Two Birds, One Stone? Local Pollution Regulation and Greenhouse Gas Emissions
52 Pages Posted: 12 May 2016 Last revised: 14 Mar 2017
Date Written: March 1, 2017
In most countries, environmental regulation focuses on local pollution, which causes damages near the emission source, while regulation on global pollutants such as greenhouse gases (GHG) has been slow. Theoretically, local and global pollutants can either be substitutes or complements in production, implying that local pollution regulation may either intensify or reduce global warming concerns. We exploit new data on US GHG emissions and variation in local pollution regulation across US counties to estimate this relationship. We find no evidence that more stringent local pollution regulation changes GHG emissions from manufacturing sectors. Therefore, local pollution regulation will not suffice to address global warming.
Keywords: Environmental regulation, greenhouse gas emissions, climate change, air pollution
JEL Classification: Q52, Q53, Q54, Q58, H23
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