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Environmental Justice Update (March 2023)

March 16, 2023


This alert describes significant developments in federal and state initiatives relating to environmental justice (EJ), including several new federal policies under the Biden administration and legislative developments in New York and Washington state. Our prior update was issued in October 2022, and can be found here.

Federal Updates

CEQ Finalizes Climate and Economic Justice Screening Tool

On November 22, 2022, the White House Council on Environmental Quality (CEQ) released the final Climate and Economic Justice Screening Tool (CEJST) to identify marginalized and disadvantaged communities. The CEJST is intended to further the Biden administration’s goal of targeting 40% of new climate and clean energy projects to benefit such communities. While the final CEJST does not consider racial demographics, it does consider other distinctions such as redlining data to identify communities that have faced historic underinvestment, contaminated water sources, and transportation barriers, which should serve to expand the number of disadvantaged communities eligible for funding through the Justice40 Initiative. Current estimates project that these changes will increase the number of qualified groups by almost 14% compared to earlier iterations of the tool. The universe of eligible communities includes lands of federally recognized Native American tribes and locations of Alaska Native Villages, and CEJST Version 1.0 identifies projected climate threats such as floods, wildfires, legacy pollution, and lack of greenspace.

A committee within the National Academy of Science, Engineering and Medicine will track how environmental health and geospatial data can be used to improve CEJST. The committee also welcomes and will consider public comments on potential improvements through a feedback form. Developers and property managers who wish to access the information gathered under CEJST can visit the CEJST website.

EPA Adds Cumulative Impacts to EJ Legal Tools Guidance

On January 11, 2023, The Environmental Protection Agency (EPA) released cumulative impacts guidance as an addendum to the revised Legal Tools to Advance Environmental Justice document (discussed in our prior alert). Regulators have historically been constrained in addressing the impacts of pollutants on communities where multiple sources that individually operate within regulator limits have a deleterious impact in the aggregate. This addendum is EPA’s first legal guidance that analyzes how the agency may consider the collective impacts of contamination in a community. 

The guidance notes that EPA should take cumulative impacts into account during decision-making and take actions to avoid or mitigate such impacts. EPA Administrator Michael Regan underscored EPA’s commitment to “identifying and making appropriate use of every authority and tool available to EPA under the law to incorporate environmental and climate justice considerations.” The Clean Air Act (CAA), the Clean Water Act (CWA), the Resource Conservation and Recovery Act (RCRA), and other federal laws are cited in the guidance as sources of authority. EPA also plans to use this authority to address cumulative impacts in setting standards, making permitting decisions, allocating funds, and overseeing state programs, among other things.

EPA Publishes Clean Air Act Permits Guidance

In December 2022, EPA’s Office of Air and Radiation released “Principles for Addressing Environmental Justice in Air Permitting”. The document offers provisional guidance for regional air permitting staff on how to include EJ considerations in the CAA permitting process. Under the new guidance, regional air-permitting staff should apply these eight principles to permitting decisions:

1. Identify communities with potential EJ concerns;
2. Engage early in the permitting process to promote meaningful participation and treatment;
3. Enhance public involvement throughout the permitting process;
4. Conduct a “fit for purpose” EJ analysis;
5. Minimize and mitigate disproportionally high and adverse effects associated with the permit action;
6. Provide federal support throughout the air-permitting process;
7. Enhance transparency throughout the air-permitting process; and
8. Build capacity to enhance the consideration of EJ in the air-permitting process.

EPA is poised to use these eight principles to evaluate CAA permit applications in a checklist fashion. Applicants should consider advance analysis of these factors in the permit preparation process and be prepared for potential comment and feedback on EJ issues.

Applications Open for EJ-Focused IRA Grants

Under the Inflation Reduction Act (IRA) passed in August 2022, Congress earmarked roughly US$3 billion in grants for EJ projects. Applications are now open for the first US$100 million, available to community organizations for project planning. Additional grant opportunities will be released in the months ahead and can be used to fund larger projects, including green infrastructure in marginalized communities, urban forestry, and water or air filtration systems.

The grants will be awarded through two programs: the Environmental Justice Collaborative Problem-Solving Cooperative Agreement Program (EJCPS), which targets organizations that work to alleviate environmental and public health threats in their communities, and the Environmental Justice Government-to-Government Program (EJG2G), which focuses on cooperative partnerships between community groups and state and tribal governments.

Grant applications are due April 14, 2023, and will be reviewed by EPA’s new 200 person Office of Environmental Justice and External Civil Rights (described further in our prior alert). Community organizations applying for the initial grant round must satisfy specific criteria outlined in the application. Priority will be given to low-income and underprivileged communities that bear the brunt of environmental pollution. EPA will issue funding to grantees in the fall of 2023.

EPA to Distribute US$250 Million In Pollution-Reduction Grants 

On March 1, 2023, the Biden administration announced US$250 million in grants to communities across the country, with the goal of developing strategies to cut greenhouse gas pollution and construct clean-energy economies. Like the EJ grants discussed above, the funding for these pollution-reduction grants comes from the US$5 billion Climate Pollution Reduction Grants program created by the IRA. 

Each state, the District of Columbia, and Puerto Rico will receive US$3 million, and each of the 67 most populous metro regions will receive US$1 million. Territories other than Puerto Rico are eligible to receive up to US$500,000 each, and tribal governments will have access to US$25 million in noncompetitive planning grant funds, with up to US$500,000 being dedicated to single tribes. EPA anticipates that funds will be distributed in the summer of 2023. States are expected to use the money to create or update their climate action plans and engage with disadvantaged communities.

Treasury Launches US$10 Billion Program for Energy Subsidies

The Department of the Treasury is launching a US$10 billion energy subsidies program, which will include a new tax credit for wind and solar projects in areas that are resource-scarce. Applications for wind and solar projects in underprivileged neighborhoods will open in the coming months. These credits are reserved for communities where marginalized people will benefit most, such as tribal lands or areas that need affordable housing developments. These credits may be used with other tax incentives. Priority will be given to community-based organizations and to new market participants. For more on tax incentives, see our recent alert.

State Updates

Washington Revises EJ Legislation

Earlier this year, Washington lawmakers introduced H.B. 1347, which calls for using funds from the state’s new carbon emissions cap-and-trade system to perform annual health assessments to inform decisions under the state’s overarching EJ legislation, the Healthy Environment for All (HEAL) Act of 2021 (discussed in our prior alert). H.B. 1347 would also require organizations within the scope of the HEAL Act to provide updated lists of communities identified as overburdened and mandate consideration and mitigation of environmental and health inequalities in overloaded communities.1

Environmental Groups Challenge San Bernardino County Development on EJ Grounds

In December 2022, several environmental groups—the People’s Collective for Environmental Justice, the Center for Community Action and Environmental Justice, the Center for Biological Diversity, and the Sierra Club—filed suit against San Bernardino County, California alleging that it violated the California Environmental Quality Act (CEQA) by failing to evaluate EJ issues when it approved a new warehouse complex, the Bloomington Business Park. The plaintiffs assert that the project will expose a predominantly Latinx community to high levels of air pollution and will require the demolition of more than 100 homes, a move that would displace minority families. The complaint also alleges the permitting process was inaccessible to many residents because the county failed to provide Spanish-language versions of the executive summaries of the impact statements and hearings. Bloomington residents are 85.6% Hispanic or Latinx, and 67.8% of the community’s residents speak a language other than English at home, according to 2020 census data. The plaintiffs are seeking an injunction to stop the development. The case is People’s Collective for Environmental Justice et al. v. County of San Bernardino et al., in the Superior Court of the State of California, San Bernardino County.

New York Adds EJ Considerations to SEQRA

A New York state law approved in December 2022, incorporates EJ considerations into the environmental review process under amendments to the State Environmental Quality Review Act (SEQRA) and the New York State Department of Environmental Conservation’s (NYSDEC) permit approval process.

The law makes three major changes to the SEQRA review process. First, agencies will now be required to consider additional EJ criteria, including burdens on disadvantaged communities, when determining whether an environmental impact statement (EIS) is necessary under SEQRA. Second, NYSDEC must revise its SEQRA regulations to require lead agencies to consider potential environmental impacts on marginalized communities when deciding whether a proposed action may have a significant environmental impact. Third, where an EIS is required, it must include an evaluation of the “effects of any proposed action on disadvantaged communities, including whether the action may cause or increase a disproportionate [and/]or inequitable…pollution burden on a disadvantaged community.”

The law also makes key changes to NYSDEC’s permit review process. NYSDEC will be required to prepare an “existing burden report,” which will include baseline monitoring data for the two years prior to the permit application, for projects that may affect a disadvantaged community. If NYSDEC determines that a project will contribute to a disproportionate or inequitable pollution burden on a disadvantaged community based on the existing burden report, it cannot approve or renew a permit for the project.

The law will go into effect in June 2023.

The state’s cap-and-trade program, created by 2021’s Climate Commitment Act (CCA), launched on January 1, 2023. Under the CCA, qualified companies—those that generate a minimum of 25,000 metric tons of carbon dioxide annually—must compensate the agency for each metric ton of pollution. By 2050, the CCA aims to cut the state’s total emissions by 95%. Qualified companies will be able to purchase emissions allowances through an online auction and trade system.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. John Rousakis, an O’Melveny partner licensed to practice law in New York, Eric Rothenberg, an O’Melveny of counsel licensed to practice law in New York and Missouri, Chris Bowman, an O'Melveny associate licensed to practice law in California, and Hattie McKinney, an O'Melveny law clerk, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.


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