Systemic Racism in Environmental Economics, with Jimena Gonzalez Ramirez and Sarah Jacobson

Notable Quotes

• Excluding local stakeholders harms local communities: “In some cases, policymakers have tried to formalize who owns the resource without input from the local communities. And as outside organizations or individuals come in and claim those rights, these policies have harmed local communities.” —Jimena González Ramírez (9:03)
• Domino effects of discrimination: “If our field doesn’t consider systemic racism in our benefit-cost analysis, our recommendations may lead to less investment in environmental quality for communities of color, further amplifying inequities.” —Jimena González Ramírez (11:40)
• Importance of community-engaged research: “Most of us do research just by having our brilliant idea, hanging out in our office, and tapping away on our computer—like, I’m going to come up with this great thing, I’m going to do this great analysis, and I’m just going to put this paper out into the world. But our research is about real people. The truly procedurally just way to do research, when that research is about communities, is to involve those communities.” —Sarah Jacobson (18:10)
• Aligning economics research with real-world problems: “If you look at the distribution of problems that our papers are about and are published in our journals, it is not the same as the distribution of the problems as we see them in the world. I think that’s because we are not being ambitious enough. We’re really focusing on the features of the policies that exist and what would happen if we made marginal tweaks to them. But we can think of a lot of big problems that aren’t being studied much right now in environmental economics.” —Sarah Jacobson (29:06)

Top of the Stack

• “Looking at Environmental and Natural Resource Economics through the Lens of Racial Equity” by Amy Ando, Titus Awokuse, Jimena González Ramírez, Sumeet Gulati, Sarah Jacobson, Dale Manning, Samuel Stolper, and Matt Fleck
• Achieving Environmental Justice: A Cross-national Analysis by Karen Bell
• “Sensing Air Pollution Exposure in New York City Schools, with Beia Spiller” from Resources Radio
• Work on waste sanitation infrastructure from Catherine Coleman Flowers
• An Immense World by Ed Yong
• Solito: A Memoir by Javier Zamora
• “Can we talk to whales?” by Elizabeth Kolbert

The Full Transcript

Daniel Raimi: Hello, and welcome to Resources Radio, a weekly podcast for resources for the future. I'm your host, Daniel Raimi. Today, we talk with Jimena González Ramírez, associate professor of economics and finance at Manhattan College, and Sarah Jacobson, professor of economics at Williams College.

Jimena and Sarah are coauthors on a recent working paper that examines the connections between systemic racism and research in the field of environmental and resource economics. Their analysis challenges some long-held practices in the field and suggests a variety of approaches to reduce the ways in which economics research is shaped by and can contribute to racism in our world. This might sound like an abstract issue, but Jimena and Sarah provide really clear examples about how these dynamics unfold and how we can start to overcome them. Stay with us.

Jimena González Ramírez from Manhattan College and Sarah Jacobson from Williams College, welcome to Resources Radio. It's great to have you here.

Sarah Jacobson: Thank you. So happy to be here.

Jimena González Ramírez: Likewise.

Daniel Raimi: I think it's the first time on the show for both of you, so, again, welcome. I'd love to start us off with the same question that we ask all of our guests, which is—how did you get interested in working on environmental issues, whether the inspiration came as a kid or emerged later in your lives? In any order you prefer, how did you get drawn into this field?

Sarah Jacobson: Do you want to go first, Jimena?

Jimena González Ramírez: Sure. I guess I have been interested in environmental issues since I was little. Growing up in Colombia made me appreciate its biodiversity, plants, birds, and connection to nature. However, it wasn't until I got to grad school at Iowa State University that I discovered the field of environmental economics. I didn't even know it existed before getting to grad school, so I wasn't going to choose that as my field. But, at Iowa State, I was lucky to work for Cathy Kling as a research analyst, who introduced me to super interesting conservation research and who inspired me to pursue environmental economics as my main field. And I'm very happy with this choice.

Daniel Raimi: That's so cool. I didn't know Cathy was there at that time. She's been on the show before and, of course, is a great friend of Resources for the Future (RFF). That's really cool.

Sarah, how about you?

Sarah Jacobson: Yeah, actually, it's not that different from Jimena. As a kid, I was always very into nature and also a real tree hugger. I was the weirdo in fifth grade who wore a pin that said “only elephants should wear ivory” and that kind of thing. But, later on in life, I was just busy doing other things and was not really as engaged with it, until I finally ended up in grad school. I was actually not even doing environmental economics. I didn't really think about it—similar to Jimena—until I bumped into Laura Taylor, who's now at North Carolina State, but at that time was at Georgia State. She was like, "You should probably do environmental economics." I thought about it, and I was like, "She's totally right." And so the rest is history at this point.

Daniel Raimi: That is really cool. Great. Well, I would love to ask you more questions about your backgrounds, but maybe I'll have to do that some other time when we're at a conference or something.

For now, I'd love to ask you some questions about a working paper that you recently published with a large group of coauthors. The name of the article is “Environmental and Natural Resource Economics and Systemic Racism.” We're going to dive into that topic today, and I think it's going to be really fascinating. But first, what was the motivation behind this article? What were you trying to accomplish? What inspired you to write this thing?

Sarah Jacobson: This project has really been a labor of love, and this group of people, I also have to say, is absolutely the single best bunch of people in the world. So, I am super lucky to have gotten to work with all of them. Various groups of us are moving forward on other stuff together, as well. We started talking about this in the summer of 2020, when a lot of people were having conversations about racial justice. I think a number of us were feeling like, Where is the reckoning in environmental and natural resource economics?

So, a number of us had separately identified some things that we were worried about in the field, and we just started talking about, “What can we bring? What is the conversation that we would want to start, and where do we think that could take us as individuals in the field?”

We coalesced around this idea of writing what we feel like is a call-to-arms paper, where we say, “Look, this is a world in which systemic racism has shaped so many things around us.” That means that even when you think you're just trundling along doing your work, whether you are doing work on water pollution or doing work on nonmarket valuation or whatever you're working on, you think that has nothing to do with race. But the problem with systemic racism is that it is systemic. That's the whole idea. It ends up in everything. What we're not doing is we're not contributing to the literature on environmental justice as it's developing in economics right now, which is super important, I'm a huge fan of that literature. What we're doing, rather, is basically saying, "We are all doing work that is affected by racism.” We need to think about both how racism is affecting the quality of the science that we're doing, and we also need to think about whether the science that we're doing could unintentionally be furthering racist outcomes.

We're trying to give concrete examples that relate directly to a lot of methodologies that a lot of us use, and so I'll just give an example. When we think about valuing a lot of things in environmental economics, a lot of times we're going to look at the prices of things that are sold on a market to value things that are not sold on a market. For example, we look at the prices of houses to see how much people value having clean air or how much people value being close to green space—all those nice things. The problem is, in a world of systemic racism, house prices are not a pure free-market expression of people's preferences. We have redlining, we have real estate agents steering people one way or another, we have credit that is making it more difficult for folks of color to borrow, and we have outright racial hostility that makes it so it is in many ways more costly or difficult for people of color to live in certain areas versus others.

When we look at those housing prices, what we're seeing is a reflection not purely of the preferences that we're trying to measure, but they're actually really tainted. So, our science is not great. And when we make policy recommendations based on that, then we might be furthering racial inequity, because we might, for example, be inferring that folks of color value clean environments less when it's really just that there are other barriers that we're not representing.

Daniel Raimi: Right. That's a great example and a really helpful way to get started.

You and your coauthors in this paper really focus on four main issues that potentially contribute to racial injustice and that might also be affected by racial injustice. We're just going to talk through them one at a time. The first of the four that you identify is the tendency for economists to focus on maximizing efficiency rather than looking at how benefits and harms are shared—or, in economics parlance, we use the term “distributional outcomes.” Can you talk first about this issue of efficiency versus distribution? Just help us understand it, maybe give us an example or two.

Jimena González Ramírez: Thank you, Daniel. This is a great question. Efficiency over distribution is one way in which our field may be affected by and may unintentionally further racial inequity. Let me discuss a few examples. First, our field tends to emphasize the need for individual and clearly defined rights to manage common resources like forests. The assumption is that formalizing who owns the forest or who is responsible for it helps manage it in a better way. However, many forests in developing countries have been successfully managed by Indigenous communities who have traditions to care for the forest as a group. In some cases, policymakers have tried to formalize who owns the resource without input from the local communities. And as outside organizations or individuals come in and claim those rights, these policies have harmed local communities. For instance, some outsiders may get compensated for carbon offsets from forests that have been managed by Indigenous communities. As the voices of Indigenous groups have been undervalued or ignored in some instances, these policies diminish their ability to advocate for their benefits, traditions, and institutions.

Another way in which our field may be affected by racial inequality is related to benefit-cost analysis. Basically, policies are pursued if their benefits are greater than their costs. But, to estimate benefits, methods have been developed to assign value in dollars to environmental improvements. The problem is that some methods result in estimates that disadvantage minorities, since wealth and income have been affected by systemic racism. For example, people of color have been discriminated against in housing markets, being denied access to neighborhoods and better amenities.

As Sarah mentioned, we can consider redlining, which is a discriminatory practice that denies financial services like loans and insurance for people who live in neighborhoods perceived as lower quality. These neighborhoods typically include a large percentage of minorities, and there have been documented cases in which people of color have been offered worse loan terms, denied employment opportunities, offered lower salaries, or given lower housing offers or valuations. These discriminatory practices affect the wealth and income of people of color, and, since our methods to estimate environmental benefits consider income, our estimates are also affected by systemic racism. In fact, not considering discrimination may suggest that people of color appear to value environmental improvements less.

One more thing I would like to add is that research by sociologists concludes that people of color in the United States have outdoor preferences that have been affected by experiences of harassment, violence, and exclusion. If people of color don't feel welcome at a park due to racism or harassment, they may avoid parks or go less frequently to parks, even though they may enjoy park activities such as playing basketball, soccer, birdwatching, or hiking. So if our field doesn't consider systemic racism in our benefit-cost analysis, our recommendations may lead to less investment in environmental quality for communities of color, further amplifying inequities.

Daniel Raimi: Those are great examples. When you said birdwatching, my mind immediately went to that famous case of the birdwatcher in Central Park. I forget his name, but someone called the police on him for birdwatching, which is just so awful and bizarre.

Let's talk now about the second issue that you focus on and identify as a key issue for folks in this field to think about really hard, which is procedural justice. We've talked a little bit about procedural justice on the show before, but can you give our listeners a reminder about what that term means and then tell us why ignoring it in the context of economic research makes a big difference?

Sarah Jacobson: For sure. I'll be honest—it's been a little bit of a journey for me in learning about procedural justice, as well. As Jimena was just talking about, we in economics for a long time focused almost entirely on efficiency and said, "Equity in the sense of distributional justice is somebody else's problem." And now I think it's super exciting that so many people are thinking about distributional equity as being—

Daniel Raimi: Sarah, that's great. I'm sorry to interrupt you, but one thing I realized is that we actually haven't defined the term efficiency. Just for the non-economists who are listening—when we say efficiency, what do we mean?

Sarah Jacobson: With efficiency–I always say to my students—we're talking about, How high is the pie? My students do not get the reference. But we're talking about the size of the pie; efficiency versus equity is about who is getting the slices, versus procedural justice, which is, really, who is making decisions about baking the pie in the first place and about what this whole pie situation is going to be. I guess that's how I'd put the three together.

Daniel Raimi: Perfect, thank you.

Sarah Jacobson: Economics is inherently a field that philosophers would call consequentialist—we focus a lot on the outcomes. In fact, if you look at textbooks for undergraduates, they will often talk about caring about anything other than who gets what in the end and how much there is in the end as being basically irrational, which is special to economists. I think most philosophers would consider that to be a very particular approach to the world. Most of the world actually also cares about process, procedure, and how we get there. In fact, when we talk about environmental justice in economics, we often talk about who has disparate exposure to pollution, disparate access to natural amenities. But everybody else's definitions of environmental justice include process and procedure.

A common definition includes fair, participatory, and inclusive structures and processes of environmental decisionmaking—that's from an article by Bell in 2014. Giving communities a voice, treating everyone with respect and impartiality, and being transparent is another common set of elements. These are so commonly accepted that even the US Environmental Protection Agency includes procedural justice in its definition of environmental justice. They talk about equal access to the decisionmaking process as part of environmental justice. That's what procedural justice is. Should I talk a bit about why I think it's important?

Daniel Raimi: That would be great.

Sarah Jacobson: First, I think procedural justice is, for most of us, intrinsically important. We all want to have our voices heard, we all want to feel respected, and to feel like we have some agency in the things that are affecting us. So, I think there's intrinsic value there. But even if you are a dyed-in-the-wool consequentialist economist who will not give up on outcomes being the most important thing, you actually should also care about procedural justice, because in many of these situations we're talking about putting in place policies that are going to affect local communities. But who is going to have the insights into how exactly this policy is going to play out? Whether there are little power imbalances, whether there are some little snags that the policy might run into, and whether there are ways in which the policy just won't work, the local communities are going to really have the visibility into what the actual problems are.

If we want things to go well, then procedural justice should not be just about, "We had a community meeting, and we told them what we're going to do," but actually really engaging communities as things are going on. As an example, Jimena and I actually dug a lot into the conservation-markets literature in thinking about this project. We found, sort of similar to a lot of the things that Jimena has already mentioned, that in many cases procedural justice has not been upheld when conservation markets are put in place in developing countries. We found many cases for REDD or even REDD+ projects. REDD is the UN's project for reducing emissions from deforestation and forest degradation by essentially conserving land for forests in developing countries mostly. REDD+ was developed on top of that, in part, to try to empower communities more, but even so, we found many cases in which communities were not informed, their voices were not heard, and in some cases the documents weren't even translated into the local languages, so they couldn't have been informed about what was going on.

As Jimena points out, this is another case where procedural justice can actually have instrumental value. There's a bunch of research that shows that when local and Indigenous communities are involved in conservation, that's where you get really good conservation outcomes.

I do want to mention one other thing. That's all procedural justice when we're thinking about evaluating policies. When we're thinking about our own research, we also can think about procedural justice. Most of us do research just by having our brilliant idea, hanging out in our office, and tapping away on our computer—like, I’m going to come up with this great thing, I’m going to do this great analysis, and I'm just going to put this paper out into the world. But our research is about real people. The truly procedurally just way to do research, when that research is about communities, is to involve those communities. So, there's this movement right now for community-engaged research. I know you've had some great people on the show; in fact, I think you had Beia Spiller on the show talking about some community-engaged research, if I remember right?

Daniel Raimi: Yes, indeed.

Sarah Jacobson: This is a little bit of a scary process for a lot of scholars, because you really need to engage communities from the very start. You really are, by definition, giving up control, because you're giving some power to the communities that you're working with. I've never done this; it sounds both terrifying and exhilarating, but I think it's a really important area that a lot of people are moving into to make sure that their work not only has good outcomes but is informed by justice all the way through.

Daniel Raimi: That's a great answer. As someone who's involved in some engaged research now, I can verify that it is indeed very challenging and completely exhilarating and fascinating and an amazing process to go through. You just learn so much more and the context is so much richer when you're really working with people who are affected.

The next question that I'd love to ask either of you, whoever would like to respond to it, is kind of similar. It involves history and context. Oftentimes, let's say back in the day, economists would get a data set, analyze the data set, write up the paper, and that's the end of the process. It's all about the data and the now. And sometimes history and social context gets completely ignored as part of that analysis. It's always totally baffled me, because I always liked the history the best. So, can you help us understand how this process manifests in the field and why it's a problem?

Jimena González Ramírez: I'll take this one. I also share the sentiment that it's mind-blowing that this hasn't been more incorporated into our research. But one way in which our field ignores historical and social context is by overlooking important factors that have affected people of color. I'll give other examples later on, but I already mentioned redlining as a practice that has established barriers for minorities to get loans and move to neighborhoods with better amenities.

As systemic racism has negatively affected the financial well-being of minorities, our field ought to consider it when employing methods that have income as an input. Our field cannot ignore that people of color have been denied loans or given worse loan terms. Even people of color who own homes have faced systemic racism. Consider stories about lower housing valuations given to African American homeowners or African American homeowners staging their homes as if white people live there to get better offers or appraisals.

That's a big part of it. But also, let's consider, now, fighting for environmental quality. This is harder for people of color due to discrimination and wealth inequality. Obtaining the information to advocate or oppose proposals comes at a cost in terms of time, money, and political capital. If people of color have to work two jobs, they won't have the time or resources to advocate for a policy change. They're just trying to do their best to get by. In addition, people of color may not have access to the necessary information to advocate for or fight against policies. Ignoring this cause or information differences may result in environmental policies that may perpetuate racial inequity.

Another way in which our field ignores historical and social context is related to the management of common resources like forests. As I mentioned earlier, our field often prioritizes policy recommendations that are focused on establishing private, individual, and enforceable rights. The issue here is the fact that putting those ideas into practice occasionally overlooks the local traditions of communities of colors that result in unfair outcomes. It is problematic when institutions and voices of Indigenous communities are disregarded. It is also problematic that the unintended incentives created by these policies and the harm they may cause to local communities are not given the consideration they deserve.

Our paper cites several examples from the Global South that exemplified these issues. Some conservation projects have started without communities knowing about them. Some projects, as Sarah mentioned, weren't even translated for local communities or communities didn't understand them well. In Africa, we see more private acquisitions of land previously held by communities. In Peru, external actors in the search for profits have convinced Indigenous communities to give up their land rights. Another example is in Tanzania, where natural resources have been taken away from communities to extract the benefits from conservation markets. There are more examples that show how communities of color in the Global South have been negatively affected by conservation efforts that didn't consider local institutions, traditions, as well as historical and social context.

Daniel Raimi: That's great. Another example that comes to my mind from here in the United States is the history of the imposition of private property rights on Native American communities. If folks are curious about this, just look up the Dawes Act from 1887, I think, and you'll learn about the very troubled history of this here in the United States, as well.

Fourth in our list of issues that are affected by and could unintentionally contribute to systemic racism that you and your coauthors describe in the paper is the argument that economists focus too much on problems that they consider tractable—potentially solvable. What do you mean by this? Can you give a couple of examples? And why does it matter for this field of research and the outcomes that we care about?

Sarah Jacobson: We can think about this focus on tractability in two different ways. I'll talk a little bit about looking too much at things that are tractable to model—easy to model—and things that are tractable to solve, or easy to solve.

Thinking about tractable modeling, so many of your listeners are economists, many of you are not. Those of you who are economists know that we love our calculus, so we want everything to be nice and smooth. You want to be able to take a nice derivative, have a nice marginal condition that's going to pop out the solution that says, "Oh, this is going to equal that." That's great, but the problem is that a lot of times what happens with systemic racism in our society, is that it makes it so that the calculus won't work so nicely, because it's putting in place these frictions. That's going to make all these little bumps and jumps that's going to make it so that our very nice equilibrium predictions didn't work.

I know that might sound a little bit abstract, so let me just bring it back to the context we've touched on a couple of times already of housing. We have these great models, and there's some beautiful papers about how people will move around, they will sort into different neighborhoods based on what their preferences are, what the amenities are, what the good things are that are available in the different places, and all of that super interesting work, but it does rely on this idea that people can just move smoothly from one place to another. The problem is that not everybody—well, nobody can move smoothly; I don't know if any of you guys have moved lately, but it's not fun—but it's not just the cost of hiring a mover and all those things, it's also the barriers that might be in place.

Jimena and I have both already mentioned that folks of color, especially Black families in the United States, encounter all kinds of barriers trying to move into different neighborhoods. So, the sorting process is not going to be nearly as smooth as the models would have it. The models as they are for who lives where and why they live where they live—they really don't serve the purpose of thinking about where people are living right now in the United States and fixing them so that they would solve that. It's not just a matter of adding a little bit of a friction parameter; it'll actually be much more difficult to do the math.

Fortunately, economists are very smart people, so I actually would like to think that these are problems that we can solve, and I would love to see some work that people can do on that front, because, again, we have really good tools in economics, and I think that we can answer those kinds of questions. So, that's on the tractable-model side. Those models—I think they limit what we can say, because I do think our theory is powerful. They limit what we can say about the problems that we're facing right now.

Then, thinking about the tractable-solution side—a lot of times, when we are working on projects, we're focusing on something that's very localized. We're studying the impact of some very specific, narrow thing, and that makes it so that we're not looking at big problems and big solutions. I myself am an example of this. One of my first papers was looking at land conservation policies and what happens after the term of a conservation policy. So, the implications of a paper like that might be, well, we should have different kinds of terms or different kinds of stipulations in the contracts or whatever.

That's all well and good, but it's like this wise men of Chelm story. I don't know if any of you are familiar with the wise men of Chelm, but it's this Jewish way of telling folktales. So, there's a bunch of people that are looking for keys to the temple. Somebody's lost the keys. Where are the keys? They're looking, and somebody comes up, and they're looking in this area where there's a bunch of light, and they say, "Oh, is this where you lost the keys?" and the people say, "No, but this is where the light is."

That's kind of, I think, what we do a little bit in terms of looking at solutions and problems. If you look at the distribution of problems that our papers are about and published in our journals, it is not the same as the distribution of the problems as we see them in the world. I think that's because we are not being ambitious enough. We're really focusing on what are the features of the policies that exist and what would happen if we made marginal tweaks to them.

But we can think of a lot of big problems that aren't being studied much right now in environmental economics. For example, think about sanitation in rural America. I'm sure a lot of your listeners have read Catherine Coleman Flowers's work on the poor sanitation that many people who live in rural America have to deal with and all of the health problems that result from that. I have really not seen a lot of papers about that, even though that's affecting a lot of people's lives. There are way more papers on whether we can reduce energy or water usage by a couple of percent by tweaking people's bills. I'm not saying that's not important, but I'm just saying we need more of the other.

Then, one other little thing is thinking about big solutions that we're not talking about. There are some huge solutions that would have really big environmental implications that I have never seen an environmental economics paper about. One of them is giving land back to tribal communities that had their land taken away. That would have huge environmental and natural resource implications. I've never seen a paper about that—also, reparations to American descendants of slavery. We know that inequities feed into environmental injustice, and so reparations would have huge environmental implications, but I've never seen an environmental economics paper about that, either. I think we have great tools both on the theory side and on the empirical side and the policy-analysis side; we just need to think bigger.

Daniel Raimi: That's such a great answer, and certainly, I think, a call to arms. It seems appropriate in terms of characterizing your comment there and characterizing the paper itself.

There are a million more questions I would love to ask both of you, Jimena and Sarah, but we'll have to do it another time. I really encourage people to check out the paper and think about it. It's really provocative in all sorts of good ways. The link to the paper is, of course, in the show notes, it's called “Environmental and Natural Resource Economics and Systemic Racism.”

Let's go now to the last feature that we ask all of our guests, which is to recommend something that you've read or watched or heard that you think is great. It can be related to the environment or not; we're pretty flexible.

Sarah, let's start with you. What's at the top of your literal or metaphorical reading stack?

Sarah Jacobson: This is a literal reading stack. I am right now very slowly but very delightedly making my way through Ed Yong's book from a couple of years ago, which is called An Immense World. It's about animal perception, and it basically goes through all of the senses and more senses than you thought actually existed. The idea, really, is that each of us—humans and all the other species—our perceptions are different windows into the world, and everybody's windows are very different. I think that, in addition to being a bunch of cool animal facts, it's also like we would understand the world better if we thought for a minute about looking out other animals’ windows, as well.

Daniel Raimi: That sounds amazing. It reminds me of a New Yorker article I read recently about some people using artificial intelligence technologies in the field to try to understand whale language and to try to communicate with whales, which sounds science-fiction-y and great.

Jimena, how about you, what's at the top of your stack?

Jimena González Ramírez: I recently read a book titled Solito by Javier Zamora. Javier tells his story of migrating from El Salvador at age 10 to the United States. So, he goes country by country. He's sent to meet his parents who are in the United States. He goes alone. He goes with a coyote and other migrants. But it's a super powerful story told with a lot of detail and is very emotional. I highly recommend this for those who want to understand the journey of migrants more. Now, it starts not only from El Salvador and Central America, but now all the way down in South America. People are crossing the Darién Gap between Colombia and Panama. It's a great book. Please check it out—Solito.

Daniel Raimi: Great. That sounds fascinating. Again, we'll have links to both of those in the show notes so people can check them out.

Well, one more time, Jimena González Ramírez from Manhattan College and Sarah Jacobson from Williams College, thanks to both of you for coming on the show. We really appreciate it.

Sarah Jacobson: Thank you so much for having us. This has been super fun.

Jimena González Ramírez: Thank you so much.

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