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The health costs of dirty energy: Evidence from the capacity market in Colombia

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  • Adhvaryu, Achyuta
  • Molina, Teresa
  • Nyshadham, Anant
  • Tamayo, Jorge
  • Torres, Nicolas

Abstract

The health effects of “dirty” (fossil fuel driven) energy production are difficult to measure accurately due to the endogeneity of fuel choice. We exploit an electricity policy in Colombia that generates a price-based trigger for the use of thermal energy sources. Comparing municipalities near high versus low capacity plants, we first document that the activation of this trigger – which increased thermal energy production – led to significantly higher local pollution levels. This change increased cardiovascular-related ER mortality by 56% and respiratory-related morbidity by 9%. Our results translate to a cost of 996 million USD in terms of lives lost and higher healthcare costs.

Suggested Citation

  • Adhvaryu, Achyuta & Molina, Teresa & Nyshadham, Anant & Tamayo, Jorge & Torres, Nicolas, 2023. "The health costs of dirty energy: Evidence from the capacity market in Colombia," Journal of Development Economics, Elsevier, vol. 164(C).
    • Handle: RePEc:eee:deveco:v:164:y:2023:i:c:s0304387823000718
    DOI: 10.1016/j.jdeveco.2023.103116
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    More about this item

    Keywords

    Electricity generation; Pollution; Health; Colombia;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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