Does Climate Investment Funding Intensify Green Gentrification in San Francisco-Oakland-Berkeley Bay Area?

Abstract

Climate change has negatively impacted human health, livelihoods, and key infrastructure in urban areas, especially within communities with economically and socially marginalized residents. To reduce exposure and vulnerability to climate change, public climate investment, mainly in urban green infrastructures, plays a key role in accelerating urban climate adaptation and improving urban resilience (Intergovernmental Panel on Climate Change Working Group II 2022). California Climate Investments (CCI) supports a series of projects statewide to reduce greenhouse gas emissions and deliver other economic, environmental, and public health benefits by distributing the proceeds from the carbon credit auction of California Cap-and-Trade, one of the largest carbon markets in the United States. These investments, however, have been shown to have a limited positive impact on vulnerable communities and are accompanied by displacement and gentrification caused by rising property value and rents, which may delay damage long-term prospects for social equity and environmental justice (Anderson et al. 2018; Cushing et al. 2018).This study explores the impact of climate investment on gentrification in the San Francisco-Oakland-Berkeley Metropolitan Statistical Area (SFOB MSA) between 2015 and 2020. The CCI invested in 262 climate-related projects within SFOB MSA from 2015 to 2020 with the whole investment amount of 1.2 billion US dollars approximately. We use California Climate Investment Implemented Project Dataset (CCIIP) from the California Air Resources Board with detailed investment information and the American Community Survey (ACS) 5-year Estimate Data. We construct the climate investment index to show the spatial distribution of investments with the consideration of spatial spillover effects of investment spatially. We also identify the gentrified area where middle- and upper-class households moved in and replaced residents of low-income communities and identify gentrification types by implementing spatial analysis and the K-Means clustering algorithm. In the end, we conduct a time-series statistical analysis on climate investment intensity and the identified gentrification index, as well as the demographic characteristics of different communities in SFOB MSA. Our preliminary results suggest that between 2015 and 2020, in the San Francisco MSA (1) Gentrification, defined as the middle- and upper-residents moving into inner-city declining neighborhoods as the consequence of the replacement of original low-income residents, was associated with the implementation of climate investments; (2) The degree and characteristics of gentrification are influenced by the intensity and type of climate investments; (3) Public transportation, fire prevention, and building upgrade investment have shown significant impact on the gentrification process. These results can improve empirical understanding of the relationship between climate investment and green gentrification, which government and planners could use to minimize or mitigate the negative impact on disadvantaged communities and realize environmental justice.