Do Environmental Markets Cause Environmental Injustice? Evidence from California's Carbon Market / Danae Hernandez-Cortes, Kyle C. Meng.

Format:

Book

Author/Creator:

Hernandez-Cortes, Danae.

Contributor:

National Bureau of Economic Research.

Meng, Kyle C.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27205.

NBER working paper series no. w27205

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

Market-based environmental policies are widely adopted on the basis of allocative efficiency. However, there is growing concern that market-induced spatial reallocation of pollution could widen existing pollution concentration gaps between disadvantaged and other communities. We examine how this \environmental justice" (EJ) gap changed following the 2013 introduction of California's carbon market, the world's second largest and the most subjected to EJ critiques. We estimate that the program lowered GHG, PM2:5, PM10, and NOx emissions by 3-9% annually between 2012-2017 for sample industrial facilities regulated only by the carbon market. Using a pollution dispersal model to characterize resulting spatial changes in pollution concentrations, we find the program caused EJ gaps in PM2:5, PM10, and NOx from these facilities to narrow by 6-10% annually. We demonstrate that explicit modeling of pollution dispersal is critical for detecting these results.

Notes:

Print version record

May 2020.