Two Birds, One Stone? Local Pollution Regulation and Greenhouse Gas Emissions

Abstract

In most countries, environmental regulation has focused on local pollution, which causes damages near the emission source, while regulation on global pollutants such as greenhouse gases (GHG) has been slow. In principle, local pollutants can either be substitutes or complements to global pollutants implying that local pollution regulation my either increase or decrease GHG emissions. This relationship is an empirical question. We use new comprehensive data on GHG emissions in the United States and exploit variation in local pollution regulation across US counties to estimate this relationship. We find no evidence that more stringent local pollution regulation changes GHG emissions.