined (e.g., p. 33247) in terms of differing levels of environmental quality experienced by various groups, the poor and minority groups in particular.
That concept is much too narrow. The level of environmental quality experienced (or “consumed”) by a given individual or household is one component of “health” broadly defined. It is clear from the scholarly literature that “health” is a “normal” good, that is, one the consumption of which rises with income or wealth. This is true for individuals and for economies as a whole. Lower-income individuals and households, precisely because their incomes are lower, consume less environmental quality, lower-quality diets, lead less-healthful lifestyles, ad infinitum.
Therefore, it is unsurprising that lower-income individuals and households tend to be located in areas with lower environmental quality; that is what they can afford. This is a reality regardless of the impacts of differences in environmental quality on “health,” that is, mortality and morbidity. Even if a lower level of environmental quality is merely unpleasant, that is a factor relevant to the ways in which individuals and households allocate their limited resources.
Accordingly, the “environmental justice” issue is little more than the observation, or complaint, that the poor consume less environmental quality than others, that is, that they choose to allocate their resources in ways different from those exhibited by individuals and households wealthier.
And so the definition of “environmental justice” is elusive. There is the classic endowment problem — individuals enter life with very different endowments of human and financial capital — an obvious reality central to the “fairness” and “equity” question, but not a parameter clearly malleable by regulatory policy or, a fortiori, the exhortations from the Earth Day crowd. One central long-term policy initiative by government intended (in part) to deal with the endowment problem is public education, but the low relative quality of public schools in low-income and minority areas illustrates the difficulty of using public policies to change “justice” outcomes in specific directions, because public policies inexorably are politicized.
Efforts by government to effect changes in the distribution of income or wealth necessarily affect resource allocation in ways reducing aggregate productivity. Perhaps a given change in “distributional fairness” and “equity” is worth the attendant reduction in aggregate wealth; perhaps not. There is no “objective” measure of this tradeoff because we do not have an efficiency theory of — a rigorous way to evaluate — the relative virtues of different distributional outcome.
Have the Earth Day proponents thought about any of this carefully? The question answers itself.
Benjamin Zycher is a senior fellow at the American Enterprise Institute.