Decompositions and Policy Consequences of an Extraordinary Decline in Air Pollution from Electricity Generation

42 Pages Posted: 11 Dec 2018

See all articles by Stephen P. Holland

Stephen P. Holland

University of California, Berkeley - Energy Institute; University of North Carolina (UNC) at Greensboro - Bryan School of Business & Economics

Erin T. Mansur

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)

Nicholas Z. Muller

Carnegie Mellon University - David A. Tepper School of Business

Andrew Yates

University of North Carolina (UNC) at Chapel Hill - Department of Economics

Date Written: December 2018

Abstract

We determine the change in air pollution damages from U.S. power plant emissions over 2010 to 2017. Annual damages fell from $245 billion to $133 billion over this period, with most of the decline occurring in the East. Decomposition shows that changes in emissions rates reduced damages by $63 billion, changes in generation shares reduced damages by $60 billion, and a reduction in fossil generation reduced damages by $25 billion. However, changes in damage valuations per ton of emissions increased damages by $35 billion. We estimate that marginal damages declined in the East from about 9¢ per kWh in 2010 to 6¢ in 2017. This decrease is slower than the decrease in total damages. Despite little or no change in total damages in the West and Texas, marginal damages increased. The environmental benefit of electric vehicles increased so that they are now cleaner than gasoline vehicles on average, though substantial heterogeneity remains. The environmental benefit of solar panels decreased in the East but increased elsewhere.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Holland, Stephen P. and Mansur, Erin T. and Muller, Nicholas Z. and Yates, Andrew, Decompositions and Policy Consequences of an Extraordinary Decline in Air Pollution from Electricity Generation (December 2018). NBER Working Paper No. w25339. Available at SSRN: https://ssrn.com/abstract=3298810

Stephen P. Holland (Contact Author)

University of California, Berkeley - Energy Institute ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

University of North Carolina (UNC) at Greensboro - Bryan School of Business & Economics ( email )

401 Bryan Building
Greensboro, NC 27402-6179
United States

Erin T. Mansur

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States
603 646 2398 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Nicholas Z. Muller

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

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

Andrew Yates

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
7
Abstract Views
59
PlumX Metrics