Decompositions and Policy Consequences of an Extraordinary
Decline in Air Pollution from Electricity Generation

Stephen P. Holland, Erin T. Mansur, Nicholas Z. Muller, and Andrew J. Yates

American Economic Journal: Economic Policy, Volume 12, Issue 4, November 2020, Pages 244-274.
Working paper, October 2019.
NBER Working Paper 25339, December 2018.
NBER Digest Summary, February 2019.



Using integrated assessment models, we calculate the economic value of the extraordinary decline in emissions from U.S. power plants. Annual local and global air pollution damages fell from $245 to $133 billion over 2010-2017. Decomposition shows changes in emissions rates and generation shares among coal and gas plants account for more of this decline than changes in renewable generation, electricity consumption, and damage valuations. Econometrically estimated marginal damages declined in the East from 8.6 to 6 per kWh. Marginal damages increased slightly in the West and Texas. These estimates indicate electric vehicles are now cleaner on average than gasoline vehicles.

Or in the words of the poet Yates

Pollution from power plants went down

How much for me depends on the town

Less coal but more gas

Some scrubbers at last

Electric cars now worth their renown