Do environmental justice policies narrow inequality?
Presented by:
Paige Weber
Energy and Resources Group
University of California, Berkeley
Friday, April 18, 2025
12:00 pm-1:15 pm
Taylor-Hibbard Seminar Room (Rm103)
How does improving the local environment impact welfare inequality? This paper combines an equilibrium location sorting model with a novel reduced-form estimator of pollution’s general equilibrium effects to quantify the welfare disparity consequences of demographically-targeted environmental policies. We apply this framework to recent years in Chicago, using data on individual migration histories and air pollution, an atmospheric transport model, and a research design leveraging local air pollution changes from remotely-determined natural gas supply shocks. Differentiating between effects on welfare and environmental exposure, we find that policies designed to narrow environmental inequality can actually widen it in some cases because of ensuing relocations. While we find that policies generally narrow welfare inequality, we find little variation between policies that do and do not have demographic targets, suggesting that sorting largely nullifies the policies’ initial distributional intent.
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