Massachusetts’s New ‘Community Climate Bank’ Tackles Green Affordable Housing

Massachusetts is taking a step forward in its fight against climate change. This past summer, Massachusetts Governor Healey announced the creation of the Commonwealth’s Community Climate Bank. Unlike other state climate banks, Massachusetts is limited to fueling investment in affordable housing and energy efficiency. The bank will utilize public and private investments to set up a revolving loan fund that provides low-interest, low-risk loans for green building and renovation projects. Potential projects include anything from community solar projects and EV charging stations to deep energy retrofits (e.g., heat pumps, insulation measures, high-efficiency appliances).

Climate/green banks operate with both public and private funding, which allows them to overcome budgetary limitations characteristic of conventional state agency programs. Public funding is funneled into the venture first to set up the operation and attract private capital, which sustains the banks in the long run. The Massachusetts Community Climate Bank will commence operations with $50 million in seed funding from the Department of Environmental Protection. It is also set up to take advantage of unprecedented federal funding available through Inflation Reduction Act (IRA) grants and tax credits. The IRA is expected to allocate $20 billion to establish a national green bank and another $7 billion to state banks.

In addition to public funds, the Massachusetts Community Climate Bank stands to attract and take advantage of private funding. Traditionally, private capital has been hesitant to invest in renewable energy and environmental infrastructure due to high risks compared to other industries. Green banks attract private investors by decreasing perceived risks using financial tools such as aggregation and securitization of assets, as well as credit enhancement schemes. These strategies enable banks to attract large investors that have low-risk tolerance and require a large minimum investment.

Green banks provide governments with a valuable opportunity to accelerate investment in climate and energy infrastructure and programs and meet their emissions reduction targets. In the past decade, operational green banks have demonstrated success in mobilizing significant funding.

While Massachusetts’s decision to prioritize affordable housing decarbonization is unprecedented and interesting, is not surprising. Within the state, the residential sector (excluding electric use) accounts for 19 percent of the Commonwealth’s greenhouse gas emissions, and this figure is much higher (70 percent) for environmental justice communities. As a result, Massachusetts has been working on steadily decarbonizing the sector by focusing on energy efficiency measures and electrification of home heating. Over the last decade, it has cemented itself as a leader in energy efficiency through its Mass Save program. The Community Climate Bank will facilitate this work with an increased focus on creating affordable, energy-efficient housing to lessen the inequitable energy burden faced by low-income households.

Low-income households spend more on housing in proportion to their income than higher-income households. This also applies to energy costs—low-income households spend more on household energy costs. In Massachusetts, the average energy burden for a low-income household is about 10 percent; this figure can be as high as 31 percent in certain neighborhoods. In contrast, the average household energy burden for all income groups within the Commonwealth is 3 percent. Studies have shown that as the effects of climate change intensify, such as hotter summers, so will the need for increased energy demand to keep places livable. The energy burden for low-income households is expected to rise.

Developing energy-efficient affordable housing and providing retrofits to make already existing homes more energy-efficient are effective ways to address the energy burden in low-income households. For instance, using more energy-efficient air conditioning systems can reduce cooling consumption by up to 70 percent in low-income households thereby decreasing their overall energy burden. The Massachusetts Community Climate Banks’s affordable housing decarbonization focus positions the state to not only drastically reduce its carbon emissions but also tackle social inequity.

One potential development to remain cautious of is the possibility of green gentrification. The bank’s investments in housing decarbonization might inadvertently lead to increased property values and rent, causing the displacement of already vulnerable communities. Robust policies are essential to prevent green gentrification by ensuring housing security and channeling benefits to those who need them most.

Massachusetts’ Community Climate Bank offers the Commonwealth a valuable opportunity to accelerate its work in energy efficiency while meeting the housing needs of vulnerable communities. The success of this initiative will depend on effective management, community involvement, and an unwavering commitment to equity.

Sumera Patel

Assistant Researcher

This is a part of the AEC Blog series

The Costs and Benefits of Domestic Production of Electric Vehicles

Image source: Inside Climate News. “The EV Battery Boom Is Here, With Manufacturers Investing Billions in Midwest Factories” Available at: https://insideclimatenews.org/news/27102022/the-ev-battery-boom-is-here-with-manufacturers-investing-billions-in-midwest-factories/

Electric vehicle (EV) adoption has accelerated in recent years with EV sales increasing from just 0.2 percent of total car sales in 2011 to 4.6 percent of sales in 2021. It is estimated that EVs could reach 40 to 50 percent of total vehicle sales in the United States by 2030. The federal government has incentivized EV sales by providing an income tax credit for new EV purchases. The first EV tax credit was introduced in 2008 with a cap of $3,400 and was available to the first 60,000 cars per manufacturer. The cap was raised to $7,500 for the first 200,000 cars per manufacturer under the American Clean Energy and Security Act of 2009. The Inflation Reduction Act of 2022 (IRA) changed sourcing standards for this tax credit so that only vehicles with a certain percentage of battery minerals and components coming from North America or United States’ trade partners are eligible. This sourcing requirement incentivizes domestic production of EV batteries.

BloombergNEF analysts found that lithium-ion cell capacity is expected to increase seven-fold in North America between 2022 and 2030. This increase in domestic battery manufacturing may have some benefits for the global environment depending on the restructuring of the supply chains over time. For example, producing batteries and their components closer to where there is demand for EVs will reduce emissions. In addition, the United States uses more nickel from secondary sources, which can further reduce the carbon footprint of EVs. However, this may cause concern in communities that have been harmed by the automotive industry.

While EVs produce fewer emissions over their lifecycle compared to gas vehicles, the manufacturing of EVs produces as much as 80 percent more greenhouse gas emissions than internal combustion engine vehicle manufacturing. A 2023 study found that returning EV battery production to the manufacturer’s country of origin can reduce carbon emissions in the manufacturing process, but it depends on advances in technology and changes in the supply chain.

The surge in North American battery production is being driven by the downstream portion of the EV supply chain in which plants assemble battery packs rather than extracting and processing raw materials. Additional environmental issues will arise if domestic mineral extraction increases. The extraction process for lithium requires an immense amount of scarce fresh water and negatively impacts local ecosystems through water pollution and soil erosion.

Moving forward, environmental justice will be a key issue in EV production. Although new and updated plants and mining operations generate jobs and can benefit local economies, they also produce pollution. Both battery manufacturing and mining location decisions should consider groups that have historically been harmed by automotive manufacturing, including low-income individuals and people of color. A 2021 Empowering a Green Environment and Economy report notes that one way to make the transition to EV production more equitable is to involve community leaders representing these groups in the policy- and decision-making processes. Developing and implementing greener technology should also be a top priority.

Alannah Shute

Research Assistant

This is a part of the AEC Blog series

Migration in a Climate-Changed World

Human migration due to climate change impacts, such as floods, heat waves, droughts, and wildfires, is on the rise.

Climate change is exerting increasing pressure on people throughout the world, especially Indigenous, people of color, and low-income groups, coastal communities, and those reliant on agriculture. Historically, Mexican migration to the United States has spiked during periods of drought. By 2080, climate change could drive 6.7 million more people to the Southern U.S. border. Drought pushed Syrians into cities, exacerbating tensions and discontent before the ongoing civil war, which has lasted more than a decade. Unemployment, inflation due to agricultural prices, and rapid urbanization due to crop losses were important stressors that helped stoke Arab Springs in Egypt and Libya.

Climate crises have already uprooted millions within the United States. In 2018, 1.2 million were displaced by extreme conditions, fire, storms, and flooding. By 2020, the annual toll rose to 1.7 million people. Most recently, the Maui fires, and the redevelopment and gentrification that may follow, have pressured many Native Hawaiians to migrate to the U.S. mainland. Native Hawaiians are a group that have been historically marginalized, and which includes many of the state’s poorest.

Although climate migrants have some basic rights under existing international human rights laws, many important protections that are provided to other groups, such as political refugees, are wanting. Currently, governments are responsible for any internal climate migrants, i.e. migrants who move within a country, but are not obligated to protect those crossing borders. “Refugee” is a term defined by the 1951 Refugee Convention and was initially created to manage populations fleeing violence or persecution in Europe during World War II. Excluded from the 1951 Convention are those fleeing from climate extremes or other natural disasters. As such, nations have limited plans to address climate migrants. Identifying who can be classified as a climate refugee is also not easy, as worsening weather conditions exacerbate poverty, crime, and political instability, as well as fuel tensions over diminishing resources.

Only within the last decade have major international organizations, such as the World Bank, recognized the relationship between climate change, migration, and sociopolitical instability. Recently, documents (e.g. NY Declaration for Refugees and Migrants, Global Compact for Safe, Orderly, and Regular Migration) have been published recognizing climate change as a driver of migration. In 2020, the UN Human Rights Committee ruled that climate refugees cannot be sent home if this would put their life in danger due to climate change effects. However, this ruling is not internationally binding, and special legal protection is still not offered for those affected worldwide by the international community.

Globally today, 50 million climate-displaced people outnumber those fleeing political persecution. The UN International Organization for Migration has estimated that there will be as many as 1.2 billion by 2050.

The act of migration is incredibly difficult for those who undertake it. Leaving behind home and community requires funds, contacts, and immense amount of courage. Migrants may find it challenging to find housing, childcare, and other public facilities in urban areas, or else may find themselves in employment with inhumane working conditions. The significant resources required for migration also means that the most vulnerable groups – those with low levels of income and education – are more likely to be left exposed to the continued impacts of climate change and thus, fall deeper and deeper into poverty. Many people who are in danger refuse to migrate – residents of small Pacific Island states resist the push from governments and organizations to move as sea levels rise, deciding instead to stay where they were raised and where their ancestors are buried despite growing risks to their safety and livelihoods.

Women are especially vulnerable to climate change impacts, due to gender roles and responsibilities, coupled with deep economic and social gender inequalities and underrepresentation in decision-making. During an extreme climate event, low-income women are 14 times more likely to die than men, due to higher responsibilities at home, little decision-making power within the family, or lack of education. Whether women migrate or remain where they are, they continue to be disproportionately impacted by climate change. In low-income countries, women are highly dependent on natural resources for their livelihood, and therefore face higher agricultural workloads and responsibilities, and are unlikely to seek help when disasters occur. When women opt to migrate, they are faced with higher risks of abuse, violence, discrimination and exploitation.

Climate change has and will continue to alter the land we live on and the lives we live. Migration can be a beneficial event for both the migratory and the receiving country: The Global North receives new groups of workers to replace the aging workforce. It is critical that sensible planning avoids focusing on worst-case scenarios, in which the developed world refuse migrants, and also refuse to help them at home. Instead, more resources can be put into mitigation efforts and disaster risk reduction. Migration is inevitable in our changing climate, and wealthy donor countries can use adaptation funding to support governments that are planning for climate mobility, both internal and cross-border. Finally, recognition of climate migrants as “refugees,” as defined by the United Nations, can provide the much-needed humanitarian statuses to the displaced.

Alicia Zhang

Research Assistant

This is a part of the AEC Blog series

Discrimination in Loan Denials: Evidence from the Housing Market in Massachusetts

Source: UMass Donahue Institute's Economic & Public Policy Research Group. 2021. Mortgage Lending Trends in Massachusetts. Community Banking Council Report.

Racial and ethnic discrimination in loan denials continues to be a pressing issue, perpetuating disparities in homeownership and hindering wealth-building opportunities for marginalized communities. Loan denial rates for Black and Hispanic/Latinx borrowers remain twice as high compared to those for White borrowers, despite an overall decline in loan denials for all housing loan applicants since the great recession. In this context, the reasons cited for loan denial were found to differ by race and ethnicity as minorities were denied loans due to insufficient collateral, while white applicants were denied based on their credit history.

In Massachusetts, as in many other regions, Black and Hispanic/Latinx applicants face higher rates of loan denials compared to their white counterparts, even when accounting for factors like income and credit scores. Although the disparity has decreased over the years, it persists and its continued existence suggests the presence of systemic bias and discriminatory practices within the lending industry.

Historically, discriminatory practices such as redlining, which classifies minority communities as risky investments, have contributed to the existing disparities in access to housing and mortgage loans for racial and ethnic minorities in the Commonwealth. Despite legislative efforts to promote fair lending, studies have shown that discriminatory practices persist. Denied access to affordable loans and homeownership, minority communities are more likely to rent their homes, limiting their ability to build wealth through property ownership.

Addressing racial and ethnic discrimination in loan denials necessitates comprehensive and coordinated efforts. Research suggests that stronger enforcement of fair lending laws and increased investment in financial education can improve loan outcomes for marginalized communities.

Nayantara Biswas

Research Assistant

Michelle Borges

Former Research Assistant

This is a part of the AEC Blog series

Disproportionate Impacts of Abortion Access

Source: Rader B, Upadhyay UD, Sehgal NKR, Reis BY, Brownstein JS, Hswen Y. 2022. Estimated Travel Time and Spatial Access to Abortion Facilities in the US Before and After the Dobbs v Jackson Women’s Health Decision. JAMA. Available at: https://jamanetwork.com/journals/jama/fullarticle/2798215

In June 2022, the U.S. Supreme Court’s decision in Dobbs v Jackson Women’s Health Organization ended the federal constitutional right to abortion care. Complete abortion bans are effective in 13 states, while 11 states have partial abortion bans based on the age of the fetus or are likely to implement bans soon. Research revealed that abortion patients in these restricted states are more likely to be black and low-income individuals compared to states where abortion is currently legal. Most patients reported having to cross state lines to access care.

Each additional 100 miles of travel distance was estimated to prevent an added 21 percent of individuals from obtaining an abortion even before the ban. Current abortion restrictions increased the average travel time to a clinic by over 4 hours. Individuals living more than an hour from abortion clinics are more likely to be low-income and less likely to have health insurance or a high-school diploma. Accessing abortion clinics is particularly challenging for Black, Hispanic, and Indigenous populations, and these communities continue to report the highest maternal mortality rates in the United States.

Studies indicate that lower earnings, insufficient job security, and higher incarceration rates among minorities in abortion-ban states exacerbate limitations in healthcare access. Public-private partnerships can mitigate some of the burdens these groups face, such as investing in clinics and public awareness programs, and providing financial assistance to uninsured individuals.

Nayantara Biswas

Research Assistant

This is a part of the AEC Blog series

Forever Chemicals: Take a Sip

Source: Desikan, A., Carter, J., Kinser, S. Goldman, G. 2019. Abandoned Science, Broken Promises How the Trump Administration’s Neglect of Science Is Leaving Marginalized Communities Further Behind. Union of Concerned Scientists. Available at: https://www.ucsusa.org/sites/default/files/2019-10/abandoned-science-broken-promises-web-final.pdf

Per-and polyfluoroalkyl substances (PFAS) comprise a group of chemicals dubbed the “forever chemical” due to their persistence in the environment. PFAS, which have been produced since the 1940s and can be found in almost every aspect of daily life, have been linked to adverse health outcomes, such as decreased fertility, developmental delays, increased cancer risks, and reduced immune system responses. The United States Government Accountability Office found exposure to PFAS in non-white low-income communities varied across a sample of six states with PFAS standards, but at least 18 percent of water systems were contaminated. In states like Michigan, analysis shows non-white and low-income communities are disproportionately exposed to PFAS.

Non-white and low-income communities often face the brunt of environmental burdens—with many states having no PFAS regulation for drinking water, or having regulations set at limits that are above the proposed EPA levels. These communities will likely face higher PFAS exposure. Traditional water treatment technologies are unable to remove PFAS from drinking water, meaning households require advanced systems to reduce exposure. One such system that has been found effective at removing PFAS costs between $150 for point of use systems to $7,500 for whole-house systems. The price of systems such as this places them out of reach of communities that may suffer the most from PFAS contamination. With low-income and non-white communities already more susceptible to adverse health conditions, the need to address PFAS contamination in an decisive and equitable way represents an urgent public health concern.

Jordan Burt

Research Assistant

This is a part of the AEC Blog series

The Environmental Movement Has a Long, Exclusionary History

A diagram highlighting the intersectional impacts of climate change. Source: Yale Sustainability

There is a long history of minorities being excluded from the environmental movement – from prohibition from outdoor spaces to being left out of environmental decision-making. A clean, healthy, and sustainable environment are human rights for all, and this long-standing exclusion has negative ramifications on how fairly ‘green’ transitions occurs.

Starting in the 1890s, the environmental movement emerged from the progressive era’s conservation movement. Leading naturalists and advocates, such as Henry David Thoreau and John Muir, encouraged wealthy, elite white males to revere nature and embrace outdoor pursuits. The environmental movement focused on preservationist issues by romanticizing outdoor spaces and conceptualizing the “environment” as wild or pristine spaces for recreational activities.

Around the same period, and expanding in the 1900s, concerns about unfair and hazardous working and housing conditions led rise to the labor movement and urban environmentalism. Urban green spaces became a focal point of environmental and political activism. While wilderness-oriented activist separated environmentalism from the working class and urban residents, urban park designers worked alongside the poor and built spaces where the middle-class and working poor interacted.

Urban and rural concerns were solidly linked in the 1960s, with the immense popularity of Rachel Carson’s Silent Spring (1962), which exposed the negative ramifications of toxic chemicals. Her book advocated for the right to a safe environment with a focus on home and community, along with nature and wild spaces. In response, middle class whites moved to more pristine and less toxic areas, while using their power and legal challenges to control the integrity of their communities. Meanwhile, minority communities became the dumping grounds for unwanted, toxic land uses, such as hazardous waste sites. Research soon made it clear the connection between race, class, and the environment. Environmentalism became immersed in the mass social movements of the 1960s, such as the civil rights and antiwar movements, giving rise to the environmental justice movement.

In the 1980s, environmental organizations grew increasingly large and mainly challenged environmental issues through legal and policy channels. Instead of grassroot activism, these organizations began to lobby Congress and business, and built close ties to industries. As these organizations grew and expanded, however, they became bureaucratized, hierarchical, and distant from local concerns. Wildlife and wilderness protection still dominated the agenda, and white males dominated the top leadership positions.

Today, environmentalism increasingly recognizes that systems of power and oppression have implications on climate change vulnerabilities, such as food access or energy affordability. However, those involved with the environmental movement are still mostly white, despite the disproportionate environmental impacts on minority and low-income communities and public opinion polls that have demonstrated the higher levels of environmental concern among minorities compared to whites.

The lack of diversity in environmental organizations is an unsettling facet of the largely exclusionary nature of many organizations, who have historically left minority communities out of the conversation. In 1972, the Sierra Club polled its members regarding whether the Club should “concern itself with the conservation problems of such special groups as the urban poor and ethnic minorities.” Forty percent of the respondents were strongly opposed to this, whereas only 15 percent were supportive. Attention to diversity matters has increased since then, but “diversity” gains have been from increased representation of white women.

Many avenues have the potential to increase minority participation in the environmental movement. In the forefront is the active inclusion of representatives from minority and low-income communities in the decision-making, design, and implementation processes of all environmental actions, from the grassroots level to the federal policy level. Many environmental organizations have active policies and practices that do not support inclusive cultures, but are working on developing transparent promotion processes, mentoring, and training programs in cultural competency which can help address the diversity problem.

Environmental history has largely excluded minorities and low-income communities, which impacts the way in which the environment is conceptualized. Access to a healthy living environment and to the outdoors are human rights, and the rapid onset of climate change impacts should add pressure to transition to a greener and more just world. Environmentalists need to ask what structural issues are preventing certain communities from being a part of this transition to put an end to a long history of environmental exclusion.

Alicia Zhang

Research Assistant

This is a part of the AEC Blog series

AEC Director's Testimony to Massachusetts Legislators on Home Heating Electrification

A diagram of a typical air- source heat pump. Source: Massachusetts Clean Energy Center

This testimony was originally presented to the Massachusetts House and Senate Committees on Telecommunications and Utilities.

About half of all Massachusetts households use piped gas to heat their homes. That’s 1.4 million homes that—without strong leadership from our legislature—will continue to emit greenhouse gases just to keep families warm and, in doing so, will slow the Commonwealth’s progress towards decarbonization. Massachusetts has policies in place to decarbonize its electric sector, but not—as of yet—to achieve decarbonization through electrification in the buildings and transportation sectors. For most families, switching from gas, oil, or electric-baseboard heating to heat pumps is either unaffordable or—for the 38 percent of households who rent their homes—not under their control. Those who can transition to air-source heat pumps pay a higher electric bill together with a much lower or zero dollar gas bill. At present, total utility bills for heating an average home are lower for gas heating, but they won’t be for long.

Our analysis performed at the Applied Economics Clinic in March 2021—in a report called “Inflection Point: When Heating with Gas Costs More”—showed that operating costs for air-source heat pumps become less expensive than gas sometime between 2026 and 2030. After that inflection point occurs, total utility bills for heating with air-source heat pumps will be lower than heating with gas. Home heating costs for ground-source heat pumps and networked geothermal heating are already far lower than the utility bill costs for gas heating. Of course, that result will differ somewhat for specific homes and specific utilities within Massachusetts; I’ll also note that these calculations are only for operating costs (not equipment) and are only for heating (not for cooling).

There have been a lot of changes to forecasted gas and electric prices since March 2021, and our team at the Applied Economics Clinic is currently at work on an updated version of the Inflection Point report that we expect to release in early Fall of this year. In the original 2021 report, we discuss the need for targeted subsidies for low- and moderate-income households as well as renter households for both heating equipment purchases and weatherproofing. Policies to incentivize the electrification of home heating need to be grounded in realistic considerations of customer affordability and ability to pay both upfront costs and ongoing utility bills.

When equipment age or failure necessitates the purchase of new heating equipment, it is utility- and state-provided incentives that make the difference in whether or not the purchase of electric heat pumps is affordable in comparison to a new gas furnace. Electrifying home heating by replacing gas furnaces or oil boilers that have not yet reached the end of their economic life requires substantially higher incentives and other assistance from utilities and state programs. Appropriate incentives paid towards heat pump purchase and installation, along with zero-interest loans or on-bill financing, have the potential to shift the heating system choices of families who own their homes.

As air-source heat pump operating costs fall, more and more households will flee the gas distribution system. When the inflection point occurs, making air-source heat pumps less expensive to run than gas furnaces, the steady trickle of households fleeing the gas distribution system can be expected to accelerate. Families that can afford the upfront costs of a new heating system—or who have access to credit to finance those costs—will choose electric heating on the basis of its lower monthly costs. Families who cannot afford upfront costs or who rent their homes, however, will remain on a gas system plagued by skyrocketing fixed costs. The more households that electrify, the higher those fixed costs become for the families that remain on the gas system. Investment in networked geothermal heating provides a zero-carbon alternative with lower monthly utility bills than gas heating, starting immediately.

The electrification of home heating is a financially complex option for customer households, both in terms of upfront costs and ongoing utility bills. Electrification incentive policies need to realistically account for this. Today, switching to heat pumps causes a temporary increase in home heating bills. That means that until air-source heat pumps are less expensive to run than gas furnaces, which we project will occur in the next 3 to 7 years, air-source heat pumps can only be affordable for most Massachusetts households if there is financial assistance provided, not just for heating equipment purchases, but also for ongoing utility bills. In contrast, investment in networked geothermal heating provides a zero-carbon alternative with lower monthly utility bills than gas heating, a cost advantage that will start immediately and last indefinitely.

Liz Stanton, PhD

AEC Director and Senior Economist

This is a part of the AEC Blog series

Driver’s Licenses for Immigrants in Massachusetts

Source: National Conference of State Legislatures

As of this month, Massachusetts is now one of 19 states that authorize the issuance of driver’s licenses to eligible residents regardless of immigration status. The Work and Family Mobility Act, Bill H.4805, which went into effect on July 1st, 2023, removes the requirement to provide proof of lawful presence in the United States to obtain a license. Instead, applicants can provide documentation such as a foreign birth certificate, passport, or consular card in addition to evidence of current residency in the Commonwealth to apply for Learner’s Permits and take road tests at the RMV to obtain a license.

Massachusetts is home to approximately 210,000 unauthorized immigrants. Granting licenses to undocumented drivers helps to promote racial equity and integrates this vulnerable population into community life. According to the Massachusetts Budget and Policy Center, traffic stops are a primary method used by law enforcement to arrest, detain, and potentially deport immigrants. Hence, this new law will help to end the penalization of undocumented immigrants for driving to daily life activities such as work, school, and doctor appointments, and will increase equity in access to health and education.

The expansion of access to driver’s licenses benefits not only the undocumented immigrants who live in Massachusetts, but the overall population as well. The bill promises to make roads safer for all residents as the expansion will ensure that all drivers are trained, tested, and insured, reducing the number of fatal car and hit-and-run accidents – an impact previously reported from similar bills in California and Connecticut. In addition, expanding license access will enhance productivity and stimulate the economy. Newly licensed drivers will purchase cars and insurance, and will have greater mobility to travel to better job opportunities and grocery stores, increasing the state’s tax revenues and advancing local economies.

Michelle Borges

Research Assistant

This is a part of the AEC Blog series

Energy Transition: Numbers are Not the Only Thing that Matter When It Comes to Jobs

Major environmental organizations such as the Sierra Club have recently popularized the concept of a “just energy transition” – a framework for focusing on equity and accountability in the shift away from fossil fuels toward a clean energy economy. One of the major challenges facing a just energy transition is providing pathways for former fossil fuel workers to shift into well-paying, permanent jobs. A popular proposal among policy experts for tackling this complex problem is to encourage former fossil fuel workers to transition into clean energy jobs. Research from academic and advocacy organizations alike predicts that the upsurge in clean energy/renewables sector jobs will more than compensate for the number of lost fossil fuel jobs. However, this research sometimes overlooks the quality of new jobs in terms of pay and job security—an important consideration that is not guaranteed under a status quo shift toward renewables.

A 2020 report from Indiana University’s Public Policy Institute examines the impacts of the ongoing energy transition in Indiana and includes a breakdown of coal and clean energy jobs in the United States by employment type or sector in 2018. Most coal jobs fall under mining, utilities, and wholesale sectors and can be qualified as permanent, blue-collar work. In contrast, most employment opportunities available in the renewables industry are temporary construction jobs. This discrepancy—in terms of wages, benefits, and job security—between the quality of jobs lost versus jobs gained during the transition presents a major policy challenge for stakeholders to navigate.

Coal mining jobs are generally well-paying, union jobs that have played central roles in their respective communities for a long time. For workers in these jobs, switching to a job in the renewables sector often means taking pay cuts for temporary, non-union construction jobs requiring extensive travel outside their communities—sometimes even across state lines. Simply focusing on the number of jobs gained and ignoring the decline in quality of life associated with such job transitions undermines the principles of equity and accountability that underlie the vision of a just transition. Policies and programs directing the decarbonization of the energy sector must better serve impacted communities and their local economies. For instance, policies/programs could focus more on sustained investment in impacted communities that leads to resilient, diversified local economies upon which communities can fully depend. Achieving a just transition by addressing both climate change and socioeconomic inequalities requires more thoughtful policymaking.

Sumera Patel

Assistant Researcher

This is a part of the AEC Blog series

Western states agree to reduce water consumption through 2026

Image source: U.S. Geological Survey. 2010. “Water use data for the Nation” [Image]. Environmental Defense Fund. Available at: https://blogs.edf.org/growingreturns/2019/10/24/colorado-river-basin-story-map-highlights-importance-of-managing-water-below-the-ground/

The Colorado River basin provides drinking water and hydropower to over 40 million people and 30 Tribal Nations across the Western United States including Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming. The U.S. Office of Congressional and Legislative Affairs reports that the Colorado River Basin’s 22-year drought period is the longest in more than 100 years of recordkeeping.

On May 22, 2023, the Lower Basin states (California, Arizona, and Nevada) reached consensus on a historic conservation plan to cut water usage from the basin by 13 percent for the next three years. In exchange, the Biden Administration will provide $1.2 billion in federal funds from the Inflation Reduction Act for water conservation programs, infrastructure and groundwater storage. The Biden Administration also announced up to $233 million in funding for the Gila River Indian Community for a water pipeline project and a conservation and efficiency program to move towards a long-term solution to save the Colorado River basin. While it is not entirely clear what populations will be most impacted by the states’ conservation plan, a 2020 study by Nature Sustainability suggests the largest reduction in water use will come from the agriculture industry.

While the Lower Basin states’ conservation plan must still pass through several steps of regulatory approval, it is a positive step towards mitigating irreversible depletion of the Colorado River basin. All seven basin states must come to a long-term agreement that equitably distributes water delivery reductions because the health of the Colorado River basin is a vital component of the economic, environmental, and social prosperity of the Western United States and surrounding regions.

Jay Bonner

Researcher

This is a part of the AEC Blog series

LGBTQ+ rights are human rights: A look at the numbers

The LGBTQ+ rights movement was launched by the Stonewall Uprisings of June 1969, when Black transgender women mobilized in a spontaneous, days-long protest against police brutality. Since then, advocates and activists have called attention to the intersection between demands for increased LGBTQ+ representation and broader social movements to address disparities in incarceration rates, poverty rates, and climate change impacts:

Police brutality and incarceration: Research conducted by the Prison Policy Initiative has shown that LGBTQ+ community members are overrepresented at every stage of the criminal detention system nationwide. According to a survey conducted by the New York City Anti-Violence Project in 2012, almost half of LGBTQ+ community members who have had an interaction with law enforcement in the past year experienced police misconduct (e.g., unjustified arrest, use of excessive force, and entrapment). Data suggest that disabled members of the LGBTQ+ community experience heightened rates of incarceration, as do BIPOC LGBTQ+ individuals.

Homelessness: A study conducted by the Williams Institute at UCLA School of Law in 2020 found that LGBTQ+ community members are twice as likely to have experienced homelessness at some point in their lives compared to the non-LGBTQ+ population. Black transgender individuals have a staggering 41 percent chance of experiencing homelessness at some point in their lives.

Poverty rates and average earnings: The Williams Institute has also found that members of the LGBTQ+ community are 40 percent more likely to experience poverty, relative to their non-LGBTQ+ counterparts. Moreover, according to the Human Rights Campaign, LGBTQ+ community members earn 10 percent less than the average U.S. worker (based on median weekly wage data). Transgender adults are disproportionately burdened by poverty and unemployment, as are Black members of the LGBTQ+ community.

Access to health insurance and poor health outcomes: A 2017 study published by Harvard University found that LGBTQ+ adults are twice as likely to be uninsured than non-LGBTQ+ adults. The prevailing system of employer-sponsored health insurance limits healthcare access for LGBTQ+ individuals, who are twice as likely to be unemployed than non-LGBTQ+ adults. The study also found that LGBTQ+ adults were more likely to suffer from chronic and mental health conditions, and discrimination in medical settings. Disabled transgender adults experience even worse health outcomes compared to other members of the LGBTQ+ community.

Climate change impacts: In 2020, the Federal Emergency Management Agency (FEMA) noted that LGBTQ+ community members were "at the highest risk" for climate disaster impacts due to the increased likelihood of being isolated, unhoused, and/or mistreated in emergency shelters compared to non-LGBTQ+ community members.

Socioeconomic burdens fall disproportionately on the LGBTQ+ community compared to non-LGBTQ+-identifying adults. On the flipside, universal interventions that extend the rights of shelter, healthcare, and a livable wage to everyone have the potential to afford the largest benefits to the LGBTQ+ community. For instance, the Williams Institute at the UCLA School of Law found in 2019 that a proposed federal minimum wage increase to $15 per hour would raise wages for nearly 1.5 million LGBTQ+ adults across the United States. An added benefit of such proposals, in contrast to more targeted initiatives, is that universal policy initiatives do not require self-identification and the risks that it entails, thus offering identity protections to members of the LGBTQ+ community. While pro-LGBTQ+ policies include and begin with gender equality protections, broader policy demands for universal housing, healthcare, livable wages, an end to violent policing and incarceration, and a habitable planet strengthen the movement for LGBTQ+ equality while also improving living conditions for millions of other U.S. residents.

Sachin Peddada

Assistant Researcher

Tanya Stasio, PhD

Researcher

This is a part of the AEC Blog series

Non-Energy Benefits of Energy Programs

*Midwest Energy Efficiency Alliance. n.d. Non-Energy Benefits of Energy Efficiency.* *Available at:* *https://www.mwalliance.org/sites/default/files/media/NEBs-Factsheet_0.pdf*

Energy-related program assessments take account of the “non-energy benefits” (NEBs) that place a value on the many and diverse benefits for participants in energy efficiency programs beyond energy savings. Three-quarters of energy efficiency project benefits can come from NEBs including reduced energy burden for low-income residents, improved health and wellbeing, and a reduction in societal costs from air pollutants from fossil-fuel burning.

Regulators and utilities assess the cost-effectiveness of their energy efficiency programs by comparing the benefits of the program to the cost of delivering those programs. Forty states, including Texas, Florida, Ohio, and Pennsylvania, use cost-benefit tests that do not incorporate NEBs. The remaining 18 continental U.S. states that do incorporate NEBs, such as California, Massachusetts, and Washington, face challenges in quantifying NEBs. One difficulty is determining whether benefits are specific to the energy efficiency program itself, or whether they are caused by a different activity. For example, asthma incidences may be reduced by the reduction in energy derived from pollutant-emitting fossil fuels such as coal. But other initiatives, such as reducing exposure to tobacco smoke or mold, can also contribute to this reduction in asthma prevalence but which then cannot count as a NEB.

Further, reported monetization values for individual NEBs vary, due to different methods and assumptions used as well as differences in households, climate, and programs. Values may differ based on whether NEBs are included in a cost-benefit analysis:

As an adder, which is a dollar or percentage value added to energy benefits;
Using quantification, or the inclusion of money values for NEBs that can be quantified, such as a reduction in ratepayer costs; or
As a hybrid of both an adder and quantification, where an adder represents certain NEBs and quantification is used for others.

Regardless of the method used, accounting for NEBs in state policy and utility planning allows for the full potential and opportunities of energy efficiency programs to be captured.

Alicia Zhang

Research Assistant

This is a part of the AEC Blog series

A Moratorium on New Gas System Expansion

Based on remarks made at a Massachusetts State House briefing on 6/6/2023:

Investment in new gas infrastructure is costly for Massachusetts utility customers. Better, and less costly, alternatives exist.

Fossil gas must be phased out by 2050 to comply with Massachusetts’ net zero greenhouse gas emissions requirement.
By 2050 at the latest, therefore, oil and gas pipelines, storage facilities, and power plants will need to be retired. Most facilities will need to be retired sooner; Massachusetts law sets intermediate emission reduction targets of 50 percent below 1990 levels by 2030 and 75 percent by 2040. Facilities that retire before the end of their economic lifetime face accelerated depreciation creating stranded assets that must still be paid for in utility customers’ rates and bills, even when the facilities are no longer in operation. These are costs paid for by consumers with no benefit to consumers.
Over the next three decades, the number of customers on the gas system will plummet. In the residential sector, Massachusetts’ Clean Energy and Climate Plan calls for more than half of all households to be heating with electricity by 2035 and 85 percent by 2050. Richer households with access to upfront funds, credit sources, and the financial facility to assume risks or take on investments with five-, ten- or twenty-year payback periods will leave the gas system first.
As a result, the fixed cost of the gas system will be shared with a shrinking customer base, driving up energy bills for the households that do not have the financial means to decarbonize their heating systems. The households who are left behind on the gas system, paying higher fixed costs every year, are disproportionately households with lower incomes, renter households, and those living in environmental justice communities.

Second, the restoration and refueling of Massachusetts’ aging and leaky gas infrastructure is costly for Massachusetts utility customers and presents a danger to all homes, schools and businesses located nearby.

As fossil gas is phased out to comply with Massachusetts climate standards, some advocates for spending utility customers’ money to rebuild aging gas pipelines call for a transition to using the same infrastructure to deliver different highly combustible fuels: a mix of upgraded biogas and hydrogen.
Our research at the Applied Economics Clinic has, repeatedly, found:
- a lack of evidence that a sufficient supply of these alternative fuels will be available to meet customer needs;
- that, if supplied in high volumes, these fuels are far more costly than the fossil gas that utilities supply today;
- that upgraded biogas and hydrogen are only zero carbon under very special circumstances; and
- that these alternative fuels pose significant dangers to human health and safety from leaks and accidental combustion or explosion.
Continued investment in repairing leaks and rebuilding the Commonwealth’s gas infrastructure has already cost ratepayers billions of dollars.
Gas pipeline replacement is estimated to cost an additional $16-$17 billion—an amount that would take more than 90 years to pay off using the $5 per month “GSEP charge” currently paid on each gas bill. Factoring in the expected drop in the number of gas customers over time as more and more customers switch to electric heating, it would require a GSEP charge of about $30 per month, to pay off the total costs of pipeline replacements by 2050.

Investments in both new and existing fossil fuel infrastructure are not economic. Immediate repairs of dangerous leaks are essential to public safety, but a comprehensive $17 billion pipe replacement program cannot be paid for without increasing charges on gas bills. Richer families have been fleeing, and will continue to flee, the gas system, raising bills for the remaining lower-income families who will be left holding the bag. Massachusetts needs a strategic plan for economically, and equitably, walking away from gas. An end to fossil gas will still happen without such a plan, but it will cost us more, and cost Massachusetts’ overburdened communities the most.

Liz Stanton, PhD

Director & Senior Economist

This is a part of the AEC Blog series

Atmospheric carbon dioxide levels continue to hit record levels. What can we do to decarbonize?

***Image Credit :*** ***https://www.climate.gov/news-features/understanding-climate/climate-change-atmospheric-carbon-dioxide***

In 2022, the global average concentration of atmospheric carbon dioxide (CO2) hit a record high of 417 parts per million (ppm) and continues to rise at a rate of around 2 ppm per year. Atmospheric CO2 levels have been on the rise since the beginning of the Industrial Revolution; before industrialization, CO2 levels remained stable below 300 ppm for thousands of years. Today’s CO2 concentrations are the highest level in at least 800,000 years.

This rapid climb—largely due to human activities, primarily the burning of fossil fuels, deforestation, and industrial processes—has emerged as one of the most pressing challenges in modern history. Rising CO2levels contribute to climate change, causing detrimental impacts on ecosystems, weather patterns, and human health. It’s not too late to decarbonize, but successfully zeroing out new emissions and reducing atmospheric concentrations will require immediate action.

Rising greenhouse gas concentrations lead to global warming, sea-level rise, ocean acidification, and the intensification of extreme weather events, such as hurricanes, droughts, and heatwaves. The consequences of elevated CO2 levels are intersectional and impact communities disproportionately, exposing low income and black, Indigenous and people of color (BIPOC) to higher rates of environmental hazards. Designing equitable protection from the effects of rising CO2 levels is imperative to close existing racial gaps.

Among many promising solutions that, together, can reduce atmospheric CO2 here are five that are proven and are capable of addressing environmental justice concerns when designed appropriately:

1. Renewable energy paired with electrification:

Shifting away from fossil fuels in favor of renewable energy sources is crucial to decarbonize our energy sector. Solar, wind, hydro, and geothermal power have become increasingly affordable and accessible, offering cleaner alternatives to traditional coal, oil, and gas. When paired with battery storage and demand response technologies, these sources can sustainably power communities with minimal support from carbon emitting energy sources.

2. Energy efficiency:

Enhancing the energy performance of buildings, transportation systems, and industrial processes can significantly reduce energy consumption and associated CO2 emissions. Energy-efficient technologies, smart grid systems, and energy management practices can help optimize energy use while reducing carbon footprints. Incentive programs can ensure low-cost access to these services based on income or background.

3. Electrification of transportation:

Getting more people out of personal vehicles will reduce the energy consumption demands of transportation. Promoting and incentivizing public and active transportation (like biking and walking) in densely populated areas can reduce congestion while making transportation options more accessible to justice communities[LS1] . Paired with electric cars and greatly increasing the availability of charging stations, public and active transportation can decarbonize transportation without decreasing accessibility.

4. Reforestation and Land Management:

Forest ecosystems are natural carbon “sinks” that absorb CO2 from the atmosphere. Protecting existing forests and implementing large-scale reforestation initiatives through sustainable land management practices, including soil carbon sequestration and regenerative agriculture, can contribute to carbon removal and restore ecosystems. These restoration programs can be focused around low-income communities where green coverage tends to be more sparse.

5. Circular Economy and Sustainable Production:

Transitioning towards a circular economy—where resources are efficiently used, recycled, and waste is minimized—can significantly reduce CO2 emissions. Sustainable production processes, such as the use of renewable materials, eco-design principles, and recycling initiatives, are crucial for achieving carbon neutrality across all economic sectors, including manufacturing and construction.

Efforts to address climate change and decarbonization must go hand in hand with social and economic justice to ensure a just transition. By acknowledging and actively working to rectify the disproportionate impacts, we can build a more inclusive and sustainable future for all.

Eliandro Tavares

Assistant Researcher

This is a part of the AEC Blog series

Massachusetts' Renewables Requirements Only Apply to 86 percent of Electric Customers

Supplying 14 percent of customers electric demand, Massachusetts Municipal Light Plants (MLPs) are not required to comply with the Commonwealth’s Renewable Portfolio Standard or Clean Energy Standard. Both standards aim to reduce emissions from the electric sector by requiring increasing shares of electric sales to the other 86 percent of Massachusetts customers to be derived from renewable resources like wind or solar.

Instead, starting in 2030 MLPs will be required to follow the provisions of the Greenhouse Gas Emissions Standard that does not require additional renewable resources for compliance. While MLPs could choose to meet the GGES with wind and solar, they are not required to, and could meet the Greenhouse Gas Emissions Standard with no additional wind or solar generation. AEC’s recent presentation on the topic demonstrates that requiring MLPs to comply with the Renewable Portfolio Standard would result in substantially higher levels of wind and solar in the Commonwealth today and into the future.

According to data analysis performed by the Massachusetts Climate Action Network, just 2 percent of total MLP electric sales were derived from renewable energy sources in 2020. In contrast, Clean Energy Standard requires investor-owned utilities (National Grid, Eversource, and Unitil) to certify 20 percent of their electric sales as renewable in 2020. In 2030, Clean Energy Standard requires investor-owned utilities to have 60 percent renewable electric sales; MLP’s requirement for wind and solar derived resources will still be zero.

MLP’s exemption from the Renewable Portfolio Standard hinders the Commonwealth’s efforts to meet statewide climate targets and supports MLP’s continued reliance on fossil fuel resources.

Tanya Stasio

Researcher

This is a part of the AEC Blog series

Renewable Energy: Hydropower

Energy and water are interdependent resources when it comes to hydroelectricity. Due to population growth, climate change, and economic growth, increased demand, and regional constraints, access to both water and energy could cause availability concerns. Human cultures have a long history using waterpower to run wheels to process grains or lumber and produce mechanical energy; this same power has evolved to become one of the largest sources of renewable electricity generation in the United States.

Out of all renewable resources, hydropower produced the most electricity in the United States until 2019. Currently, with new policies around windmill farm production, wind power generates the most electricity. In addition, hydropower’s smaller share of generation can also be attributed to the spread of COVID-19 which caused stalled licensing and project development and increases in other electric generation from sources such as nuclear plants, coal, natural gas, or other renewable energy (solar, biomass, and geothermal).

The benefits of hydroelectricity include being a clean cost-effective source, a backup to our power grids during outages or disruptions, a flood control, and an irrigation support. Hydropower projects usually have longer pre-development construction and operational timelines than other renewable sources such as wind and solar, so renewable energy policy efforts have been focused on solar and wind technology.

Deja Torrence

Assistant Researcher

This is a part of the AEC Blog series

Proactive Steps for Warm Weather Energy Efficiency

Source: PJM. n.d. “How Energy Use Varies with the Seasons.” Available at: https://learn.pjm.com/three-priorities/keeping-the-lights-on/how-energy-use-varies

Household demand for electricity often increases in the winter months due to use of heating equipment and an increased need for lights. With winter at a close and warm weather on the horizon, electric demand is expected to decrease. However, low spring electric demand will quickly be replaced by high demand in the summer due to cooling needs, which often surpass average daily demand in the winter. Massachusetts residents may benefit from a potential electric price decrease from utilities this spring, but mindful energy use and energy efficiency can further reduce electric bills.

There are a variety of ways households can be proactive in increasing energy efficiency and reducing their electric bills this summer. The U.S. Department of Energy (DOE) recommends servicing cooling systems (e.g., replacing air filters and checking evaporator coil) in the spring to ensure they will run efficiently in the summer. DOE also recommends keeping air conditioner thermostats as high as possible, as colder settings will not cool homes faster and can result in increased costs. Installing window treatments early in the season will also help to keep homes cool: 76 percent of the sunlight that shines on windows enters the home as heat.

For additional measures households can take to improve energy efficiency this spring see the DOE’s 10 Energy Saving Tips for Spring.

Jordan Burt

Research Assistant

This is a part of the AEC Blog series

Microgrids: Creating a More Sustainable and Independent Grid

Microgrids are localized energy systems that can disconnect from the traditional grid to operate autonomously. The ability of microgrid systems to disconnect (or “island”) from the traditional grid presents benefits of energy independence and flexibility, and, depending on the way they are designed, can be sustainable and cost-effective. Microgrids fill a niche that traditional grids struggle to fill, such as being designed with specific needs in mind and retaining reliable power during extreme weather events, cyber attacks, or other grid shutdown events.

On the day to day, microgrids can improve grid resilience while lowering electric bills. The “islanding” ability of microgrids ensures uninterrupted electric service when the rest of the grid may be interrupted. Furthermore, the proximity of microgrids to their customers eliminates the need for transmission lines, which charge costly fees and lose hard-earned electricity over long distances. The better resilience, efficiency, and cost-effectiveness of microgrids prove especially vital for vulnerable populations, who experience more service interruptions while paying disproportionately more out of pocket. In Boston, the bottom quarter of low-income households spend nearly a fifth (19 percent) of their income on energy bills. The autonomy of the microgrid allows for communities to implement renewable generation, such as community solar, which can improve the sustainability of their energy diet.

Microgrids demonstrate significant promise to improve the reliability, sustainability, and cost-effectiveness of electricity provision to communities of all types, finding niches in the gaps that traditional grid infrastructure struggles to fill. To learn more about microgrids and their benefits, drawbacks, and barriers to implementation, check out Applied Economic Clinic’s policy brief.

David Jiang

Research Assistant

This is a part of the AEC Blog series

Scope 3 Accounting is Difficult, But Necessary

The U.S. Environmental Protection Program (EPA) breaks carbon emissions into three different “scopes”: direct use of fuels (Scope 1), fuel use for generating electricity (Scope 2), and more indirect upstream and downstream emissions (Scope 3). Scope 3 emissions result from activities that are not done by the reporting organization but may be done by its suppliers or vendors, such as emissions from employees commuting or emissions from purchased goods or services.

Source: World Resources Institute and World Business Council for Sustainable Development. 2011. *Corporate Value Chain (Scope 3) Accounting and Reporting Standard.* Available at: https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.pdf

For most companies, Scope 3 accounts for more than 70 percent of their carbon footprint and therefore represents a large opportunity to reduce its overall emissions. Estimating the scale of Scope 3 emissions, however, is difficult, time-consuming, and resource intensive. These challenges often lead to poor or nonexistent reporting, partially [ES1] because businesses typically require data from many different suppliers to calculate their Scope 3 emissions. In lieu of robust and complete data, Scope 3 emissions can be estimated using computer models, although the results may not be detailed enough to provide good company-specific results. The complexities of Scope 3 reporting may have to be resolved soon, as there is increasing pressure from regulatory agencies such as the International Sustainability Standards Board (ISSB) and the U.S. Securities and Exchange Commission (SEC) to require Scope 3 disclosures.

Alicia Zhang

Research Assistant

This is a part of the AEC Blog series