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The Ancillary Benefits from Climate Policy in the United States

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  • Britt Groosman
  • Nicholas Z. Muller

    ()

  • Erin O’Neill

Abstract

This study investigates the benefits to human health that would occur in the United States (U.S.) due to reductions in local air pollutant emissions stemming from a federal policy to reduce greenhouse gas emissions (GHG). In order to measure the impacts of reduced emissions of local pollutants, this study considers a representative U.S. climate policy. Specifically, the climate policy modeled in this analysis is the Warner-Lieberman bill (S.2191) of 2008 and the paper considers the impacts of reduced emissions in the transport and electric power sectors. This analysis provides strong evidence that climate change policy in the U.S. will generate significant returns to society in excess of the benefits due to climate stabilization. The total health-related co-benefits associated with a representative climate policy over the years 2006 to 2030 range between $90 and $725 billion in present value terms depending on modeling assumptions. The majority of avoided damages are due to reduced emissions of SO2 from coal-fired power plants. Among the most important assumptions is whether remaining coal-fired generation capacity is permitted to “backslide” up to the Clean Air Interstate Rule (CAIR) cap on emissions. This analysis models two scenarios specifically related to this issue. Co-benefits increase from $90 billion, when the CAIR cap is met, to $256 billion if SO2 emissions are not permitted to exceed current emission rates. On a per ton basis, the co-benefit per ton of GHG emissions is projected to average between $2 and $14 ($2006). The per ton marginal abatement cost for the representative climate policy is estimated at $9 ($2006).

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File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0920.pdf
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Bibliographic Info

Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0920.

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Length: 46 pages
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:mdl:mdlpap:0920

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Cited by:
  1. David I. Stern & Frank Jotzo & Leo Dobes, 2013. "The Economics of Global Climate Change: A Historical Literature Review," CCEP Working Papers 1307, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  2. James Boyce & Manuel Pastor, 2012. "Cooling the Planet, Clearing the Air: Climate Policy, Carbon Pricing, and Co-Benefits," Published Studies cooling_the_planet_sept20, Political Economy Research Institute, University of Massachusetts at Amherst.
  3. Stephen P. Holland, 2011. "Spillovers from Climate Policy to Other Pollutants," NBER Chapters, in: The Design and Implementation of U.S. Climate Policy, pages 79-90 National Bureau of Economic Research, Inc.
  4. Stephen P. Holland, 2010. "Spillovers from Climate Policy," NBER Working Papers 16158, National Bureau of Economic Research, Inc.

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