Is California climate law worsening pollution in communities of color?

California’s main tool for fighting climate change is at a crossroads. Gov. Jerry Brown sees the so-called cap-and-trade system of buying and selling pollution permits as key to cutting greenhouse gas emissions nearly in half by 2030. The California Chamber of Commerce calls it an illegal tax, and the program could collapse if a lawsuit now before a state appellate court is successful.

But the chamber isn't alone in its disdain for the program. Some environmental activists want to scrap the program too. 

Magali Sanchez Hall is one of them. She lives in Wilmington, a low income, Latino neighborhood tucked amid the Port of Los Angeles, the 110-freeway, railroad tracks and oil refineries.

Standing on the street where her family has lived for 20 years, she points from house to house.

“The people that live here, the mother died of cancer. The people who live here, three people died of cancer. My aunt that lived here is a survivor of cancer,” she said.

There are so many sources of pollution near by, it’s hard to know what’s making people sick. There’s a dusty warehouse next door that exports alfalfa from the ports. A block away, diesel trucks work a busy storage yard where shipping containers are stacked four high. And visible at the end of her street is the Tesoro oil refinery – a major emitter of greenhouse gasses and toxic chemicals like benzene.

Sanchez Hall wipes her finger across the hood of a car, and it comes up black with soot.

“It’s a combination of all these pollutions that are coming from everywhere,” she said.

Given all this, one might think that Sanchez Hall would be excited about cap and trade, California’s program to get polluting companies, like refineries, to reduce their emissions. But many environmental justice activists say the program hasn’t actually worked as designed. In fact, during the first two years that cap and trade was in effect, industry emissions increased in places like Wilmington, according to a study released last fall. 

“We did not expect to find that there would be actual emissions increases in these neighborhoods. And that’s what we found,” said Manuel Pastor, director of the Program for Environmental and Regional Equity at the University of Southern California and a co-author of the paper that documented this trend.

What isn’t clear is whether cap and trade caused emissions to go up, or whether the increase happened because the state was coming out of a recession during the study period spanning 2013 and 2014.

To understand how a program designed to decrease emissions could possibly result in an increase instead, look to the three ways that companies can comply with the statewide cap on carbon emissions.

First, they can reduce their emissions directly. Second, they can buy permits on the California carbon market to keep emitting. And third, they can pay someone to reduce their emissions instead. This is called an offset, and it’s the the aspect of cap and trade that environmental justice activists are most critical of. They say offsets allow companies to get credit for reducing carbon emissions somewhere else while continuing to emit inside California.

For example, a refinery in Wilmington can plant a tree farm in Michigan. The trees soak up carbon dioxide emitted in Michigan, but not what comes out of the refinery. That’s good for the climate globally, but in effect, it allows that refinery to keep emitting carbon dioxide in Wilmington because its emissions have been offset. According to the USC study, 76 percent of offsets were for out-of-state projects.

A refinery seen from the Pacific Coast Highway at Sanford Avenue in Wilmington on Tuesday afternoon, Jan. 31, 2017.

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Maya Sugarman/KPCC

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Most worrisome to environmental justice advocates is the fact that carbon dioxide isn't the only thing coming out of smokestacks. “It’s coming out with toxic chemicals and smog forming chemicals," said Julia May, a senior scientist with Communities for a Better Environment.

May said because there’s nothing in cap and trade that requires a company to directly cut its emissions, the program has the potential to make disproportionally polluted neighborhoods like Wilmington even dirtier.

But defenders of cap and trade say as the state lowers the emissions cap, the amount of carbon dioxide that companies are allowed to emit will come down, forcing companies to make direct emissions reductions.

“It’s probably premature to try to judge the program’s total effectiveness at this point because it hasn’t been in effect very long, only a couple years,” said Dave Clegern, a spokesman for the California Air Resources Board, which runs cap and trade.

The mainstream environmental community – groups like the Natural Resources Defense Council, the Environmental Defense Fund and many of the state’s leading environmental law scholars – agrees with the state.

Ann Carlson is co-director of the Emmett Institute on Climate Change and the Environment at UCLA. She thinks it's important to force polluters to clean up; however, she said cap and trade should focus on reducing greenhouse gases, while other policies, like the federal Clean Air Act, can address air pollution.

"I'd like to see cap and trade play out to see how well it works because I think it has a lot of promise to produce large reductions in greenhouse gas emissions really cost effectively,” she said.

(See more of Carlson's thoughts on the issue here.)

But there are race and class issues at play here. Most of cap and trade’s defenders don’t live in disproportionately polluted neighborhoods. They can afford to wait for the state to lower the cap on carbon emissions.

Meanwhile, environmental justice advocates like Martha Dina Argüello, the head of Physicians for Social Responsibility, are fed up.

“I don’t exaggerate when I say you’re fighting for the right of people to breathe clean air, nothing is more fundamental," she said. "For you to tell me that’s not politically expedient? Well, I don’t care.”

The state air resources board says it is listening to environmental justice advocates. Its new plan for meeting California’s latest climate law calls for direct emissions reductions from refineries.

But environmental justice activists say it's not enough. They want the state to eliminate cap and trade entirely. Instead, they want a system based on direct pollution reductions, or a carbon tax -- anything to avoid the commodification of pollution, which they think is abhorrent. 

Any reduction in emissions can’t come soon enough for people like Magali Sanchez Hall. Down the street from her house in Wilmington, just a few blocks from the railroad tracks where oil tanker cars rumble loudly, there is a park she used to try to exercise in.

“But it just feels weird to be exercising and breathing all this, you know?,” she said, gesturing at the sky. “It’s just weird.”

She felt like she was contaminating her body more than she was helping it. And she wants that to change. Not in the future. Now.

Update: this story has been updated to clarify the position of Ann Carlson, co-director of the Emmett Institute on Climate Change and the Environment at UCLA School of Law.