Working Paper: NBER ID: w28389
Authors: Joseph S. Shapiro; Reed Walker
Abstract: Do US air pollution offset markets disproportionately relocate pollution to or from low-income or minority communities? Concerns about an equal distribution of environmental quality across communities—environmental justice—have growing policy influence. We relate prices and quantities of offset transactions to demographics of the communities surrounding polluting plants. We find little association of offset prices or offset-induced movements in pollution with the share of a community that is Black, Hispanic, or with mean household income. This analysis of twelve prominent offset markets suggests that they do not substantially increase or decrease the equity of environmental outcomes.
Keywords: pollution; environmental markets; environmental justice; offset markets
JEL Codes: H22; Q50; Q52; Q53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| pollution offset transactions (Q52) | community demographics (R23) |
| offset prices (P22) | racial demographics (J15) |
| offset transactions (F38) | pollution relocation (Q53) |
| facility-level offset prices (P22) | community characteristics (R23) |