Policy commentary

The Political Economy of Environmental Justice

May 25, 2009 | H. Spencer Banzhaf

Welcome to the RFF Weekly Policy Commentary, which is meant to provide an easy way to learn about important policy issues related to environmental, natural resource, energy, urban, and public health problems.

Poor people and minorities are more likely to live in neighborhoods at greater risk of environmental hazards. In this week's commentary, Spencer Banzhaf discusses to what extent, if any, public policy intervention might be warranted on the grounds of environmental justice and, if so, what form such interventions should take.

Land fill

Over the years, the hard evidence, both documentary and academic, has shown convincingly that poor people and minorities are more likely than other groups to live in polluted neighborhoods. This pattern has been found again and again, in numerous places and with all sorts of pollutants. For example, disadvantaged groups live closer to hazardous waste facilities and landfills, live closer to large air polluters, and live in communities with higher measures of air pollution.

These findings have sparked the "environmental justice" movement, which has had mixed success in pushing its agenda. At the federal level, it won an important victory when President Clinton issued Executive Order 12898. Still in force, the order requires nondiscrimination in federal environmental programs and focuses federal resources on low-income and minority communities. However, the movement has failed to see an environmental justice act passed in Congress, though several have been introduced. It has also been rebuffed in its pursuit of legal action in federal courts under the Civil Rights Act. But other victories have come at the local level. Stakeholders have won a bigger voice in the approval process for new polluting facilities. And in one prominent case, local activists forced California's Southeast Air Quality Management District to settle a suit over the geographic distribution of pollution under its pollution trading program.


 Spencer Banzhaf
Spencer Banzhaf
is an associate professor of economics at Georgia State University and a faculty research fellow at the National Bureau of Economic Research. His research focuses on the interactions between local environmental quality, real estate markets, and demographics. He also studies the history of economic thought. Prior to joining GSU, Banzhaf was a fellow at Resources for the Future. He received his PhD from Duke University in 2001.


Sources of Environmental Inequity

But before prescribing any remedies for environmental inequity, it is essential that we understand the social mechanisms underlying it. Such mechanisms determine the nature and locus of any injustice, how a policy affects the distribution of pollution across places and population groups, and who bears the costs and who reaps the benefits of cleanups.

Consider just three of the most likely sources of the disproportionate pollution burden borne by disadvantaged groups. First, disadvantaged groups have less political power. Consequently, they may be less successful at lobbying government agencies to block polluting facilities in their neighborhoods. Likewise, they may be less successful at pressuring such agencies to monitor existing facilities for compliance with environmental regulations. Closing the circle, polluting firms therefore may seek out such communities for the very reason that they know they will not be scrutinized so closely. There is some evidence for this mechanism, with pollution increasing in areas with lower voter turnout. If the correlation between pollution and demographics lies in these mechanisms, then it arises from government failures. In this case, either governmental reforms are required—or alternatively, nongovernmental mechanisms for determining pollution patterns should be considered.

Second, disadvantaged groups may live in more polluted areas for the simple reason that to be poor means not having the resources to "purchase" the good things in life—including a clean environment. By that I mean the ability to buy or rent a house or apartment in a clean neighborhood, which will be more expensive than one in a polluted neighborhood. The rich can afford to pay this premium while the poor cannot. In other words, firms may make their polluting decisions based on factors that have nothing whatsoever to do with local demographics, yet households will move in such a way that the poor end up living nearer pollution. In this case, the source of environmental inequity is the more fundamental inequity in the distribution of income.

But this mechanism has an important implication: the observed demographic patterns arise from decisions that individuals have made to make the best use of their limited resources. Saving money for food and clothing through inexpensive housing may be a higher priority for the poor than a clean environment. A cleanup may cause a neighborhood to gentrify, increasing housing prices. While this represents a capital gain to owners, 83 percent of people poor enough to qualify for welfare are renters. For them, these costs are out of their pocket, and can make the poor worse off in the end. In effect, the cleanup often forces the poor to pay a price they cannot afford.

A third and final mechanism may be that some communities have features that are attractive to both disadvantaged households and polluting firms. For example, both may be attracted to lower real estate prices. Moreover, real estate prices may be lower near transportation corridors like highways or railroads. The poor live near them because of these lower costs; polluting facilities may locate near them because the transportation route reduces the cost of moving manufactured goods or wastes. And finally, both poorer households and polluting facilities may be mutually attracted by low-skilled labor markets. In this case, the correlation between pollution and disadvantaged groups again arises from the simple fact that these groups have lower incomes. The effect is reinforced by the unhappy coincidence that some features of the inexpensive communities affordable for the poor are actually attractive to polluters.

Avoiding Unintended Consequences

For existing cleanup efforts such as the Superfund and brownfields programs, these mechanisms suggest guidelines that can help minimize unintended consequences like gentrification. Two recommendations stand out. First, as emphasized by the National Environmental Justice Advisory Council, projects should involve local participation. This will increase the likelihood that new amenities fit the preferences of incumbent residents rather than those of prospective gentrifiers. Second, projects might prioritize areas with high rates of home ownership, where local residents will capture the full value of the cleanup.

But there is a larger point at stake. When experiencing poor environmental quality is a consequence, rather than a cause, of poverty, then cleaning up the environment to help the poor is like treating the symptom rather than the disease. Some symptoms, like a moderate fever, represent the body's best efforts to heal itself. In such cases, treating the symptom may actually be counterproductive. This does not mean there is no role for a physician. But the best physician facilitates the body's natural healing processes. Like the body, the market is a remarkably efficient machine.

Accordingly, the best way to help disadvantaged groups may be to empower them, strengthening their position within the market system. Redistributing income to the poor, for example, would provide them with more resources to pay for those things they most want, including a cleaner environment. Encouraging home ownership would put more people in a position to truly benefit from neighborhood improvements such as environmental cleanups. Providing legal aid, facilitating conflict resolution, and otherwise helping poor residents in environmental disputes can help the legal bargaining process to function better and enable the poor to participate in it fully. These may be the more effective routes for helping the poor—and prove to have "win, win" outcomes for society.

Further Reading:


Banzhaf, H. Spencer. 2008. Environmental Justice: Opportunities ThroughMarkets.  PERC Policy Series No. 42.

Banzhaf, H. Spencer and Eleanor McCormick. 2006. Moving Beyond Cleanup: Identifying the Crucibles of Environmental Gentrification. National Center for Environmental Economics Working Paper 07-02.

Been, Vicki. 1994. Locally Undesirable Land Uses in Minority Neighborhoods: Disproportionate Siting or Market Dynamics? Yale Law Journal 103: 1383–1422.

Bullard, Robert D. 1990. Dumping in Dixie: Race, Class, and Environmental Quality. Boulder, CO: Westview Press.

Foster, Sheila. 1998. Justice from the Ground up: Distributive Inequities, Grassroots Resistance, and the Transformative Politics of the Environmental Justice Movement. California Law Review 86: 775–841.

Hamilton, James T. 1995. Testing for Environmental Racism: Prejudice, Profits, Political Power? Journal of Policy Analysis and Management 14: 107–132.

National Environmental Justice Advisory Council. 2006. Unintended Impacts of Redevelopment and Revitalization Efforts in Five Environmental Justice Communities.

United Church of Christ. 2007. Toxic Wastes and Race at Twenty: 1987–2007.




Views expressed are those of the author.
RFF does not take institutional positions on legislative or policy questions.

The views expressed do not necessarily represent those of U.S. Environmental Protection Agency or other federal entities.

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