Economic Geography and the Efficiency of Environmental Regulation

Alex Hollingsworth (), Taylor Jaworski, Carl Kitchens and Ivan J. Rudik

No 29845, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a quantitative economic geography model with endogenous emissions, amenities, trade, and labor reallocation to evaluate the spatial impact of the leading air quality regulation in the United States: the National Ambient Air Quality Standards (NAAQS). We find that the NAAQS generate $40 billion in annual welfare gains. The gains are spatially concentrated in a small set of cities targeted by the NAAQS, and the improved amenities attract large numbers of nonmanufacturing workers into these areas. We use our model to analyze counterfactual policies and find that using first-best emissions pricing increases welfare by an additional $70 billion per year. Atmospheric transport of emissions, labor reallocation, and trade are first-order factors for quantifying the level and distribution of the costs and benefits of the NAAQS.

JEL-codes: F18 Q52 Q53 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-ene, nep-env, nep-geo, nep-reg and nep-ure
Note: EEE ITI
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Economic Geography and the Efficiency of Environmental Regulation (2022)
Working Paper: Economic geography and the efficiency of environmental regulation (2022)
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