Decarbonize Housing: Centering Equity While Phasing Out Natural Gas

As federal climate action falters, America’s mayors have a new plan to stop global warming: ban the use of natural gas in homes.

While roughly 58% of American households use gas-powered stoves or heaters, research suggests that doing so is bad for our health and the environment. In use, gas stoves release nitrogen oxide, a harmful pollutant associated with asthma and reduced lung capacity. When not in use, gas stoves leak methane, a greenhouse gas that contributes to global warming. In place of gas appliances, cities like Berkeley, New York City, and Seattle have mandated that newly constructed buildings feature electric-powered stoves and heaters. The hope is that these changes will reduce air pollution and slow climate change.

As cities move to eliminate natural gas from the housing sector, however, complementary policies may be necessary to ensure the process of “building electrification” produces shared benefits.

For one, the environmental benefits of natural gas bans will crucially depend on how cities generate electricity. In states like California, Washington, and New York, electricity grids are among the nation’s cleanest, relying largely upon renewable and low-pollution energy sources. This means that if households in these cities use electricity for cooking and heating, extra electricity use will likely not harm local environments. Other areas considering electrification, like Denver, Colorado, rely heavily on coal to generate electricity, meaning that additional electricity use could increase local pollution. These effects could be particularly pronounced for historically disadvantaged communities living near fossil fuel power plants.

Electricity costs are also an important concern. Households in California face some of the highest electricity prices in the nation, making it challenging to switch from gas to electric appliances. Prices are high in part because utility providers in California charge households fees every time they use electricity. These fees generate revenue for things like wildfire mitigation, renewable energy subsidies, and infrastructure development projects. Households that generate their electricity (i.e., via solar panels) however, do not pay such fees. Because high-income households are more likely to have the resources to generate their electricity, in practice, low-income populations effectively subsidize these programs. To address this inequity, some have suggested that electrical utilities should charge all residents a fixed charge proportional to income. Although fees that exclusively target solar users have been controversial in California, income-weighted fees for all electricity users could provide a more equitable method of raising revenue while still encouraging the use of renewables.

As natural gas usage declines in several large American cities, it is uncertain who will pay for the nation’s gas pipelines. For decades, natural gas companies have spread the costs of developing and maintaining pipeline infrastructure across their customers’ monthly bills. In the coming years, however, this business model is likely to become unsustainable. With many high-income cities phasing out natural gas, a shrinking and increasingly low-income population may soon bear a disproportionate burden of pipeline maintenance costs. In practice, this could result in rapidly increasing gas bills and otherwise diminished service for the people least equipped to handle these changes. These issues could also exacerbate existing socioeconomic and racial disparities in monthly heating expenditures, which scholars attribute to variation in housing construction quality.

To address these concerns, some­­ argue that regulators should prohibit gas companies from including the costs of pipeline infrastructure in customers’ monthly bills. Others suggest that high-income individuals could pay “exit fees” when they transition from gas to electric heating sources. These funds could be used to ensure that existing pipeline infrastructure is well maintained, preventing spills and other environmental hazards.

Challenges notwithstanding, there are many reasons to be excited about the accelerated adoption of electric stoves and heaters in houses across the country. In addition to reducing air pollution and greenhouse gas emissions, electric stoves may serve as “gateway appliances” that build momentum for further decarbonization efforts in the housing sector. By developing pollution-free electricity and ensuring infrastructure costs are not shifted onto low-income households, local governments can spur an equitable energy transition in America.