Handle with Care: The Local Air Pollution Costs of Coal Storage

65 Pages Posted: 24 May 2017 Last revised: 27 Jun 2021

See all articles by Akshaya Jha

Akshaya Jha

Carnegie Mellon University

Nicholas Z. Muller

Carnegie Mellon University - David A. Tepper School of Business

Date Written: May 2017

Abstract

Burning coal is known to have environmental costs; this paper quantities the local environmental costs of transporting and storing coal at U.S. power plants for the sample period 2002-2012. We first demonstrate that a 10% increase in coal stockpiles (number of deliveries) results in a 0.07% (0.16%) increase in the average concentration of fine particulates (PM2.5) for locations up to 25 miles away from, and downwind from, plants. We next assess the impacts of PM2.5 on average adult and infant mortality rates using coal stockpiles and deliveries as instruments for PM2.5. Our findings within this instrumental variables framework indicate that a 10% increase in PM2.5 leads to a 1.1% (6.6%) increase in average adult (infant) mortality rates; these causal estimates are similar in magnitude to the epidemiological estimates used by the USEPA in their regulatory impact analyses. Our estimated increase in mortality rates implies local environmental costs of $183 ($203) per ton of coal stockpiled (delivered); to put this in perspective, the average power plant paid roughly $48 per ton for coal during our sample period. These sizable but highly localized environmental costs of coal transportation and storage disproportionately impact the economically disadvantaged communities living near coal-fired power plants.

Suggested Citation

Jha, Akshaya and Muller, Nicholas Z., Handle with Care: The Local Air Pollution Costs of Coal Storage (May 2017). Available at SSRN: https://ssrn.com/abstract=2971794

Akshaya Jha (Contact Author)

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

Nicholas Z. Muller

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

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