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Social Costs of Air Pollution

Paper Session

Saturday, Jan. 4, 2020 8:00 AM - 10:00 AM (PDT)

Manchester Grand Hyatt, Gaslamp D
Hosted By: Association of Environmental and Resource Economists
  • Chair: Patrick Baylis, University of British Columbia

How Clean is "Refined Coal"? An Empirical Assessment of a Billion-Dollar Tax Credit

Brian Prest
,
Resources for the Future
Alan Krupnick
,
Resources for the Future

Abstract

US tax law provides nearly $1 billion annually in tax credits for "refined coal", which is supposed to reduce local air pollution. Eligibility for the credit requires firms to demonstrate legally specified emissions reductions for three pollutants. Firms typically demonstrate eligibility through laboratory tests, but results from the lab can differ from those in practice. Using a nationally comprehensive boiler-level panel dataset, we find that emission reductions in practice are only about half of the levels required. We also show that the policy reduces social welfare. Because the tax credit is up for reauthorization in 2021, our work has immediate policy relevance.

The Mortality Impact of Fine Particulate Matter in China

Yazhen Gong
,
Renmin University of China
Shanjun Li
,
Cornell University
Nicholas J. Sanders
,
Cornell University
Guang Shi
,
Development Research Center of the State Council

Abstract

TBD

The social cost of leaded gasoline: Evidence from regulatory exemptions

Alex Hollingsworth
,
Indiana University
Ivan Rudik
,
Cornell University

Abstract

Lead is a potent toxin associated with a wide range of adverse health effects. In response to health concerns, the United States phased out lead from on-road gasoline during the twentieth century. However, regulatory exemptions continue to allow for its use in automotive racing and aviation, potentially exposing broad segments of the population to unsafe levels of lead. In this paper, we estimate the social cost of leaded gasoline by exploiting the automotive racing exemption and a natural experiment where two national racing organizations switched from leaded to unleaded fuel in 2007. We estimate each link in the causal chain from release of lead in the air, to accumulation of lead in blood, and finally to impacts on mortality. We find robust evidence that leaded gasoline use increases ambient lead concentrations, increases rates of elevated blood lead in children, and increases elderly mortality. The study design allows us to rule out many potential confounders, such as other correlated pollutants or socioeconomic status. We estimate that the social cost of a gram of lead added to gasoline is over $1,100. Our results shed light on the value of historic deleading efforts, demonstrate the large social costs of continued regulatory exemptions, and provide policy-relevant estimates of the social costs of lead emissions at the lowest ambient levels to date.

The Impact of Ambient Air Pollution on Chinese Expressed Happiness through Social Media

Yiren Wang
,
Duke University

Abstract

Faced with severe outdoor air pollution, people’s expressed happiness on social media will be decreased. Daily PM2.5 concentration reports and visible weather quality can serve as stimulation information to motivate individuals to tweet on Sina Weibo, which is the biggest microblog platform in China like Twitter and has more than 200 million daily active users. In this study, I investigated the association between individual expressed happiness and the instant daily ambient air pollution levels (using Air Quality Index, short for AQI). Approximate ten thousand posted Weibo contents data were analyzed from the three biggest Chinese cities (Beijing, Shanghai, and Guangzhou) in 2019. The result shows that mainly when the AQI gets worse from 0 to 150, the overall expressed happiness in Weibo (public sentiment) would decrease by 5.73%. This study suggests the instant outdoor air quality contributes to the residents’ emotions and local governments should pay more attention to the public’s mental health and accelerate the acceleration of solving environmental threats.
Discussant(s)
Glenn Sheriff
,
Arizona State University
Jessamyn Schaller
,
Claremont McKenna College
Karen Clay
,
Carnegie Mellon University
Patrick Baylis
,
University of British Columbia
JEL Classifications
  • Q5 - Environmental Economics
  • H2 - Taxation, Subsidies, and Revenue