Economic geography and the efficiency of environmental regulation

Alex Hollingsworth (), Taylor Jaworski, Carl Kitchens and Ivan Rudik
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Ivan Rudik: Cornell University

No x6fuw, SocArXiv from Center for Open Science

Abstract: We develop a spatial equilibrium model to evaluate the efficiency and distributional impacts of the leading air quality regulation in the United States: the National Ambient Air Quality Standards (NAAQS). We link our economic model to an integrated assessment model for air pollutants which allows us to capture endogenous changes in emissions, amenities, labor, and production. Our results show that the NAAQS generate over $23 billion of annual welfare gains. This is roughly 80 percent of welfare gains of the second-best NAAQS design, but only 25 percent of the first-best emission pricing policy. The NAAQS benefits are concentrated in a small set of cities, impose substantial costs on manufacturing workers, improve amenities in counties in compliance with the NAAQS, and reduce emissions in compliance counties through general equilibrium channels. These findings highlight the importance of accounting for geographic reallocation and equilibrium responses when quantifying the effects of environmental regulation.

Date: 2022-03-11
New Economics Papers: this item is included in nep-ene, nep-env, nep-geo, nep-reg, nep-res and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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https://osf.io/download/6228e938d3db1308207e5945/

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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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:x6fuw

DOI: 10.31219/osf.io/x6fuw

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