Air Quality
Paper Session
Saturday, Jan. 8, 2022 10:00 AM - 12:00 PM (EST)
- Chair: Lala Ma, University of Kentucky
Lobbying for Free Allowances in the EU ETS
Abstract
Regulated firms exert considerable effort to lobby against regulation. If successful, lobbying can distort the intended welfare effects of regulation. When such attempts to influence regulation fail, regulated firms may choose to evade regulation by relocating to unregulated jurisdictions. In the case of climate change regulation, the relocation of polluting firms can be very detrimental to welfare as it induces carbon leakage. The European Union’s Emissions Trading Scheme (EU ETS) seeks to prevent carbon leakage by distributing emission allowances free of charge to polluting firms. Although the scope of free permit allocation has been reduced from the initial, generous grandfathering rule, many manufacturing industries continue to benefit from free permit allocation. Lobbying from businesses is seen as a main reason for this (Benz et al., 2010; Clo 2010).This paper estimates the welfare costs of lobbying by organized interest groups in the context of permit allocation in the EU ETS. We extend the framework for optimal permit allocation developed by Martin et al. (2014) to include lobbying effort by regulated firms. We gather novel data on lobbying from the EU transparency register and from stakeholder meetings on permit allocation held by the European Commission. These meetings were an important communication channel between firms and the regulator. We obtain lists of participants in these meetings and identify which firms engage in lobbying.
We estimate the objective function of a regulator who trades off the loss of permit revenue vs. keeping jobs, carbon emissions, and political support within the EU. We use the fitted model to perform counterfactual simulations that tell us how much lobbying distorts the allocation of emission allowances. We express the magnitude of this distortion in terms of foregone auction revenue due to excess compensation granted to lobbying firms.
Industrial Lead Emissions and Infant Mortality
Abstract
Industrial activities have been the major source of anthropogenic lead emissions in the United States since the phase-out of leaded gasoline in the early 1990s. This paper focuses on the airborne lead emissions by industrial facilities, investigating the relationships of lead emission, ambient lead pollution, and infant mortality rates from 1988 to 2018. We seek to provide a national-scale study of how industrial lead emissions affect infant health up to recent years when the average of ambient lead concentration has reached relatively low levels. The analysis draws upon panel data on infant mortality of all US counties from the National Vital Statistics linked to data on lead emissions by manufacturing facilities reported to the Toxic Release Inventory (TRI). Emissions by TRI facilities amount for over 50% of the total anthropogenic air lead emissions in year 2000.We apply a research design based on the differential impacts of industrial lead emissions via stacks and via leaks, evaporation, and other fugitive channels on local ambient lead concentration under different weather conditions. We show that fugitive lead emissions have a stronger and more significant effect on increasing infant mortality than stack lead emissions, especially on windy years when the pollution spread to wider population; the effect of stack lead emissions is likely offset by individuals’ avoidance behavior. We estimate that the reduction of fugitive lead emissions by TRI-reporting facilities since the 1990 Clean Air Act Amendment to 2018 saves about 3,144 infant lives, with an estimated value of $86K per pound of emission reduction. We also find a stronger impact of ambient lead pollution on infant mortality when instrumenting for air lead pollution using local wind speed and fugitive lead emissions from facilities.
Environmental Justice and the Multigenerational Persistence of Environmental Exposure
Abstract
Although air quality in the United States has improved substantially over time, the most polluted neighborhoods from almost four decades ago still see relatively worse air quality. We examine whether and to what extent the disproportionate exposure to low environmental quality among socio-economically disadvantaged populations transmits from one generation to the next. This is important for environmental justice since in-utero and early childhood environmental exposure partly explains adulthood socioeconomic status which, in turn, determines residential choices, thus creating a multigenerational low environmental quality trap.We use individual survey data from the Panel Study of Income Dynamics to create a sample of Individual – Grandparent pairs, with information on each generation’s own and family characteristics, geospatial identifiers, and census tract PM2.5 from 1981 – 2015. We link 9,023 individuals to 3,590 maternal grandmothers; 8,358 individuals to 3,356 maternal grandfathers; 7,170 individuals to 3,039 paternal grandmother and 6,746 individuals to 2,866 paternal grandfathers. Our preliminary analysis suggests that, on average, the intergenerational correlation in pollution exposure is positive and statistically significant. Nonetheless, while African American individuals continue to live in areas with significantly higher air pollution, the correlation with their grandparents’ exposure to PM2.5 is weaker than for white individuals. This is consistent with Currie et al. (2020)’s work that highly polluted areas with a larger African American population have experienced a disproportionately greater improvement in air quality over the last few decades.
This is on-going work. Our immediate next step is to consider the rank in air quality exposure as an alternative measure to absolute PM2.5 concentration. In addition, we will also assess whether the disproportionate exposure over generations can be explained by early exposure that leads to poor adult socioeconomic outcomes and therefore results in residential sorting to neighborhoods with poorer environmental quality.
Discussant(s)
Hilary Sigman
,
Rutgers University
Kyle Meng
,
University of California-Santa Barbara
Belinda Archibong
,
Columbia University
Lala Ma
,
University of Kentucky
JEL Classifications
- Q5 - Environmental Economics