Effects of Carbon Mitigation on Co-pollutants at Industrial Facilities in Europe

Published paper wins Energy Journal Best Paper Award for 2021

>> Read published version in Energy Journal

Abstract

In addition to global climate benefits, carbon mitigation improves local air quality by reducing emissions of hazardous co-pollutants. Using data on large industrial point sources in Europe, we estimate how changes in carbon dioxide emissions affect emissions of the three co-pollutants SO_X, NO_X, and PM₁₀ for samples of 727 to 2,653 facilities for the years 2007 to 2015. We find substantial and significant co-pollutant elasticities of 0.7 for SO_X and NO_X, and 0.5 for PM₁₀, which are robust to different estimation approaches. Large CO₂ emitters and the energy sector are characterized by higher-than-average co-pollutant elasticities. For climate policy induced CO₂ emission reductions, we find co-pollutant elasticities in the energy sector of 1.2 for SO_X, 1.0 for NO_X, and 0.8 for PM₁₀. Using these estimates to calculate monetary air quality cobenefits suggests that conventional European Environmental Agency estimates of carbon damages that omit co-benefits significantly underestimate the benefits of carbon mitigation.