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American Economic Review: Vol. 101 No. 5 (August 2011)

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Environmental Accounting for Pollution in the United States Economy

Article Citation

Muller, Nicholas Z., Robert Mendelsohn, and William Nordhaus. 2011. "Environmental Accounting for Pollution in the United States Economy." American Economic Review, 101(5): 1649-75.

DOI: 10.1257/aer.101.5.1649

Abstract

This study presents a framework to include environmental externalities into a system of national accounts. The paper estimates the air pollution damages for each industry in the United States. An integrated-assessment model quantifies the marginal damages of air pollution emissions for the US which are multiplied times the quantity of emissions by industry to compute gross damages. Solid waste combustion, sewage treatment, stone quarrying, marinas, and oil and coal-fired power plants have air pollution damages larger than their value added. The largest industrial contributor to external costs is coal-fired electric generation, whose damages range from 0.8 to 5.6 times value added. (JEL E01, L94, Q53, Q56)

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Authors

Muller, Nicholas Z. (Middlebury College)
Mendelsohn, Robert (Yale U)
Nordhaus, William (Yale U)

JEL Classifications

E01: Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
L94: Electric Utilities
Q53: Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Q56: Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth


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