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

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 SOX, NOX, and PM10 for samples of 630 to 2,400 facilities for the years 2007 to 2015. We find substantial and statistically significant co-pollutant elasticities of about 1.0 for SOX, 0.9 for NOX, and 0.7 for PM10. These elasticities vary by economic activity, and are substantially higher for the production of energy. For climate policy-induced CO2 emission reductions we find elasticities in the energy sector of 1.2 to 1.8 for SOX, 1.1 to 1.5 for NOX, and 0.8 for PM10. Using these estimates to calculate monetary air quality co-benefits suggests that conventional European Environmental Agency estimates of carbon damages that omit co-benefits significantly underestimate the benefits of carbon mitigation.

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Keywords: Co-pollutants, Air quality co-benefits, Climate mitigation, Industrial air pollution

DOI: 10.5547/01956574.42.5.kzwi

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Published in Volume 42, Number 5 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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