AEI Press Publishes ‘Using Marginal Damages in Environmental Policy’
FOR IMMEDIATE RELEASE
"Despite the considerable progress that has been achieved controlling air pollution in the United States, remaining emission still cause appreciable damage."
In Using Marginal Damages in Environmental Policy (AEI Press) economists Robert Mendelsohn of Yale University and Nicholas Muller of Middlebury College demonstrate how the United States can make its air pollution regulations more efficient by focusing resources on the reduction of the most harmful emissions.
- Today’s regulatory system—a mix of command-and-control and cap-and-trade programs—does not efficiently target the most damaging sources of air pollution. Even with existing abatement efforts, the annual economic damage of US emissions is $100 – $800 billion.
- Current regulatory policies are not concerned enough with lessening urban emissions, which are closer to human populations and consequently more damaging, 97 percent of this economic damage is from loss of human health and longevity.
- Regulations are not effectively applied across all industries. Some industries are under-regulated and the air pollution they cause is greater than their contribution to the economy.
- Focus on the damages, not tons: The authors calculate the damages caused by air pollution and assign a monetary value to the health and other outcomes caused by these emissions. This set of marginal damages could guide future air pollution policy.
- Prioritize reform: to yield the greatest return on investment, reforms should focus on sources and pollutants with the greatest differences between marginal damages and cost. Abatement should be more focused on urban, ground-level emissions because they are responsible for higher damages per ton of emissions.
Robert Mendelsohn, is the Edwin Weyerhaeuser Davis Professor at Yale University. As a resource economist, he specializes in valuing the environment.
Nicholas Z. Muller is assistant professor in the Economics Department and in the Environmental Studies program at Middlebury College.
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