Spatial Dispersion of Costs and Benefits of Power Plants in India

58 Pages Posted: 19 Nov 2018 Last revised: 22 May 2019

See all articles by Geoffrey Barrows

Geoffrey Barrows

University of California, Berkeley - Department of Agricultural and Resource Economics

Teevrat Garg

School of Global Policy and Strategy, UCSD

Akshaya Jha

Carnegie Mellon University

Date Written: May 21, 2019

Abstract

Recent decades have witnessed staggering growth in coal-fired power plant capacity across much of the developing world. While energy supply is important for economic growth, the health costs and economic benefits of power provision may not be distributed equally across space in developing countries due to limited health services and electricity transmission infrastructure. This paper exploits temporal and geographic variation in the expansion of power plant capacity in India to test for spatial dispersion of health costs and economic benefits. We find that increases in coal-fired capacity increase both air pollution and infant mortality rates in districts near these plants relative to other districts in the same state. In contrast, we find no differential benefits from coal-fired power plants near versus far from plant sites as measured by district-level GDP as well as output, wages, and employment in the manufacturing and agricultural sectors. Combined, our results indicate that coal-fired power plants impose environmental costs on the districts where plants are built without providing local benefits in addition to those received by other districts in the same state. This spatial mismatch of local costs and benefits has implications for both power plant siting and the design of environmental policy.

Keywords: Coal, Electricity, India, Air Pollution, Infant Mortality, Economic Benefits, Spatial Externalities, Local versus Federal Regulation, Infrastructure

JEL Classification: I15, Q51, Q56, Q48

Suggested Citation

Barrows, Geoffrey and Garg, Teevrat and Jha, Akshaya, Spatial Dispersion of Costs and Benefits of Power Plants in India (May 21, 2019). Available at SSRN: https://ssrn.com/abstract=3281904 or http://dx.doi.org/10.2139/ssrn.3281904

Geoffrey Barrows

University of California, Berkeley - Department of Agricultural and Resource Economics ( email )

207 Giannini Hall
University of California
Berkeley, CA 94720
United States

HOME PAGE: http://sites.google.com/site/geoffreybarrows/

Teevrat Garg (Contact Author)

School of Global Policy and Strategy, UCSD ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

Akshaya Jha

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

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