OPINION: Beyond lip service: It’s time to measure equity in clean energy investments

By Justin B. Schott | July 9, 2021

Imagine an aspiring Olympian training to contend for a medal, but being deprived of a stopwatch until after the race began. That is the current state of measuring equity in clean energy programs—we are running blind and overdue for a more systematic approach. 

On a positive note, nearly three out of four Americans live in a place that has committed to eliminating carbon emissions by 2050 or sooner. These goals are no longer just aspirational, they are utterly feasible, perhaps even inevitable. 

Solar power is now, remarkably, cheaper to produce than electricity produced by fossil fuels, and we are amidst a proliferation of increasingly affordable and efficient electric heating systems and battery technologies for electric vehicles. We are already hitting the inflection point that will dramatically accelerate the transition to clean energy. The question now becomes how will this clean energy transition go down? Who will capitalize and who will be left behind? And if we want to answer the how questions, we have to stop being fuzzy about what we mean by equity. 

The fruits of clean energy, like electric vehicles, solar panels, and green jobs are theoretically available to anyone, but the truth is that Black, brown, and Native people are being shut out of these opportunities, despite higher levels of support for climate mitigation than their whiter and wealthier counterparts. 

When you think of someone driving an electric car, who do you see? Who is represented in climate leadership positions and decision-making tables – whose faces do you see in power? Who is designing clean energy policy and programs and what implications does that have?

Inequities proliferate by race and class across the energy sector in parallel to inequities in education, housing, jobs, access to green space, and health care. Nearly 120 million Americans, including half of all Black, Indigenous, and people of color (BIPOC) face some form of energy insecurity every year–the threat of or actual shutoff of electricity or heating, keeping one’s home at uncomfortable or unsafe temperatures to avoid high bills, or foregoing other critical basic needs like food and medicines. 

BIPOC households spend a much higher percentage of their household income on energy, even though they use less energy per square foot than their White counterparts. And despite a deep interest in clean energy, they have been shut out of opportunities to put solar on their roofs or buy electric vehicles: contractors won’t serve inner cities, banks won’t lend, utilities don’t advertise or have culturally appropriate marketing. What’s happening in the energy sector is very much ground zero in civil rights struggles.

Contrary to the zero-carbon climate goals, which specify a baseline year for comparison, intermediate targets (e.g. in Detroit, a 75% reduction in municipal emissions by 2034) define what constitutes a source of clean energy, defining and measuring equity is in its infancy. 

With hundreds of billions if not trillions of dollars in clean energy investments poised to flow, the absence of a consistent and comprehensive approach to set equity goals and measure progress is glaring. If not addressed, that absence will be the bottleneck that stalls a just energy transition. 

Suppose we meet climate goals by turning Nevada’s Mojave Desert into a giant solar array and massive battery field, accompanied by a network of extreme high transmission power lines that reach even the lowest molehill in Mississippi, lining the pockets of investor-owned utilities while perpetuating energy poverty and insecurity? In that case, we will have missed a generational opportunity. 

This is an opportunity to 

  • generate millions of new high-quality jobs for those who have been shut out of the energy sector and burdened by its pollution 
  • retrofit millions of homes and ensure they contribute to health instead of exacerbating asthma, and  
  • build wealth in BIPOC and frontline environmental justice communities that have borne the effects of redlining, disinvestment, gentrification, and concentrations of our most toxic and carcinogenic air, water, and soils. 

The clean energy transition could be a vehicle for beginning to right centuries of brutal wrongs. 

The Justice40 initiative of the Biden-Harris administration recognized that equity needs measurable goals. It mandates that 40% of the benefits from federal clean energy investments must be received by disadvantaged communities. 

The Department of Energy has already launched a Justice40 dashboard to track its investments.

Most states, cities, and utilities simply don’t measure energy equity or set equitable energy targets in a meaningful way. While there are exceptions, like California Energy Commission’s robust Energy Equity Indicators, there is a lot of conversation about equity that generally lacks teeth. 

There are equity working groups and task forces, utilities and public utility commissions required to “consider” equity in planning and make “a sufficient supply of program offerings” available to “diverse” customers. These are typical starting points that acknowledge the need to do something about equity. But they don’t point the way forward.

How should we begin to quantify whether clean energy benefits and the ongoing burdens of energy from fossil fuels are being distributed fairly? How can policymakers and regulators work to rectify the historical legacies that have burdened Black, Brown, Indigenous, and lower-income communities? 

At the Energy Equity Project, we are working with dozens of stakeholders and partners across the nation to create an equity measurement framework that can be used to measure four dimensions of equity and upwards of sixty equity indicators within the energy sector. We are working to ensure that the framework embodies principles of equity in its development—focusing on expanding participation among BIPOC-led community organizations and compensating people for their time to share feedback and participate in workgroups. 

Our goals are as follows:

1) Recognize that equity is multi-faceted. It is tempting to try to reduce equity to a single metric, like the energy burden (the percentage of household income spent on energy bills). The energy burden is one consideration of affordability, but it does not speak to whether people have a meaningful voice in designing energy policies and programs, or who gets to own new solar installations, or even if the rates themselves are equitable. At best, a reductive approach to energy is likely to address a single symptom of energy inequities. In a white paper that was foundational to the launch of the Energy Equity Project, Jamal Lewis and Dr. Carlos Martín describe six dimensions of energy equity that should be considered.

2) Establish guiding principles. We are not advocating for measuring equity for its own sake. Equity goals need to be tied to broader principles, like a belief that energy is a human right and everyone deserves access to energy regardless of their ability to pay for it. Other principles might require taking a historical account of clean energy incentives and making up for disparities.

3) Require utilities and other program providers to make the data public. We need to know who is participating in energy efficiency and clean energy program, how much they are saving, and where new investments in things like public transit, microgrids, and EV chargers are being made. We need to know the demographics of the recipients to determine whether 40% of the benefits are reaching disadvantaged communities. 

4) Elevate a vision of energy democracy. Equity is ultimately deeper than simply being able to get energy efficiency upgrades for one’s home. Equity means that a significant share of new clean energy assets, like solar arrays, must be designed and owned by disadvantaged communities. It means they deserve formal decision-making power that goes well beyond public hearings; it means that those most impacted by the current energy system must have power to shape the clean energy trajectory of this country. 

How can we safeguard a just transition, so that BIPOC and frontline residents move to the front of the line for clean energy benefits? It all starts with defining and measuring equity. 

U-M Energy Equity Project Partners in Developing Inclusive Decarbonization Policies for the Future

By Haley Riley, MS Candidate | May 27, 2021

The Biden administration’s recommitment to the Paris Agreement on climate change has inspired experts and organizations focused on net-zero energy production to plan for the implementation of decarbonization technologies. On May 25-26, the School for Environment and Sustainability joined a workshop for stakeholders, including modelers, analysts, and policy and implementation experts. Participating groups included Climate Works, Center for Global Sustainability, Rocky Mountain Institute, and World Resources Institute, as well as researchers and advisors appointed to President Biden’s climate policy and innovation office.

“Our goal was to create a governing body for this work, and to bridge the gap between technical and analytical frameworks and an interest in including equity and jobs considerations in long-term decarbonization strategies,” said Justin Schott, project manager for U-M’s Urban Energy Justice Lab’s Energy Equity Project, which was one of the organizers of the workshop.

While low-carbon technologies such as batteries, photovoltaics, and wind turbines are more cost-competitive than ever, this workshop focused on moving the conversation beyond least-cost, model-based scenarios toward policy and technology pathways that are politically feasible to implement in the U.S. and globally. Discussions around the feasibility, affordability, and steps for how to actually implement net-zero technologies led the direction of the workshop, but equity also featured heavily.

“We determined that we have the tools to feasibly implement these technologies, and we know we can do it affordably,” Schott said. “But the Black Lives Matter movement after the death of George Floyd has given us space to discuss and address the legacies of structural racism and white supremacy. The topic of equity is now open for discussion even among researchers and modelers who previously didn’t see equity as playing a role in their own work. We discussed how to rework models to actually include equity and job promotion, as well as how to engage with community members to make sure that our models account for actual lived realities.”

At the end of the workshop attention was turned towards integrating equity, job creation, and other factors into net-zero modeling and future research efforts. Participants also shared the intent to raise a research agenda to inform more inclusive decarbonization policies for the future.

Energy Equity Project

U-M Energy Equity Project to Develop First Standardized Tool for Driving Equity in Clean Energy Industry

ANN ARBOR—Despite widespread calls for a just transition to cleaner, more resilient energy systems, there isn’t a standardized measurement framework for evaluating the equity of clean energy programs. As a result, utility administrators, regulators, and energy advocates have been judging equity on an ad hoc basis. The Urban Energy Justice Lab at the University of Michigan School for Environment and Sustainability (SEAS) today announced a new program aimed at addressing this gap, which will measure whether clean energy programs are being distributed equitably to those who need them most.

The Energy Equity Project—a partnership between SEAS and the Energy and Joyce Foundations—will create a standardized approach to collecting and tracking data to improve equity in clean energy programs. The Equity Measurement Framework will be the first of its kind to assess equity in clean energy policies, programs, and investments, including how easy it is to access clean energy services in frontline and Black, Indigenous, and People of Color (BIPOC) communities that are burdened by disproportionately high energy costs and pollution. This comes at a critical time, given the Biden administration’s increasing focus on environmental justice. The project will dovetail with the administration’s Justice40 Initiative, which pledges to deliver 40 percent of climate investment benefits, including weatherization, retrofits, and renewable energy, to disadvantaged communities.

The Energy Equity Project team will engage BIPOC and frontline communities in the Framework development process through a series of summer public engagement activities, including two webinars in June: “From the Frontline to the Front of the Line: An Introduction to the Energy Equity Project.” (Register below)

Subsequent listening sessions will focus on hearing from those historically burdened by fossil fuels and excluded from the benefits of clean energy and climate action.

“The Energy Equity Project is an opportunity to both drive and measure how we’re moving the needle on equity in the clean energy and energy efficiency industry,” said Dr. Tony Reames, principal investigator of the project, who also is an assistant professor of energy justice at SEAS and director of the Urban Energy Justice Lab. “There’s a big transparency issue where it’s easy for utilities or regulators to say they’re incorporating equity into their programs or that equity is a priority, without having any teeth behind those commitments. We need a tool to evaluate whether they are hitting the mark or not.”

Reames and the Urban Energy Justice Lab were tapped by a group of collaborators to lead the development and testing of the Framework, which will address the key problems in equity measurement: a diversity of approaches that stymies aggregation and comparison, lack of access to demographic data, and the high cost to implement equity measurement and reporting. One of the key goals of the Framework is to measurably improve the clean energy benefits that BIPOC and frontline communities receive, including lower energy bills, cleaner air, green jobs, resilience to climate impacts and power outages, and ownership of renewable energy systems and electric vehicles.

“While electric vehicles, solar panels, and green jobs are theoretically available to anyone, the truth is that Black, Brown, and Native people are being shut out of these opportunities,” said Justin Schott, Project Manager. “Polls show BIPOC support a range of climate mitigation efforts at the same or higher levels than Whiter and wealthier counterparts. This follows the same pattern that we see in housing, health care, education, and economic development: The legacies of structural racism have resulted in barriers to a just transition. It’s much harder to find highly efficient, new technologies and experienced contractors in BIPOC and lower-income neighborhoods, for instance, and programs are designed for homeowners with high credit scores and access to financing. Our objective is to ensure that the voices of frontline communities are not only heard, but are prominent, and that they are not only the recipients, but the architects of an equitable clean energy future.”

A beta version of the Framework is set to launch in early 2022. Envisioned as an “off the shelf” guide, the Framework will consist of a set of text documents, spreadsheets, and an interactive website with user support provided via phone and email. Ultimately, the Energy Equity Project aims to contribute to how policies and programs are designed, how the benefits of decarbonization are distributed, and how the burdens of dirty energy are lifted.

Register for the Energy Equity Project kickoff webinar on June 9 or 17, 2021

Group lays groundwork for equity metrics framework

In 2018, about 40 people gathered to lay the groundwork for development of a standardized approach to collecting, reporting and utility demographic variables to improve equity in clean energy programs.  Coming out of that gathering, several staff from VEIC, Efficiency for Everyone, Urban Institute, GHHI, and Energy Trust of Oregon took on 3 tasks:  1) Identify model approaches from equity assessment in non-energy fields like housing and education; 2) Identify model approaches from equity assessment in the clean energy industry; and 3) Identify an institution to develop an equity assessment tool.