Incorporating Environmental Equity into NC DEQ’s Regulatory Impact Analysis

Abstract

Incorporating Environmental Equity into NC DEQ’s Regulatory Impact Analysis is a project in collaboration with the North Carolina Department of Environmental Quality’s (NC DEQ) Division of Water Resources (DWR) Planning Section. The goal is to provide DWR a standard operating procedure to formalize and operationalize environmental justice and equity concerns into their rulemaking process, which entails creating regulations and rules to carry out the laws and statutes outlined by the legislature. The project’s central objective is to ensure that DWR provides stewardship for all North Carolinians by "intentionally and systematically integrat[ing] socioeconomic, race and ethnicity considerations into the regulatory impact analysis (RIA) process” (NC DEQ Division of Water Resources). Regulatory Impact Analyses are used to “identify, quantify, monetize, and communicate the anticipated effects of the proposed rule” by divisions within NC DEQ and given to the Environmental Management Commission as a way to understand proposed rules before making their decision (NC DEQ Division of Water Resources).

With the rising prioritization of environmental justice (EJ) in federal and state landscapes, this project comes at a relevant time. While there seems to be broad interest for equity, governmental agencies and departments are not always given clear guidelines about how to move forward with practices to consider and integrate environmental justice. We hope that this project could have implications for other state environmental agencies and the NC DEQ as a whole.

This project explores two target areas for the DWR’s considerations to integrate and address equity: 1) incorporating equity considerations into the RIA, and 2) furthering DWR’s knowledge of how to better incorporate community input and engagement into RIA development and the general rulemaking process.

We used the following guiding questions to assist in our research as well as the development of the project deliverables: How can equity considerations be incorporated into NC DEQ’s policy development and rulemaking processes? Are there identifiable gaps in DWR’s development of regulatory impact analysis that could lead to inequities or overlooked communities? How can NC DEQ’s rulemaking process better achieve procedural equity and include community engagement that builds trust and meaningfully addresses concerns?

We focused our research on four categories to inform our methodologies: 1) what other state environmental agencies and municipalities are currently doing to incorporate equity; 2) what the federal government is currently doing and has historically done to incorporate equity and justice into their rulemaking processes; 3) the current economic and academic literature around how equity can be incorporated into RIAs and cost-benefit analyses; and 4) the affected communities and whether the RIAs adequately reflect their needs. This literature review informed the research questions posed in the remainder of the project, additional deliverables, and the basis for interviews that we conducted.

As a result, the methods we utilized included an analysis of existing methods and frameworks to integrate equity into rulemaking procedures; a comparison of the integration of equity in other state environmental departments; interviews with various stakeholders involved in rulemaking; and the development of supplementary deliverables for the client’s use (including a literature review examining how to incorporate equity into rulemaking; a comparison document examining other state environmental agencies; an environmental justice educational primer; a policy matrix; and, a standard operating procedure containing our final recommendations).

There were several main findings from our research, analysis, and interviews: equity considerations can be tied into the cost-benefit analysis portion of the regulatory impact analysis and outside the cost-benefit analysis, though both have advantages and disadvantages. One key finding is the importance of improving procedural equity in order to understand regulated communities and the cumulative effects from regulations that they may face before attempting to promulgate new rules. Additionally, community engagement can be improved through adjustments to the public comment process and the creation of documents, content and websites for public audiences. As such, we’ve recommended tweaks to current Standard Operating Procedures steps in the RIA development process in addition to the inclusion of three new steps: 1) Understanding the foundations of justice and equity; 2) Initiation of public comment earlier on in the RIA process; 3) Development of an RIA for public consumption.

This master’s project holds an immense amount of potential as any change that our clients at the Division of Water Resources are able to successfully implement in their Division can mean larger structural change within NC DEQ. A lot of the challenges and obstacles we discovered through our research, interviews, and analysis point to inequity being caused by bureaucratic methodology or historic structures. A fair and just regulatory NC DEQ is one that serves ALL North Carolinians, as stated in the agency’s mission. In order to accomplish this, the agency’s procedures must be examined in order to understand where the rulemaking is unjust and to gain insight as to how to further procedural and distributive equity in a way that creates a just process and fair treatment for all residents. This project focuses on the first step of the rulemaking process: the analysis of impacts of proposed rules, an integral starting point for authentic integration of equity considerations.