In a new study of PM_2.5-related damages, researchers from Carnegie Mellon University and Stanford have found that, US-economy-wide, gross external damage (GED) due to premature mortality has decreased by more than 20% from 2008 to 2014. The paper is published in Proceedings of the National Academy of Sciences (PNAS).

Second, they found that while much of the air pollution policies have focused to date on the electricity sector, damages from farms are now larger than those from utilities. Indeed, farms have become the largest contributor to air pollution damages from PM2.5-related emissions.

Four sectors, comprising less than 20% of the national gross domestic product (GDP), are responsible for ∼75% of GED attributable to economic activities. Fourth, uncertainty in GED estimates tends to be high for sectors with predominantly ground-level emissions because these emissions are usually estimated and not measured. These findings suggest that policymakers should target further emissions reductions from such sectors, particularly in transportation and agriculture.

GED (in $2018) attributable to economic sectors and their respective precursor pollutants (NH₃, NO_x, primary PM_2.5, SO₂, and VOCs). GED was calculated for the 3 most recent NEI years: 2008, 2011, and 2014. Tschofen et al.

This paper has 2 policy-relevant objectives. First, we provide a more comprehensive measure of the contribution of each economic sector to total national output than traditional accounts do and how these contributions evolved over time. Second, the paper guides environmental policymakers’ continued efforts to manage risks posed by exposure to PM_2.5. To do so, we employ integrated assessment models (IAMs), which combine insights from multiple scientific disciplines to tabulate source-specific damages for 5 such pollutants that contribute to ambient levels of PM2.5. Since the harm induced by discharges varies not just according to the toxicity of the pollutant but also according to where emissions occur, modeling damages by source is essential for accurate damage estimates and efficient regulatory decision-making.

We make 3 contributions to the literature. First, we update existing damage estimates with the most recent available comprehensive national emissions data: EPA’s 2014 National Emissions Inventory (NEI). We focus on air pollution damages from premature mortality due to outdoor PM_2.5 exposure since it constitutes the vast majority of air pollution-related health damages. We do not include damages from morbidity or other pollutants such as exposure to nitrogen oxides (NO_x) or ozone. Second, the analysis tracks damages by economic sector over 3 NEI years, 2008, 2011, and 2014. In doing so, we relate monetized pollution damage to conventional measures of the value of production by sector, such as value added (VA). This critical normalization of pollution damage facilitates comparisons of the pollution intensity of output across time within sector and across the economy within a time period.

This framework also enables comparisons of each sector’s contribution to gross domestic product (GDP) relative to its share of gross external damage (GED)… Third, this work delves deeply into various sources of uncertainty in the damage estimates. … The paper also conducts sensitivity analyses over critical model parameters. We qualitatively treat data (or input) uncertainty with a focus on the emissions data provided by the EPA. Our concentration differs from other recent studies by employing a more traditional mapping between air pollution external costs and the real economy, in our treatment of uncertainty, and in the intertemporal accounting comparisons.

—Tschofen et al.

Resources

• Peter Tschofen, Inês L. Azevedo, Nicholas Z. Muller (2019) “Fine particulate matter damages and value added in the US economy” Proceedings of the National Academy of Sciences 116 (40) 19857-19862; doi: 10.1073/pnas.1905030116