Estimating Indirect Benefits: Fracking, Coal and Air Pollution
51 Pages Posted: 6 Sep 2016
This paper estimates indirect benefits of improved air quality induced by hydraulic fracturing, or "fracking". The recent increase in natural gas supply led to displacement of coal-fired electricity by cleaner natural gas-fired generation. Using detailed spatial panel data comprising the near universe of US power plants, we find that coal generation decreased by 28%. Further, fracking decreased local air pollution by an average of 4%. We show that benefits vary geographically; air pollution levels decreased by 35% in the most affected region. Back of the envelope calculations imply accumulated health benefits of roughly $17 billion annually.
Keywords: fracking, coal-fired power plants, air pollution, health, electricity
JEL Classification: Q41, Q53, I18
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