Good Neighbor Agreements

Abstract

In February 2021, the United States rejoined the Paris Agreement, a binding international treaty on climate change adopted on December 12, 2015, that sets emissions targets for several developed countries. The Trump administration had previously withdrawn from the agreement on November 4, 2020, arguing that other major state parties had failed to sufficiently reduce their emissions. In the United States, many state and local leaders were determined to address climate change issues despite a lack of federal leadership. During those months, states created policies supporting emissions targets, caps, pricing, renewable energy, carbon dioxide storage, and nuclear energy.

One of the policies that emerged during that period is the Virginia Clean Economy Act (2020), which requires the Virginia Air Pollution Control Board to develop regulations to reduce carbon dioxide emissions from electric power generation. An emission trading system (also referred to as “cap-and-trade”) is one of the tools available to the board. As part of that act, the board must also consider the resulting environmental benefits and burdens on environmental justice communities, which has proved challenging for at least two key reasons. First, Virginia lacks enforceable environmental justice laws that specifically define how the state will approach environmental justice issues. Second, a federal court recently rebuked the board for failing to adequately address a similar environmental justice issue when approving a natural gas station.

Due to the aforementioned challenges, the board will need to consider how to address environmental justice in a manner that satisfies both the relevant legal requirements as well as those of the environmental justice communities as it implements the cap-and-trade. Environmental justice communities are traditionally understood to be low-income communities or communities of color that often face disproportionate environmental risks and harms (also known as "overburdened communities"). To operationalize environmental justice in Virginia’s emissions-trading program, the board should initiate meaningful dialogue with affected environmental justice communities. In addition, one of the key objectives of that dialogue process should be the development and execution of a Good Neighbor Agreement (GNA) between utility companies and environmental justice communities, in which the relevant parties define and limit the impacts of those companies on the relevant communities.

To provide clarity to this issue, I first examine how emission trading disproportionately affects environmental justice communities. By applying the Accountability for Reasonableness (AFR) framework, I explore the necessity of meaningful stakeholder engagement in the decision-making process. Having established the importance of stakeholder engagement, I then examine the key elements of effective stakeholder engagement: identification, evaluation, and engagement. I focus next on how stakeholder engagement should lead to deliberation that creates a GNA between utilities and environmental justice communities. I then conclude that GNAs developed through meaningful engagement and deliberation not only support a just transition and environmental justice, but also benefit the community as a whole.