Working Paper: NBER ID: w23417
Authors: Akshaya Jha; Nicholas Z. Muller
Abstract: Burning coal is known to have environmental costs; this paper quantities the local environmental costs of transporting and storing coal at U.S. power plants for the sample period 2002-2012. We first demonstrate that a 10% increase in coal stockpiles (number of deliveries) results in a 0.07% (0.16%) increase in the average concentration of fine particulates (PM2.5) for locations up to 25 miles away from, and downwind from, plants. We next assess the impacts of PM2.5 on average adult and infant mortality rates using coal stockpiles and deliveries as instruments for PM2.5. Our findings within this instrumental variables framework indicate that a 10% increase in PM2.5 leads to a 1.1% (6.6%) increase in average adult (infant) mortality rates; these causal estimates are similar in magnitude to the epidemiological estimates used by the USEPA in their regulatory impact analyses. Our estimated increase in mortality rates implies local environmental costs of $183 ($203) per ton of coal stockpiled (delivered); to put this in perspective, the average power plant paid roughly $48 per ton for coal during our sample period. These sizable but highly localized environmental costs of coal transportation and storage disproportionately impact the economically disadvantaged communities living near coal-fired power plants.
Keywords: Coal; Air Pollution; PM2.5; Mortality; Environmental Costs
JEL Codes: H23; Q40; Q52; Q53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Coal stockpiles/deliveries (L94) | PM2.5 exposure (I14) |
| PM2.5 exposure (I14) | Mortality rates (I12) |
| Coal stockpiles/deliveries (L94) | Mortality rates (I12) |