Measuring the damages of air pollution in the United States

Abstract

This paper measures the damages due to emissions of air pollution in the United States. An integrated assessment model is used to calculate the marginal damage associated with emitting an additional ton of pollution from nearly 10,000 sources in the U.S. The total damage produced by a source is the marginal damage of an emission, its shadow price, times the total tons emitted from a specific source. Adding total damages across all sources yields gross annual damages (GAD) which is a green accounting parallel to gross domestic product (GDP). GAD in 2002 varies between $71 billion and $277 billion (0.7–2.8% of GDP). The range of values depends largely on the value of health and the concentration–response function relating exposures to fine particulate matter (PM 2.5) to adult mortality rates. Source location also matters. Urban emissions constitute 52% of total emissions by weight yet they cause nearly three-quarters of the GAD.