The Case for Equitable Building Decarb in the Midwest

By taking an equity-first approach to building decarbonization, the Midwest can unlock not just a core climate solution, but also vital health, economic, and jobs benefits, and ensure they reach the communities that need them most.

We cannot tackle the emissions driving catastrophic climate change without reducing fossil fuel use in buildings. As a part of his plan to “Build Back Better,” President Biden laid out ambitious goals to do just that, requiring action that can yield benefits in the Midwest and across the nation. The transition from burning gas, propane, or oil inside buildings and toward reliance on efficient electric appliances to reduce energy waste and harmful emissions from our homes and businesses is known as building decarbonization.

Despite the Midwest’s cold winters and historic reliance on fossil fuels, declining technology costs and an increasingly clean electric grid are making building decarbonization environmentally and economically beneficial throughout the Midwest. As the region begins the long process of squeezing pollution out of buildings, we have an enormous opportunity on our hands: the ability to center the needs of Black, Brown, Indigenous, and low-income communities, prioritizing equity in decarbonization efforts from the start. By taking an equity-first approach, the Midwest can unlock not just a core climate solution, but also vital health, economic, and jobs benefits, and ensure they reach the communities that need them most.

Building Decarbonization is Climate-Positive Today

Electrifying buildings will reduce carbon emissions in the Midwest—and those pollution benefits can start today. For example, analysis from Elevate Energy and the Rocky Mountain Institute shows that in Illinois, where the burning of fossil fuels in buildings accounts for 18 percent of the state’s energy-related carbon emissions, swapping out a gas furnace at the time of replacement for a super energy efficient electric heat pump will save emissions over the lifetime of the appliance, even with conservative assumptions about renewable energy growth in the state. This holds true across the Midwest: even if the energy mix were to stay as is (thankfully, we expect the power grid to get much cleaner, as outlined below) heat pumps will reduce carbon emissions in all Midwestern states compared to gas furnaces.

What’s even better is that the Midwestern states are taking ambitious steps toward lowering the high level of carbon emissions associated with electricity generation, ensuring the power that flows to high efficiency electric appliances like heat pump space and water heaters is progressively cleaner, including:

As the electric grid becomes cleaner across the region, the emissions reductions from installing electric technologies like highly efficient heat pumps will be even greater.

Given the urgency of the climate crisis, and the reality that gas infrastructure built today will continue to emit greenhouse gasses for years to come, it is imperative that we begin the process of decarbonizing our buildings now. However, it is not enough to simply cut carbon emissions. Communities of color face long-standing systemic inequality in energy burden, health, housing, and economic opportunity. By putting equity first, building decarbonization policy can avoid exacerbating, and instead begin to address, such inequalities.

What is “Equitable Decarbonization”?

As the Greenlining Institute and the Energy Efficiency for All coalition lay out in their Equitable Building Electrification Framework, equitable decarbonization recognizes that Black, Brown, Indigenous, and low-income communities face historic and ongoing systemic discrimination, resulting in vast disparities in health, homeownership, economic opportunity, and more. Understanding these injustices, equitable decarbonization efforts prioritize the health and resilience of marginalized communities, providing the benefits of reducing emissions—cleaner air, healthier homes, more affordable energy, and good jobs—to those who need them most. At the same time, taking an equity-first approach is an initial step toward avoiding unintended consequences. An equity-first approach would both ensure that all households can cut their gas connections to avoid being stuck paying for an increasingly expensive gas system and also enact housing protections to keep residents from being displaced by upgrades in their buildings or neighborhoods.

Equity is as much about the process as it is about the product. Implementing equitable building decarbonization will not be possible without listening to, learning from, and following leadership of frontline communities. Equitable building decarbonization builds power in and gives control over policy-making to impacted communities. According to the Equitable Electrification Framework, stakeholders must:

  1. Begin by assessing communities’ needs; 
  2. Establish community-led decision making; 
  3. Develop metrics that track both clean energy and community benefits; 
  4. Ensure consistent funding and coordination across programs; 
  5. Use tracking metrics and feedback to improve existing and future programs.

While the policy solutions resulting from such a process will be tailored to the specific community, prioritizing equity would generally mean considering holistic strategies like “providing free appliance replacements, creating rules that protect against energy bill and rent increases, aggressively reducing energy use and improving health and safety within our homes, and targeting green workforce opportunities to workers who live in [environmental and social justice] communities.” Equitable decarbonization requires thoughtful and crosscutting solutions that utilize not only energy policy, but also housing, health, and labor solutions to create meaningful benefits for historically underserved communities while minimizing potential unintended consequences.

The Importance of Equitable Decarbonization in the Midwest

Communities across the Midwest can benefit from the full suite of potential benefits from equitable building decarbonization—healthier homes, lower energy burdens, more stable housing, and access to good jobs. However, those benefits can only be accessed by following the process discussed above, centering impacted community leadership, and tailoring policy to meet community needs.

Healthier Homes

Black, Indigenous, and other communities of color nationwide experience disproportionately poor air quality. This is especially true in Midwestern states, where non-white communities face some of the most disproportionate particular matter burden—meaning communities of color are more likely to be exposed to hazardous particle pollution created by fossil fuel combustion. Furthermore, racial disparities in proximity to polluting facilities are significantly greater in the metropolitan areas of the Midwest than other parts of the country.

Buildings contribute to this dangerous air pollution. Gas appliances like stoves, furnaces, and water heaters release carbon monoxide, nitrogen compounds, and other air pollutants, meaning they can have negative impacts on health. A comprehensive review of literature found that children living in a home with gas cooking had a 42% increased risk of experiencing asthma symptoms.

By switching to electric appliances, occupants can breathe healthier air and improve outdoor air quality as well. These upgrades are especially needed in the communities that face the worst pollution. Building decarbonization offers an opportunity to better the health and comfort of homes. However, without prioritizing equity (i.e. offering electric appliances at low or no cost and targeting programs toward pollution burdened communities), decarbonization initiatives risk only improving indoor air quality for families that can afford electric appliances and building upgrades, instead of families that would benefit most.

Addressing Energy Burden

Disproportionate energy cost burdens—defined as spending more than 6 percent of household income on energy—are a pervasive problem across the Midwest. In Illinois, low-income families spend an average of 13 percent of their income on energy. In Michigan, that number is 15 percent. These burdens are borne disproportionately by Black and Latinx households. A study of 48 U.S. metropolitan areas found that Black households experience a median energy burden 64 percent greater than white households, while Latinx households experience a median energy burden 24 percent greater than white households.

Building decarbonization presents an opportunity to reduce customer bills. Pairing electric appliances with energy efficiency, building upgrades, and protections against bill increases can help families spend less of their income on energy.

However, without an eye toward equity, building decarbonization runs the risk of instead deepening energy burden. Low-income customers, locked out of accessing new electric appliances, could end up stuck on the gas system as wealthier customers exit, leaving a smaller and smaller group of people behind to cover the cost of an increasingly expensive system. On the other hand, installing electric appliances without taking care to reduce overall energy usage could inadvertently leave customers with higher electricity bills, deepening energy burden. An equity-first strategy would prioritize energy efficiency, building upgrades, and consumer protections (i.e. bill assistance, percent of income payment plans, and shut-off protections) for low-income households, especially households of color.

Avoiding Displacement Risk

There is a national shortage of affordable rental housing, with Midwestern states having between 31 to 45 available affordable rental homes per 100 extremely low-income renter households. A substantial share of households face high rent burden, having to pay more than 30 percent of their income to rent. In every state in the Midwest, a greater share of Black, Hispanic, Asian, and other non-white renter households is burdened compared to the share of white renter households facing rent burden.

Share of Households with High Rent Burden
 All HouseholdsWhite HouseholdsBlack HouseholdsHispanic HouseholdsAsian/Other Households

The COVID-19 pandemic has only exacerbated the problem, pushing hundreds of thousands of households behind on rent and leaving them vulnerable to eviction. Up to 50 percent of households are at risk of eviction in Illinois, with similarly high percentages in several other Midwestern states.

At a basic level, building decarbonization will require investment in neighborhoods to improve building quality and install new appliances. Without well-designed policies and programs, there is a risk of displacement as builders and building owners pass the upfront improvement costs onto renters. An equity-first process can begin to address this risk. By centering and following the lead of impacted communities in the policy making process, decarbonization policy can be paired with strategies to preserve affordable units (i.e. rent caps), produce new ones (i.e. funding for public and deed-restricted affordable housing), and protect tenants (i.e. Just Cause eviction protections). Implementing a combination of energy efficiency, affordable housing, and tenant protection policies alongside decarbonization would lower cost burdens, allowing families to improve their homes and stay in them.

Creating Good Jobs

We already know that clean energy is an engine for economic recovery in the Midwest. In 2019, clean energy jobs grew more than twice as fast as overall employment in the region. Achieving the level of building decarbonization necessary to thwart the climate crisis will create millions of additional jobs directly in communities nationwide, including the Midwest, since building decarbonization will need to happen wherever people live and work. By creating equitable policy to ensure that building decarbonization jobs are good jobs—paying fair wages, with job security, opportunity for advancement, and available to people living in the communities where they are located—building decarbonization can be a powerful tool of labor justice as well.

Building the Vision for the Midwest

The work ahead on building decarbonization in the Midwest comes with immense possibility. Given that gas infrastructure built today will emit pollution and contribute to climate change for years to come, it’s critical that we stop digging the hole and get started on powering our communities with clean electricity now. As we begin with a near-blank slate, the Midwest can implement just processes and policies to invest in our homes and communities with equity in mind from the very beginning—pursuing not only climate justice, but also health, economic, housing, and labor justice.

By centering the needs and following the leadership of frontline communities, we have the opportunity to build a clean, healthy, resilient, and most importantly equitable future.

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