Recognizing Energy Inequities for Building Decarbonization

The costs and benefits of our energy system are disproportionately allocated in ways that cause harm to  historically marginalized or excluded communities . Recognizing that racism and classism are the root sources of most current energy inequities is an essential first step towards addressing these inequities as we decarbonize our buildings.

Many organizations have already done work in this area, and we recognize that our own contributions are built on the work and wisdom of others. NEEP acknowledges that the energy equity conversation has been ongoing for many years and that we are not experts in equity. NEEP is, however, committed to putting the needs of the people we serve first and foremost.

We believe it is the responsibility of organizations like NEEP to help combat injustices and make the benefits of energy efficiency more accessible to and impactful for all. This StoryMap and accompanying  brief  aim to assist NEEP and those working with NEEP to begin making more equitable decisions as we work together to decarbonize, or remove greenhouse gas emissions from, the buildings sector for the benefit of all residents of the Northeast and Mid-Atlantic region. The StoryMap and brief present resources, ideas, and examples of energy equity issues and interventions from across the region and beyond to help inform equitable decarbonization decisions.

Centering equity begins with understanding inequities. To do so, we must recognize that discriminatory practices have been embedded into policy and practice in the housing, energy, and environmental sectors for generations. Dismantling these practices is key to fostering equitable decarbonization of the region’s buildings in a way that will transition all households to sustainable sources of energy while minimizing cost increases and burdens for those who have historically been marginalized or excluded from decision-making processes and overburdened by our use of fossil fuel resources. To combat the climate crisis and support an equitable future, we need a clean and just energy transition, which necessitates equitable decarbonization actions by decision-makers.

In this StoryMap, we define key concepts and review the landscape of energy inequities in the region before discussing practices that exacerbate inequities and offering some takeaways.  Please refer to the glossary of key terms here . For near-term solutions to centering equity in order to create more effective building decarbonization policies and programs, see NEEP's brief " Near-Term Strategies for Centering Energy Equity ."

This section provides an introduction to key concepts, root causes of energy inequities, and the landscape of inequity in the NEEP region.

Energy equity is defined as the fair distribution of benefits and burdens from energy production and consumption.[ 1 ] It is important to note that equity differs from equality because it accounts for context and historical causes of current inequalities. "Equity is an approach based in fairness to ensuring everyone has access to the same opportunities and resources. In practice, it ensures everyone is given equal opportunity to thrive; this means that resources may be divided and shared unequally to make sure that each person can access an opportunity. Equity is therefore not the same thing as equality. Equity takes into account that people have different access to resources because of systems of oppression and privilege. Equity seeks to balance that disparity."[ 2 ]

Energy democracy is an important part of a just transition to an equitable energy future. At its core, "energy democracy is the notion that communities should have a say and agency in shaping and participating in their energy future. "[ 3 ] This means shared decision-making power among leaders and community members going beyond simple community representation practices.

Energy inequities cause negative health outcomes. As such, health is a core goal of building decarbonization and must be prioritized. Health refers to physical, mental, emotional, and environmental well-being. Healthy People 2030 organizes the World Health Organization’s social determinants of health into five key domains: economic stability, education, social and community context, health and health care, and neighborhood and built environment.[ 4 ] Needs in all five of these domains must be met in order for a person to be considered healthy.

For decarbonization programs and policies to be equitable and effective, they must exemplify procedural, distributional, structural, and transgenerational equity with a focus on all domains of health. Many existing decarbonization efforts may fall short of achieving equity due to the inherent structural racism and classism in our systems and policies.

“The unequal burden of housing disparities faced by marginalized populations does not occur spontaneously or naturally; rather it is related to broader structural disadvantages enforced by institutions and individuals” [5] - Carolyn B. Swope and Diana Hernández, Housing as a determinant of health equity: A conceptual model

In 2014, the  Urban Sustainability Directors Network (USDN) Equity Scan  found that constituencies that have been identified by local governments as most impacted by community decision-making and whose life outcomes are disproportionately affected by structures in society include:

• People of color
•  Low-and moderate-income residents 
• Younger people
• Older people
• "New Americans" or recently arrived immigrants
• Individuals with limited language proficiency
• People with disabilities
• Unhoused individuals [ 14 ]

While this StoryMap will touch on equity barriers and solutions that may be applicable to several of the above-mentioned groups, the focus will be on communities of color and low- and moderate-income communities. We include moderate-income households because many of these households experience high energy burdens and do not qualify for low-income assistance programs. 

Currently, the Northeast and Mid-Atlantic region, as well as the nation, are in a state of energy inequity due to the disproportionate distribution of benefits and burdens among residents. Achieving equity requires an incremental approach and necessitates examining and addressing inequities in processes and outcomes. Outcomes may seem equitable but aren't truly so if the process itself was not equitable and inclusive. 

 Energy burden and energy insecurity  are two terms commonly used today to identify households who pay disproportionately more to have access to energy or who are unable to access this essential resource. Low-income households face disproportionately higher energy burden. According to  U.S. DOE's Low-Income Energy Affordability Data (LEAD) Tool , the national average energy burden for low-income households is 8.6 percent, three times higher than for non-low-income households which is estimated at three percent. In some areas, depending on location and income, energy burden can be as high as 30 percent. Of all U.S. households, 44 percent, or about 50 million, are defined as low-income.[ 15 ] 

A Utility Dive analysis of a recent survey found that New England and the South, on average, pay more in energy costs than other regions.[ 17 ] Also, large shares of Northeastern neighborhoods have housing price-income ratios that would stretch middle-income family budgets.[ 18 ] This, in addition to elevated rates of high and severe energy burden, show that many residents in the Northeast and Mid-Atlantic struggle to afford fundamental needs such as housing and energy. 

A study from the University of California, Berkeley, Energy Institute at Haas found that Black households in the U.S., particularly those considered to be low-income, pay disproportionately more for energy needs as compared to white households.[ 19 ] 

Hispanic and Latinx Americans are the largest minority group in the U.S. In 2016, 52 percent of Latinx Americans surveyed by Pew said they experienced racial discrimination.[ 21 ] A 2019 study on discrimination and health impacts found that 17 percent of Latinx Americans avoided seeking health care for themselves or family members due to anticipated discrimination while 31 percent reported facing discrimination when seeking housing.

“The complexity of factors impinging on Hispanic health requires addressing the social determinants of health related to the quality of the social and physical environment where Hispanics live and work, including neighborhoods, housing, transportation, and environmental and employment conditions.”[22] Eduardo Velasco-Mondragon et al, Hispanic health in the USA: a scoping review of the literature

Energy Insecurity and Climate Change

Households experiencing energy insecurity suffer greater effects of climate change such as extreme temperatures as they may have less ability to adapt and respond to extreme temperatures. As the climate crisis continues to worsen, extreme weather events become more frequent and more aggressive and temperatures begin to rise. At the same time, households experiencing energy insecurity pay higher energy bills and are still unable to achieve thermal comfort. The  urban heat island effect  means that concentrated urban areas with less green spaces, often where low- and moderate-income communities and communities of color are located, suffer higher temperatures for extended periods of time.

Temperatures and energy consumption are higher in low- and moderate-income communities and communities of color where there is a higher ratio of hardscape to green space than in more affluent neighborhoods. [ 23 ]

“We find that the average person of color lives in a census tract with higher surface urban heat island intensity than non-Hispanic whites in all but six of the 175 largest urbanized areas in the continental United States. A similar pattern emerges for people living in households below the poverty line relative to those at more than two times the poverty line.”[24] Angel Hsu, Disproportionate exposure to urban heat island intensity across major US cities

Decades ago, racial disparities were introduced into our policy structures at various levels of government with the intent to withhold power; legacies of these inequities continue to marginalize communities of color and low- and moderate-income communities. [25]

While the root causes of inequities often boil down to racism and/or classism, there are many exacerbating factors that worsen existing inequities. This StoryMap investigates a few of the causes most pertinent to building decarbonization:

• Utility Rate Structure
• Program Design
• Landlord-Tenant Split Incentive
• Treatment of Manufactured Housing
• Costs and Financing
• Weatherization Program Limitations
• Workforce Inequalities

“When we become Americans, we accept not only citizenship’s privileges that we did not earn but also its responsibilities to correct wrongs that we did not commit. It was our government that segregated American neighborhoods, whether we or our ancestors bore witness to it, and it is our government that must now craft the remedies.”[26] – Richard Rothstein, The Color of Law

Utility rate design, typically a top-down regulatory decision-making process, can exacerbate inequities through regressive rate design, which disincentivizes customer energy reduction and prevents cost savings. While most NEEP states are decoupled (utility revenue is not dependent on volumetric sales), there are other aspects of rate design that have inequitable outcomes. These include fixed charges, where some aspect of the utility bill (customer charge, billing system charge, sometimes energy efficiency and distributed energy resource programs via a “societal benefits charge”) is the same for every customer, regardless of usage, income, or other scaled system. Fixed charges places disproportionate burden on those with lower income. Similarly, residential demand charges and time-of-use rates can be punitive to households that cannot control or monitor their energy consumption patterns. It is important that, as we continue to decarbonize our energy system, leaders design utility rates with equity in mind.  

Energy efficiency and decarbonization programs must be designed to ensure equity in program implementation and delivery, and to overcome market inequities that exacerbate the inequitable distribution of program benefits, as detailed below.

When program assessment processes such as cost-benefit analyses and evaluation, measurement, and verification (EM&V) do not adequately account for all costs and benefits, the program is likely to be inequitable.[ 28 ] Traditional cost-benefit testing inventories all costs and benefits of programs and are used to determine which programs are implemented, but unfortunately in some states, these tests only account for utility costs and energy savings and not non-energy benefits such as health and societal impacts. While cost-benefit analyses continue to evolve, there is much opportunity for expanding upon the non-energy benefits included in energy efficiency program evaluation. [ 29 ] When non-energy benefits and other externalities aren’t included in a cost-benefit test, programs that would be both cost-effective and align with decarbonization and other environmental policy goals are eliminated. 

Health, safety, and cost barriers can prevent low- and moderate-income households from implementing energy retrofit measures. In order to equitably decarbonize our buildings, we must first address the fundamental health, safety, and cost priorities of all households. The federal Weatherization Assistance Program (WAP) and Low-Income Home Energy Assistance Program (LIHEAP) do not adequately alleviate weatherization barriers in a home and therefore do not serve a significant portion of residents who could benefit from the programs. WAP allows just 15 percent of a project’s budget to address necessary health and safety issues. For an average project, the maximum budget for health and safety is just over $700 and is often not enough to address the many health and safety issues. Weatherizing a home with health and safety issues such as mold, asbestos, or structural damage may cause further harm, so projects with significant health and safety needs are often deferred indefinitely.[ 36 ]

While the current workforce has brought energy and building advancements to many consumers, energy efficiency employers struggle to find qualified candidates.[ 37 ] A skilled energy and building contractor workforce is needed to sustain home energy investments. At the same time, there is a need for specific skilled professionals to address certain health and safety concerns such as repairing a roof or foundation before weatherization.

Clean energy jobs can offer competitive pay and an expanding array of opportunities, however, women and people of color are noticeably underrepresented in the clean energy and building workforce. The American energy efficiency workforce employs more men than women and a smaller proportion of Hispanic and Black people compared to the national workforce.[ 38 ] The vendor solicitation process also often leads to inequitable outcomes: industry leaders note that, too often, women- and minority-owned businesses and job candidates have historically not been selected at rates comparable to their white and male counterparts.[ 39 ] Small businesses also suffer under the traditional vendor or partner solicitation process. 

Practices that continue to exacerbate existing energy inequities must be changed in order to achieve equitable building decarbonization for the Northeast and Mid-Atlantic region. Inequities are so intertwined in our everyday structures that no single solution, or single institution, can untangle them. Fortunately, there are some solutions available to begin to implement equitable practices, and they all begin with listening to, involving, and working with historically marginalized and/or excluded communities. Continue reading " Near-Term Strategies for Centering Energy Equity " for more information.

Understanding energy inequities and the practices that exacerbate them is the first step to centering equity in decarbonizing our buildings. Key takeaways include:

• Current inequities are rooted in historical racism and classism, and are perpetuated even by well-meaning efforts if equity is not placed front and center
• Achieving a state of energy equity entails continually pursuing structural, procedural, distributional, and transgenerational equity
• Energy burden and energy insecurity data reflect a state of energy inequity in the Northeast and Mid-Atlantic region
• Many traditional energy efficiency initiatives do not center equity and must be reformed with restorative justice 
• Energy inequities disproportionately harm historically marginalized and/or excluded communities

[1] Angela Park, “Equity in Sustainability: An Equity Scan of Local Government Sustainability Programs”, Urban Sustainability Directors Network, 2014.  https://www.usdn.org/uploads/cms/documents/usdn_equity_scan_sept_2014_final.pdf 

[2] The Avarna Group, Diversity, Equity, and Inclusion Vocab.  https://theavarnagroup.com/wp-content/uploads/2016/01/Vocab-Sheet-v6.pdf  

[3] Initiative for Energy Justice, Glossary.  https://iejusa.org/glossary-and-appendix/  

[4] Healthy People 2030, Social Determinants of Health.  https://health.gov/healthypeople/objectives-and-data/social-determinants-health  

[5] Carolyn B. Swope and Diana Hernández, "Housing as a determinant of health equity: A conceptual model," 2019.  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7146083/   

[6] Nadja Popovich and Brad Plumer, "How Decades of Racist Housing Policy Left Neighborhoods Sweltering." The New York Times, 2020.  https://www.nytimes.com/interactive/2020/08/24/climate/racism-redlining-cities-global-warming.html 

[7] "Energy Burden in Milwaukee: Study Reveals Major Disparities & Links to Redlined Areas." Sierra Club.  https://www.sierraclub.org/sites/www.sierraclub.org/files/sce-authors/u560/2392%20MilwaukeeEnergy_Report_06_high%20%281%29.pdf 

[8] Brenda Richardson, "Redlining's Legacy of Inequality: Low Homeownership Rates, Less Equity for Black Households." Forbes, 2020.  https://www.forbes.com/sites/brendarichardson/2020/06/11/redlinings-legacy-of-inequality-low-homeownership-rates-less-equity-for-black-households/?sh=2f6e0c852a7c 

[9] Carolyn B. Swope and Diana Hernández, "Housing as a determinant of health equity: A conceptual model," 2019.  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7146083/   

[10] Jamal Lewis and Diana Hernández, "Energy Efficiency as Energy Justice: Addressing Racial Inequities through Investments in People and Places," 2019.  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7966972/  

[11] Barbara Moran, "Mapping Project Explores Links Between Historic Redlining And Future Climate Vulnerability." WBUR 2021.  https://www.wbur.org/news/2021/03/05/haverill-merrimack-climate-redlining-maps 

[12] “The State of the Nation’s Housing 2021”, Joint Center for Housing Studies of Harvard University, 2021.  https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_State_Nations_Housing_2021_Embargoed.pdf 

[13] “The State of the Nation’s Housing 2021”, Joint Center for Housing Studies of Harvard University, 2021.  https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_State_Nations_Housing_2021_Embargoed.pdf 

[14] Angela Park, “Equity in Sustainability: An Equity Scan of Local Government Sustainability Programs”, Urban Sustainability Directors Network, 2014.  https://www.usdn.org/uploads/cms/documents/usdn_equity_scan_sept_2014_final.pdf 

[15] U.S. Department of Energy, Low Income Energy Solutions.  https://www.energy.gov/eere/slsc/low-income-community-energy-solutions 

[16] Ariel Drehobl et al., “How High are Household Energy Burdens?”, American Council for an Energy-Efficient Economy, September 2020.  https://www.aceee.org/sites/default/files/pdfs/u2006.pdf 

[17] Scott Van Voorhis, “New England and the South shoulder the highest energy costs, WalletHub survey finds”, Utility Dive, July 8, 2021.  https://www.utilitydive.com/news/new-england-and-the-south-shoulder-the-nations-highest-energy-costs-walle/602989/ 

[18] Cecile Murray and Jenny Schuetz, “Housing in the US is too expensive, too cheap, and just right. It depends on where you live”, Brookings, June 21, 2018.  https://www.brookings.edu/research/housing-in-the-u-s-is-too-expensive-too-cheap-and-just-right-it-depends-on-where-you-live/ 

[19] Bridget Reed Morawski, “In America, Black families pay more for energy than white families, says study”, S&P Global, June 24, 2020.  https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/in-america-black-families-pay-more-for-energy-than-white-families-says-study-59180525 

[20] Ariel Drehobl et al., “How High are Household Energy Burdens?”, American Council for an Energy-Efficient Economy, September 2020.  https://www.aceee.org/sites/default/files/pdfs/u2006.pdf 

[21] Erin Blakemore, “The Brutal History of Anti-Latino Discrimination in America'', History, updated August 29, 2018.  https://www.history.com/news/the-brutal-history-of-anti-latino-discrimination-in-america 

[22] Eduardo Velasco-Mondragon et al., “Hispanic health in the USA: a scoping review of the literature”, Public Health Reviews, December 7, 2016.  https://publichealthreviews.biomedcentral.com/articles/10.1186/s40985-016-0043-2 

[23] U.S. Environmental Protection Agency, Heat Islands.  https://www.epa.gov/heatislands 

[24] Angel Hsu et al., "Disproportionate exposure to urban heat island intensity across major US cities", May 25, 2021.  https://www.nature.com/articles/s41467-021-22799-5 

[25] Richard Rothstein, "The Color of Law; A forgotten history of how our government segregated America," 2017.

[26] Richard Rothstein, "The Color of Law; A forgotten history of how our government segregated America," 2017.

[27] Southern Environmental Law Center and Caroline Golin, The Greenlink Group, December 2015, "A Troubling Trend in Rate Design".  https://www.southernenvironment.org/uploads/news-feed/A_Troubling_Trend_in_Rate_Design.pdf 

[28] Ariel Drehobl and Lauren Ross, "Lifting the High Energy Burden in America's Largest Cities." American Council for an Energy-Efficient Economy, 2016.  https://www.aceee.org/sites/default/files/publications/researchreports/u1602.pdf 

[29] Samantha Caputo et al., "Non-Energy Impacts Approaches and Values." NEEP, 2017.  https://neep.org/sites/default/files/resources/NEI%20Final%20Report%20for%20NH%206.2.17.pdf 

[30] “The State of the Nation’s Housing 2020”, Joint Center for Housing Studies of Harvard University, 2020.  https://www.jchs.harvard.edu/state-nations-housing-2020 

[31] Jacob Talbot, “Mobilizing Energy Efficiency in the Manufactured Housing Sector”, American Council for an Energy-Efficient Economy, July 2012.  https://www.aceee.org/sites/default/files/publications/researchreports/a124.pdf 

[32] Dylan Tucker et al., "Manufactured Housing in Rural America: How States are Supporting Energy Efficient Homes and Reducing Energy Costs for Residents." National Association of State Energy Officials, 2021.  https://naseo.org/data/sites/1/documents/publications/Manufactured%20Housing%20in%20Rural%20America.pdf 

[33] Robert Walton, “DOE to propose first efficiency standards for manufactured homes in almost 25 years”, UtilityDive, July 14, 2021.  https://www.utilitydive.com/news/doe-to-propose-first-efficiency-standards-for-manufactured-homes-in-almost/603214/ 

[34] Ruth Ann Norton et al., “Leading with Equity and Justice in the Clean Energy Transition”, Green & Heathy Homes Initiative.  https://www.greenandhealthyhomes.org/wp-content/uploads/2021-GHHI-Leading-with-equity_wp_Final.pdf 

[35] Alain Sherter, “Nearly 40% of Americans can’t cover a surprise $400 expense”, CBS News, May 23, 2019.  https://www.cbsnews.com/news/nearly-40-of-americans-cant-cover-a-surprise-400-expense/ 

[36] Ruth Ann Norton et al., “Leading with Equity and Justice in the Clean Energy Transition”, Green & Heathy Homes Initiative.  https://www.greenandhealthyhomes.org/wp-content/uploads/2021-GHHI-Leading-with-equity_wp_Final.pdf 

[37] Sarah Truitt, Juliana Williams, and Madeline Salzman, "Building the Efficiency Workforce." National Renewable Energy Laboratory, 2020.  https://www.nrel.gov/docs/fy20osti/75497.pdf   

[38] “Energy Efficiency Jobs in America”, E2 and E4TheFuture, November 2020.  https://e4thefuture.org/wp-content/uploads/2020/11/National-Summary_EE-Jobs-in-America.pdf 

[39] Nydia M. Velázquez, "The State of Black-Owned Small Businesses in America." Committee on Small Business, 2021.  https://smallbusiness.house.gov/uploadedfiles/bob_report_final.pdf?fbclid=IwAR3EmNI-k1UARFLC-ZONg4_DWA5Azk-f2D_xfgmHYo7owDekkSwQPoTi2OI