Energy Justice, Explained

Impact: Energy justice: what is it and why do we need it? – Monash Business School

Social justice is the concept that calls for fairness in society. It’s very closely tied with human rights. Equity is one of the main principles of social justice. It takes into account the effects of discrimination to achieve an equal outcome for all parties involved.

This concept is increasingly coming under debate as states and countries pursue their relentless push for industrialization. Governments view economic growth and job creation as the inviolable rights of nations, however, there are rising concerns now that this push for development must not trample the individual rights of the population.

It happens all too often that people are forced out of the land that they have occupied for generations or are made to live with the disruption caused by massive development projects in their communities. The environmental impact of development on a large scale is often brushed under the carpet as well.

What is energy justice?

The energy sector remains one of the biggest drivers of economic growth. It attracts billions in new investments and leads to significant job creation. These benefits are attractive to governments who capitalize on the opportunity in a bid to achieve higher growth. 

However, this industry can also cause a lot of disruption. Thousands of people across the globe are forcibly displaced from their homes and communities to make way for new power plants, pipelines, mines, extraction sites, and more.

The resulting environmental impact can also be harmful. Towns and farms remain at risk of flooding when new dams are built. Entire communities are razed to the ground to expand energy infrastructure. Water sources get polluted by these developments which have long-term effects on the health of residents in that community.

Individual voices aren’t enough to stop the industrial juggernaut in its tracks. That is what has given birth to the concept of energy justice. It seeks to achieve equity between the economic benefits of the energy sector while also providing a remedy to the economic, social, and health considerations of the communities directly impacted by it.

History of energy justice

Energy justice has its roots in environmental justice. That concept surfaced in the 1970s and it revolved around the consequences of environmental degradation and the steps that needed to be taken from a social justice perspective.

The environmental justice movement became a national protest that galvanized communities across the United States. One of the earliest examples of protests related to environmental justice is from 1982 when a hazardous waste landfill was proposed in a predominately African-American community of Warren County, North Carolina. 

The landfill would accept PCB-contaminated soil which was the result of the illegal dumping of toxic waste alongside roadways. A massive protest against this proposed landfill was launched by the National Association for the Advancement of Colored People with several other organizations. 

The protest wasn’t able to stop the creation of the landfill but it did spark a nationwide movement that would ultimately push the conversation towards energy justice. Many residents in small, low-income, and minority communities across the United States felt that they were targeted for such projects largely because of their demographics. 

They gradually built momentum which led to the federal government establishing the Environmental Equity Working Group in 1992. Two years later, the Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations executive order was passed. It directed that the federal government would make environmental justice a part of its decision-making process.

How energy justice intersects with socioeconomics and race

In the 1980s, the General Accounting Office conducted a study to review the hazardous waste siting decisions in the US EPA Region 4. The region includes the states of Kentucky, Georgia, Florida, Alabama, Mississippi, North Carolina, South Carolina, and Tennessee. These states have a higher proportion of minority residents. The study found that there were four hazardous waste landfills in the region. 

African Americans were the majority of the population in three of the communities where the landfills were situated. Furthermore, it was also found that at least 26 percent of the population in these communities had incomes below the poverty level. 

Subsequent studies have also found that race was a major factor in siting hazardous waste facilities with three out of every five African Americans and Hispanics living in a community that had a toxic waste site.

This has understandably given minority communities reason to believe that they are targeted for unwanted land uses as they’re rarely in a position to fight against these decisions due to their socioeconomic status. 

What we can do to achieve energy justice

There’s a need to find common ground to achieve energy justice. Governments need to strike a balance between their development needs and the effects that these projects have on individuals and communities. Another critical element of energy justice is equitable access to resources. 

The decision-makers should be guided by principles that ensure that no community remains underserved due to lack of availability or affordability of energy resources. Human and environmental rights must be protected in the pursuit of the production and distribution of energy. There should be no compromise on transparency and accountability. 

Wherever possible, governments should opt for more sustainable methods instead of prioritizing swift exploitation of natural resources for rapid gains. Inter-generational equity is perhaps the most important aspect in ensuring energy justice. The decision-makers have to be very mindful of the impact that their decisions will have on the generations to come.

Energy justice and banking

There’s no question about the fact that energy projects that rely on fossil fuels are causing a great deal of harm to our planet. The threat of climate change has already materialized in the form of erratic weather patterns and the significant reduction in the world’s ice caps.

While some banks are making efforts, at least on the surface, to show their commitment to green initiatives, the vast majority of them are still bankrolling projects that are putting the planet on the path of destruction. 

Many are surprised when they find out that the four biggest banks in America loan more than $240 billion of their customers’ deposits to fossil fuel projects. That money is utilized by corporations to build new pipelines, expand oil drilling operations, excavate new coal mines, and more.

Banks don’t tend to take the environmental and energy justice factors into account when extending financing for these projects. The simple fact remains that this is not something they need to be concerned about as it’s not related to their business. 

As long as companies that are not showing a commitment to energy justice can secure financing for their projects that could have ramifications for future generations, the dream of a truly equitable energy sector may not be realized.

Find sustainable neobank solutions that work towards energy justice

Neobanks have taken a different approach to the problem. These innovative banks realize the customers want to support organizations that share the same values as them. For many, the protection of our planet is a value that they can’t compromise on. 

However, the problem then becomes finding companies that are in line with their values. This becomes particularly difficult when trying to find a bank because most of them are still lending out money to the fossil fuel industry hand over fist. 

Aspiration is one of the world’s first neobanks to make a 100% commitment to clean money. We promise never to use our customers’ deposits to fund fossil fuel projects that are destroying the planet. Aspiration is also playing its part in fighting climate change. We plant a tree every time our customers swipe their cards. 

With every $1,000 transferred to Aspiration, customers can achieve the planet-saving impact of 6,000 fewer miles driven by an average car.

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