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How Did Air Quality Standards Affect Employment at US Power Plants? The Importance of Timing, Geography, and Stringency

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  • Glenn Sheriff
  • Ann E. Ferris
  • Ronald J. Shadbegian

Abstract

We examine fossil-fuel power plant employment impacts of new nitrogen oxides (NOx) provisions under Title I of the 1990 Clean Air Act Amendments (CAAAs). These provisions required installation of reasonably available control technology (RACT) for NOx emissions for major stationary sources in the Ozone Transport Region and in more stringently classified ozone nonattainment areas. Standard approaches using nonattainment designation to identify regulatory impacts abstract from important implementation aspects such as when regulatory changes occur, where regulations are in effect, and which specific regulations apply. Omitting these factors can introduce bias by contaminating the control group, leading to underestimation of historical employment impacts and overestimation of projected impacts from tightening regulations. Our results indicate that the new NOx RACT requirements negatively impacted power plant employment. We find no significant impacts on generation, suggesting that installation of pollution controls may have contributed to labor-saving technical change at affected units.

Suggested Citation

  • Glenn Sheriff & Ann E. Ferris & Ronald J. Shadbegian, 2019. "How Did Air Quality Standards Affect Employment at US Power Plants? The Importance of Timing, Geography, and Stringency," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(1), pages 111-149.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/700929
    DOI: 10.1086/700929
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    Cited by:

    1. Ling-Yun He & Xiao-Feng Qi, 2021. "Environmental Courts, Environment and Employment: Evidence from China," Sustainability, MDPI, vol. 13(11), pages 1-16, June.
    2. Wang, Ailun & Hu, Shuo & Lin, Boqiang, 2021. "Can environmental regulation solve pollution problems? Theoretical model and empirical research based on the skill premium," Energy Economics, Elsevier, vol. 94(C).
    3. Jiang, Pengcheng & Jiang, Hongli, 2023. "Green finance policy and labor demand," Economics Letters, Elsevier, vol. 225(C).
    4. Mao, Jie & Wang, Chunhua & Yin, Haitao, 2023. "Corporate responses to air quality regulation: Evidence from a regional environmental policy in China," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    5. Akama, Erick Maiko & Lokina, Razack & Mkenda, Beatrice Kalinda, 2023. "Clean production and Employment Outcomes: An Eco-efficiency Firm Level Analysis in Kenya," African Journal of Economic Review, African Journal of Economic Review, vol. 11(2), March.
    6. Charlotte Bez & Maria Enrica Virgillito, 2022. "Toxic pollution and labour markets: uncovering Europe's left-behind places," LEM Papers Series 2022/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    7. Karen Clay & Akshaya Jha & Joshua A. Lewis & Edson R. Severnini, 2021. "Impacts of the Clean Air Act on the Power Sector from 1938-1994: Anticipation and Adaptation," NBER Working Papers 28962, National Bureau of Economic Research, Inc.
    8. Meng-jieu Chen, 2021. "The abatement of particulate matter 2.5 in Los Angeles County: a counterfactual evaluation," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(5), pages 7063-7088, May.
    9. Ann Wolverton & Ron Shadbegian & Wayne Gray, 2022. "The U.S. Manufacturing Sector’s Response to Higher Electricity Prices: Evidence from State-Level Renewable Portfolio Standards," Working Papers 22-47, Center for Economic Studies, U.S. Census Bureau.
    10. Shijie Wang & Laijun Zhao & Yong Yang & Chenchen Wang & Jian Xue & Xin Bo & Deqiang Li & Dengguo Liu, 2019. "A Joint Control Model Based on Emission Rights Futures Trading for Regional Air Pollution That Accounts for the Impacts on Employment," Sustainability, MDPI, vol. 11(21), pages 1-17, October.
    11. Chao Wu & Yu Hua, 2023. "Does Environmental Regulation Have an Employment Dividend? Evidence from China," Sustainability, MDPI, vol. 15(7), pages 1-20, April.
    12. Walter, Jason & Raff, Zach, 2019. "When the regulator goes home: The effectiveness of environmental oversight," MPRA Paper 94158, University Library of Munich, Germany.
    13. Hille, Erik & Möbius, Patrick, 2019. "Do energy prices affect employment? Decomposed international evidence," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 1-21.
    14. Curtis, E. Mark, 2020. "Reevaluating the ozone nonattainment standards: Evidence from the 2004 expansion," Journal of Environmental Economics and Management, Elsevier, vol. 99(C).
    15. Ferris, Ann E. & Frank, Eyal G., 2021. "Labor market impacts of land protection: The Northern Spotted Owl," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    16. Curtis, E. Mark & Lee, Jonathan M., 2019. "When do environmental regulations backfire? Onsite industrial electricity generation, energy efficiency and policy instruments," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 174-194.

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