Quantifying the social equity state of an energy system: environmental and labor market equity of the shale gas boom in Appalachia

Abstract

A fundamental societal concern in energy system transitions is the distribution of benefits and costs across populations. A recent transition, the US shale gas boom, has dramatically altered the domestic energy outlook and global markets; however, the social equity implications have not been meaningfully assessed and accounted for in public and private decision making. In this study, we develop and demonstrate a systematic approach to quantify the multi-dimensional equity state of an energy system, with a focus on the shale gas boom in the Appalachian basin. We tailor variants of standard equity metrics as well as develop new empirical and analytical methods and metrics to assess spatial, temporal, income, and racial equity as it relates to air quality, climate change, and labor market impacts across the natural gas supply chain. We find moderate to high spatial inequities with respect to the distribution of production (Gini coefficient (η) = 0.93), consumption for electric power generation (η = 0.68), commercial, industrial, and residential end use (η = 0.72), job creation (η = 0.72), and air pollution-related deaths (η = 0.77), which are largely driven by geographically-fixed natural gas abundance and demand. Air quality impacts are also regressive, such that mortality risk induced by natural gas activity generally increases as income decreases; for example, mortality risk (m) (in units of premature mortality per 100 000 people) for the lowest income class (<$15 000; m = 0.22 in 2016) is higher (18%–31%) than for the highest income class (>$150 000; m = 0.27 in 2016). These risks are higher for white (m = 0.30 in 2016) than non-white (m = 0.16 in 2016) populations, which is largely a result of the demographics of rural communities within the vicinity of natural gas development. With respect to local labor market impacts within producing counties, we find marginal declines in income inequality (2.8% ± 1.0%) and poverty rates (9.9% ± 1.7%) during the boom, although household income increases for the wealthiest and decreases for the poorest. At a systems-level, there is an implied air quality-employment tradeoff of 3 (<1 to 7) job-years created per life-year lost; this tradeoff varies spatially (−1100 to 4400 life-years lost minus job-years created), wherein the job benefit outweighs the air quality costs in most producing counties whereas in all other counties the reverse is true. We also observe temporal inequities, with air quality and employment impacts following the boom-and-bust cycle, while climate impacts are largely borne by future generations. Cross-impact elasticities (ε), which measure the sensitivity between different types of impacts, reveal that employment increases are sensitive to and coupled with increases in air and climate impacts (ε = 1.1 and ε = 1.3, respectively). The metrics applied here facilitate the evaluation and design of countervailing policies and systems that explicitly account for social inequities mediated through energy infrastructure, supply, and demand. For example, in future energy system transition, such equity metrics can be used to facilitate decisions related to the siting of low-carbon infrastructure such as transmission lines and wind turbines and the phase-out of fossil fuel infrastructure, as well as to demonstrate changes in distributional tradeoffs such as the decoupling of environmental and employment effects.