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The cost of air pollution abatement

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  • Hartman, Raymond
  • Wheeler, David
  • Singh, Manjula

Abstract

Using data from the U.S. Census Bureau, the authors have developed comprehensive estimates of pollution abatement costs by industry sector for several major air pollutants. Their results provide conservative benchmarks for benefit-cost analysis of pollution control strategies in developing countries. They also provide striking evidence of inefficiency in U.S. command-and-control regulation. The cost estimates reflect the experience of about 100,000 U.S. manufacturing facilities under actual operating conditions. They are based on a complete accounting of costs - including capital, labor energy, materials, and services. So, they should be more useful for benefit-cost analysis than idealized engineering estimates. But they also reflect strict pollution control regulation and input prices which are probably somewhat higher, on average, than those in developing countries. They should be interpreted as conservative estimates for environmental planning in developing countries. Regulatory options that are judged to have high net benefits using these numbers would probably look even better if local abatement cost data were available. The estimates in this paper can provide useful information for pollution charges. They can also help make targeted regulation more cost-effective. With scarce resources for monitoring and enforcement, new regulatory institutions in developing countries will want to focus initially on industry sectors that are the main sources of locally-dangerous pollutants. After those sectors are identified, targeted regulation should be informed by sectoral differences in abatement cost. The estimates suggest, for example, that cost-effective control of suspended particulate emissions will focus on wood pulping rather than steelmaking when both are major sources of suspended particulates. The reason: average particulate abatement costs are four times higher in steelmaking.

Suggested Citation

  • Hartman, Raymond & Wheeler, David & Singh, Manjula, 1994. "The cost of air pollution abatement," Policy Research Working Paper Series 1398, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1398
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    References listed on IDEAS

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    1. Mundle, S. & Shankar,m U. & Mehta, S., 1995. "Incentives and Regulation for Pullution Abatement with an Application to Waste Water Treatment," Papers 63, Asian Development Bank.
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    Cited by:

    1. Lee, Hiro & Roland-Holst, David, 1997. "The environment and welfare implications of trade and tax policy," Journal of Development Economics, Elsevier, vol. 52(1), pages 65-82, February.
    2. Stavins, Robert, 2004. "Environmental Economics," Working Paper Series rwp04-051, Harvard University, John F. Kennedy School of Government.
    3. Muradian, Roldan & O'Connor, Martin & Martinez-Alier, Joan, 2002. "Embodied pollution in trade: estimating the 'environmental load displacement' of industrialised countries," Ecological Economics, Elsevier, vol. 41(1), pages 51-67, April.
    4. Rahman, Shaikh M. & Kirkman, Grant A., 2015. "Costs of certified emission reductions under the Clean Development Mechanism of the Kyoto Protocol," Energy Economics, Elsevier, vol. 47(C), pages 129-141.
    5. Stavins, Robert & Hahn, Robert & Cavanagh, Sheila, 2001. "National Environmental Policy During the Clinton Years," Discussion Papers dp-01-38, Resources For the Future.
    6. Simon Forster, 1998. "A South African national economic and environmental policyframework," Development Southern Africa, Taylor & Francis Journals, vol. 15(2), pages 267-285.
    7. David Maradan & Anatoli Vassiliev, 2005. "Marginal Costs of Carbon Dioxide Abatement: Empirical Evidence from Cross-Country Analysis," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(III), pages 377-410, September.

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