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The Ancillary Benefits from Climate Policy in the United States

Author

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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).

Suggested Citation

  • Britt Groosman & Nicholas Z. Muller & Erin O’Neill, 2009. "The Ancillary Benefits from Climate Policy in the United States," Middlebury College Working Paper Series 0920, Middlebury College, Department of Economics.
  • Handle: RePEc:mdl:mdlpap:0920
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    1. repec:eee:pubeco:v:150:y:2017:i:c:p:53-74 is not listed on IDEAS
    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. Milan Ščasný & Emanuele Massetti & Jan Melichar & Samuel Carrara, 2015. "Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(2), pages 383-415, October.
    4. Ma, Zhixiao & Xue, Bing & Geng, Yong & Ren, Wanxia & Fujita, Tsuyoshi & Zhang, Zilong & Puppim de Oliveira, Jose A. & Jacques, David A. & Xi, Fengming, 2013. "Co-benefits analysis on climate change and environmental effects of wind-power: A case study from Xinjiang, China," Renewable Energy, Elsevier, vol. 57(C), pages 35-42.
    5. Dobes Leo & Jotzo Frank & Stern David I., 2014. "The Economics of Global Climate Change: A Historical Literature Review," Review of Economics, De Gruyter, vol. 65(3), pages 281-320, December.
    6. John Balbus & Jeffery Greenblatt & Ramya Chari & Dev Millstein & Kristie Ebi, 2014. "A wedge-based approach to estimating health co-benefits of climate change mitigation activities in the United States," Climatic Change, Springer, vol. 127(2), pages 199-210, November.
    7. 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.
    8. Stephen P. Holland, 2010. "Spillovers from Climate Policy," NBER Working Papers 16158, National Bureau of Economic Research, Inc.
    9. repec:eee:jeeman:v:87:y:2018:i:c:p:52-71 is not listed on IDEAS
    10. Antoniou, Fabio & Kyriakopoulou, Efthymia, 2015. "On The Strategic Effect of International Permits Trading on Local Pollution: The Case of Multiple Pollutants," Working Papers in Economics 610, University of Gothenburg, Department of Economics.
    11. Cohen, Alex & Keiser, David, 2016. "The Effectiveness of Overlapping Pollution Regulation: Evidence from the Ban on Phosphate in Dishwasher Detergent," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235533, Agricultural and Applied Economics Association.
    12. Kiula, Olga & Markandya, Anil & Ščasný, Milan & Menkyna Tsuchimoto, Fusako, 2014. "The Economic and Environmental Effects of Taxing Air Pollutants and CO2: Lessons from a Study of the Czech Republic," MPRA Paper 66599, University Library of Munich, Germany, revised Oct 2015.

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