Ancillary benefits of reduced air pollution in the US from moderate greenhouse gas mitigation policies in the electricity sector

Abstract

Actions to slow atmospheric accumulation of greenhouse gases also would reduce conventional air pollutants yielding “ancillary” benefits that tend to accrue locally and in the near-term. Using a detailed electricity model linked to an integrated assessment framework to value changes in human health, we find a tax of $25 per metric ton of carbon emissions would yield NO x -related health benefits of about $8 per metric ton of carbon reduced in the year 2010 (1997 dollars). Additional savings of $4–$7 accrue from reduced investment in NO x and SO 2 abatement in order to comply with emission caps. Total ancillary benefits of a $25 carbon tax are $12–$14, which appear to justify the costs of a $25 tax, although marginal benefits are less than marginal costs. At a tax of $75, greater total benefits are achieved but the value per ton of carbon reductions remains roughly constant at about $12.