Trans-boundary air pollution spillovers: Physical transport and economic costs by distance

• 成果类型: Article
• 署名作者: Fu, Shihe; Viard, V. Brian; Zhang, Peng
• 署名单位: Xiamen University; Xiamen University; The Chinese University of Hong Kong, Shenzhen
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2021.102808
• 发表日期: 2022
• 关键词: Air pollution; spillovers; Environmental costs and benefits; Mixed two-stage least squares; Regional coordination

摘要

The economic costs of trans-boundary pollution spillovers versus local effects is necessary to evaluate centralized versus decentralized environmental policies. Directly estimating these for air pollution is difficult because spillovers are high-frequency and vary with distance while economic outcomes are usually measured with low-frequency and local pollution is endogenous. We develop an approach to quantify local versus spillover effects as a flexible function of distance utilizing commonly-available pollution and weather data. To correct for the endogeneity of pollution, it uses a mixed two-stage least squares method that accommodates high-frequency (daily) pollution data and low-frequency (annual) outcome data and can improve efficiency. We estimate spillovers of particulate matter smaller than 10 mu g (PM10) on manufacturing labor productivity in China. A one mu g/m(3) annual increase in PM10 locally reduces the average firm's annual output by CNY 45,809 (0.30%) while the same increase in a city 50 km away decreases it by CNY 16,248 (0.11%). This effect declines rapidly to CNY 2847 (0.02%) for an increase in a city 600 km away and then slowly to zero at 1000 km. The results suggest the need for supra-provincial environmental policies or Coasian prices quantified under the approach.