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

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 SOX, NOX, 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 SOX and NOX, 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 SOX, 1.0 for NOX, 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.

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