Carbon trading, co-pollutants, and environmental equity: Evidence from California's cap-and-trade program (2011-2015)

Abstract

Background: Policies to mitigate climate change by reducing greenhouse gas (GHG) emissions can yield public health benefits by also reducing emissions of hazardous co-pollutants, such as air toxics and particulate matter. Socioeconomically disadvantaged communities are typically disproportionately exposed to air pollutants, and therefore climate policy could also potentially reduce these environmental inequities. We sought to explore potential social disparities in GHG and co-pollutant emissions under an existing carbon trading program-the dominant approach to GHG regulation in the US and globally.

Methods and findings: We examined the relationship between multiple measures of neighborhood disadvantage and the location of GHG and co-pollutant emissions from facilities regulated under California's cap-and-trade program-the world's fourth largest operational carbon trading program. We examined temporal patterns in annual average emissions of GHGs, particulate matter (PM2.5), nitrogen oxides, sulfur oxides, volatile organic compounds, and air toxics before (January 1, 2011-December 31, 2012) and after (January 1, 2013-December 31, 2015) the initiation of carbon trading. We found that facilities regulated under California's cap-and-trade program are disproportionately located in economically disadvantaged neighborhoods with higher proportions of residents of color, and that the quantities of co-pollutant emissions from these facilities were correlated with GHG emissions through time. Moreover, the majority (52%) of regulated facilities reported higher annual average local (in-state) GHG emissions since the initiation of trading. Neighborhoods that experienced increases in annual average GHG and co-pollutant emissions from regulated facilities nearby after trading began had higher proportions of people of color and poor, less educated, and linguistically isolated residents, compared to neighborhoods that experienced decreases in GHGs. These study results reflect preliminary emissions and social equity patterns of the first 3 years of California's cap-and-trade program for which data are available. Due to data limitations, this analysis did not assess the emissions and equity implications of GHG reductions from transportation-related emission sources. Future emission patterns may shift, due to changes in industrial production decisions and policy initiatives that further incentivize local GHG and co-pollutant reductions in disadvantaged communities.

Conclusions: To our knowledge, this is the first study to examine social disparities in GHG and co-pollutant emissions under an existing carbon trading program. Our results indicate that, thus far, California's cap-and-trade program has not yielded improvements in environmental equity with respect to health-damaging co-pollutant emissions. This could change, however, as the cap on GHG emissions is gradually lowered in the future. The incorporation of additional policy and regulatory elements that incentivize more local emission reductions in disadvantaged communities could enhance the local air quality and environmental equity benefits of California's climate change mitigation efforts.

Fig 1. Disadvantaged neighborhoods host a disproportionate number of facilities covered by California’s cap-and-trade program.

Facilities were assigned to neighborhoods (census block groups) if they were located within them or within 2.5 miles of the geographic block group centroid of nearby block groups. Neighborhoods were compared based on their (A) racial/ethnic composition using American Community Survey 2011–2015 5-year estimates and (B) community disadvantage (includes block groups within the highest scoring 25% of census tracts based on CalEnviroScreen 3.0 score [31]) (n = 322 facilities; 38,066,920 residents; 23,190 US Census block groups). BG, census block group; GHG, greenhouse gas.

Fig 2. Changes in annual average greenhouse gas emissions within California after implementation of the state’s cap-and-trade program.

Facility emissions 3 years after carbon trading began (2013–2015) are compared to those from the 2 years prior to the initiation of trading (2011–2012). Due to differences in accounting, comparable emission estimates are not available prior to 2011. n = number of facilities in each industry sector. t CO_2e, metric tons CO₂ equivalent.

Fig 3. Mean percent change and 95% confidence interval of co-pollutant emissions per 1% change in greenhouse gas emissions.

Estimates were obtained from a mixed effects regression model of annual panel (longitudinal) data from 2011–2015 with a random intercept and random slope for facility. N’s for each pollutant category refer to the number of facilities. PM2.5, particulate matter <2.5 micrometers; NO_x, nitrogen oxides; SO_x, sulfur oxides; VOC, volatile organic compound.