Pollution Externalities Research Articles

People's attitude towards willingness-to-pay for environmental protection in Pakistan.

Recent environmental research has found that people with higher incomes and in more developed countries are more willing to pay (WTP) to protect their environment than people in developing countries. Based on this assumption, the study investigated Pakistani citizens' attitudes toward environmental protection, precisely their willingness to pay higher prices and taxes to preserve the natural environment. The research was carried out in three Punjab cities (Hasan Abdal, Wah, and Taxila) and four KPK cities (Abbottabad, Havelian, Mansehra, and Haripur). The selected cities are home to knowledgeable people who work in various universities, schools, hospitals, medical colleges, and nearby industrial estates and have a sense of environmental protection and can understand the healthcare issues related to environmental damages. The survey was divided into two sections: one about the participants' socio-demographic information and the other about people's willingness to pay higher prices and taxes to protect the environment. Four hundred and sixty-two people took part in the survey, and the data were analyzed using the bootstrap regression approach. The results show that gender has a detrimental impact, although population density and education positively impact a country's willingness to pay for environmental protection (WTPEP). Women are more likely to engage in pro-environmental behavior than men, resulting in disparities in their perceptions of male and female respondents in the study. People who live in crowded places tend to pay for environmental protection because of population density, healthcare difficulties, and air pollution. The respondents are well-versed in the externalities of environmental pollution; they are hopeful about paying for a better healthcare environment. Other criteria, such as the respondent's income, health status, total pollution level in the country, and per capita income, enable respondents to pay for environmental preservation to achieve long-term sustainable growth. The government must embrace air quality regulations and empower its citizens by offering better healthcare services since they are enthusiastic about paying higher taxes and fees to protect the environment.

Analysis of the spatio-temporal network of air pollution in the Yangtze River Delta urban agglomeration, China.

The complex correlation between regions caused by the externality of air pollution increases the difficulty of its governance. Therefore, analysis of the spatio-temporal network of air pollution (STN-AP) holds great significance for the cross-regional coordinated governance of air pollution. Although the spatio-temporal distribution of air pollution has been analyzed, the structural characteristics of the STN-AP still need to be clarified. The STN-AP in the Yangtze River Delta urban agglomeration (YRDUA) is constructed based on the improved gravity model and is visualized by UCINET with data from 2012 to 2019. Then, its overall-individual-clustering characteristics are analyzed through social network analysis (SNA) method. The results show that the STN-AP in the YRDUA was overall stable, and the correlation level gradually improved. The centrality of every individual city is different in the STN-AP, which reveals the different state of their interactive mechanism. The STN-AP could be subdivided into the receptive block, overflow block, bidirectional block and intermediary block. Shanghai, Suzhou, Hangzhou and Wuxi could be key cities with an all above degree centrality, betweenness centrality and closeness centrality and located in the overflow block of the STN-AP. This showed that these cities had a greater impact on the STN-AP and caused a more pronounced air pollution spillovers. The influencing factors of the spatial correlation of air pollution are further determined through the quadratic assignment procedure (QAP) method. Among all factors, geographical proximity has the strongest impact and deserves to be paid attention in order to prevent the cross-regional overflow of air pollution. Furthermore, several suggestions are proposed to promote coordinated governance of air pollution in the YRDUA.

Pollution and Labor Market Search Externalities Over the Business Cycle

We study the relationship between unemployment, environmental policy, and business cycles. We develop a dynamic stochastic general equilibrium real business cycle model that includes both a pollution externality and congestion externalities from labor market search frictions, which generate unemployment. We consider two policies to address the market failures: an emissions tax and a tax or subsidy on job creation. With both policies present, the efficient outcome can be achieved. When one policy is constrained or absent, we solve for the second best. The absence of a vacancy policy to address the congestion externalities substantially affects the value of the emissions tax, both in steady state and over the business cycle. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Integrated analysis of photovoltaic system externalities in Brazil: public health expenditures, energy quality, architectural aspects and real estate value

Photovoltaic solar energy systems is a renewable source that has raised great worldwide interest in recent decades. However, in Brazil still, the cost of photovoltaic (PV) systems is still high, and the current public policies are incipient. From 2014 to 2019, an average growth of 203% per year was observed in the installed PV power systems in Brazil. Such performance can also be justified by a greater understanding of externalities, i.e., external positive and negative impacts inherent to the generation of electric energy. The objective is to understand the economic effects of photovoltaic externalities from different perspectives. The following externalities were studied: air pollution; energy quality; construction element; thermal load and real estate valuation, and all of them were analyzed for the Brazilian scenario. The results indicated that the externality of air pollution, which has impacts on health, estimated from the society perspective, could be worth, at least, 4.12% of the price of the energy generated by PV systems. The losses avoided and the voltage profile, energy quality parameters, may account to 12.61% of the electricity price for utilities, and from the consumer perspective, the externality real estate value may be around 79.44% of the price of the electricity generated by photovoltaic systems. The results of this study indicate that the externalities were, for the most part, positive for PV electric energy generating systems. Thus, considering externalities, it is intended to further understand their relationship with the expansion of the distributed generation of electric energy with PV systems in Brazil.

Impacts of carbon trading mechanism on closed-loop supply chain: A case study of stringer pallet remanufacturing

Remanufacture unlocks the residual values in used products by prolonging the life cycles, whereas the inherent uncertainty in reverse logistics presents a significant challenge for operations management and brings resources into waste. To reduce the negative externality caused by uncertainty in reverse logistics, this study makes stochastic analysis of the market uncertainty and formulates an ordering strategy for environmental sustainability to minimize the carbon emissions. Further, considering the externality of environmental pollution can be internalized into the operating cost by carbon trading mechanism, we then investigate the economic behavior under the fluctuation of carbon price. Through polynomial regression, the model forecasts the carbon price in Beijing carbon trading center and quantifies the impacts of price variation on the decision process, then from which devises a balanced and sustainable EOQ strategy to optimize the economic efficiency at lower resource input. Through empirical examples that carried out with different forecasting methods, the results testify the validity and robustness of the model.

An Analytical Approach for Initial Allocation of Discharge Permits with Consideration of the Water Environmental Capacity and Industrial Technical Feasibility

The tradable discharge permit is an efficient marketing twist to deal with negative externality of water pollution, and initial allocation discharge permits (IADP) is a tough prerequisite for a health tradable discharge permit system. However, the allocation rules focusing on both water environment quality attainment and economic-technical feasibility have not been achieved. Therefore, a three-tier analytical framework including control units, industries, and enterprises has been established for satisfying the requirements of water environment quality attainment and technical feasibility. The framework includes three calculation modules and one justification module. A case study of the framework is carried out in the Changzhou City of Taihu Lake, China. Through comparison of the results of industry IADP, the technology-based initial allocation discharge permits scheme in control unit 7 is adopted as the final initial allocation discharge permits scheme, and the reduction plan chemical industry is carried out in control unit 8; finally, the initial allocation discharge permits results after reduction are employed as the final initial allocation discharge permits scheme. This three-tier analytical framework could ensure environmental protection, equality, efficiency, and make the scheme be more acceptable for enterprise stakeholders. In addition, it could support for optimization of industrial layouts and industrial structure upgrading to some degree.

Making introductory economics more relevant: Using personalized connections to introduce environmental economics

Instructors have used real-world problems in introductory economics classrooms for over three decades, but today’s students continue to perceive that economics is not relevant for their lives. I provide three teaching modules associated with pollution externalities designed to improve student perceptions of relevance and make the study of environmental problems “more useful for more people.” I provide a new context-rich problem that helps students make a personal connection with local environmental quality indicators. Two additional modules are included. The second module engages students with the interdisciplinary field of environmental justice. The third module explains how a Nobel Prize winner Ronald Coase’s influential and controversial insight about reciprocal harm can help encourage critical thinking about negative externalities in a world with transaction costs. In such a world, the module focuses on the legal system's role and Coase’s overlooked view that factors other than efficiency should be considered. Finally, I include supplementary materials and tips for instructors wishing to use one or more modules in their classrooms.

Estimates of population exposure to atmospheric pollution and health-related externalities in a real city: The impact of spatial resolution on the accuracy of results

Health impacts of atmospheric pollution is an important issue in urban environments. Its magnitude depends on population exposure which have been frequently estimated by considering different approaches relating pollutant concentration and population exposed to it. However, the uncertainties due to the spatial resolution of the model used to estimate the pollutant concentration or due to the lack of representativeness of urban air quality monitoring station (AQMS) have not been evaluated in detail. In this context, NO2 annual average concentration at pedestrian level in the whole city of Pamplona (Spain) modelled at high spatial resolution (~1 m) by Computational Fluid Dynamic (CFD) simulations is used to estimate the total population exposure and health-related externalities by using different approaches. Air pollutant concentration and population are aggregated at different spatial resolutions ranging from a horizontal grid cell size of 100 m × 100 m to a coarser resolution where the whole city is covered by only one cell (6 km × 5 km). In addition, concentrations at AQMS locations are also extracted to assess the representativeness of those AQMS. The case with a spatial resolution of 100 m × 100 m for both pollutant-concentration distribution and population data is used as a reference (Base case) and compared with those obtained with the other approaches. This study indicates that the spatial resolution of concentration and population distribution in the city should be 1 km × 1 km or finer to obtain appropriate estimates of total population exposure (underestimations <13%) and health-related externalities (underestimations <37%). For the cases with coarser resolutions, a strong underestimation of total population exposure (>31%) and health-related externalities (>76%) was found. On the other hand, the use of AQMS concentrations can induce important errors due to the limited spatial representativeness, in particular in terms of population exposure.

Impact of sulfur dioxide emissions trading pilot scheme on pollution emissions intensity: A study based on the synthetic control method

Emissions trading is presumed to be one of the several effective means to solve the externality of environmental pollution in enterprises. However, previous studies hold varying opinions on the effectiveness of China's sulfur dioxide emissions trading pilot scheme (SETPS). Based on the panel data from 30 provinces in China from 2000 to 2015, the present study uses the synthetic control method to evaluate the impact of the SETPS on the intensity of industrial sulfur dioxide (SO2) emissions in the pilot areas. This can avoid problems in the terms of selection bias and policy endogeneity. We find that the effect of the SETPS has regional heterogeneity; Tianjin's emissions trading scheme has achieved the desired reduction effect, whereas the implementation of the SETPS in other areas did not reduce the intensity of industrial SO2 emissions. The robustness test results support the aforementioned conclusions. This study proposes that policy support is necessary for reducing the regional SO2 emissions and that these policies should be constantly adjusted during their implementation. Tianjin's sulfur dioxide pilot needs to be studied in detail and promoted in other regions.

Managing spatial linkages and geographic heterogeneity in dynamic models with transboundary pollution

We construct a spatiotemporal frame for the study of spatial economic and ecological patterns generated by transboundary pollution. Space is continuous and polluting emissions originate in the intensity of use of the production input. Pollution flows across locations following a diffusion process. The objective functional of the economy is to set the optimal production policy over time and space to maximize welfare from consumption, taking into account a negative local pollution externality and the diffusive nature of pollution. Our framework allows for space and time dependent preferences and productivity, and does not restrict diffusion speed to be space-independent. Accordingly, we develop a methodology to investigate the environmental and economic implications of spatiotemporal heterogeneity. We propose a method for an analytical characterization of the optimal paths. An application to technological spillovers is proposed for illustration. We focus on the determination of the optimal short-term spatiotemporal dynamics induced by the resulting non-autonomous problems.

Public transport and urban structure

Public transport is central to commuting in most cities. This paper studies the role of public transportation in shaping the urban structure. Its main contribution is to propose a tractable model as a tool to study urban regulations and transport policies in the long-run. Using the classic monocentric city framework, we model public transport as a mode that can only be accessed by walking to a set of stops. By incorporating a discrete transport mode choice and income heterogeneity, the model remains simple yet can reproduce non-monotonous urban gradients observed in cities with public transport, and well-observed spatial patterns of sorting by income and use of public transport. For example, it can reproduce an inverted U-shape of transit usage along the city. To highlight the relevance of the model, we study the effects of pricing pollution externalities together with extending the public transportation network on the urban structure.

Air Pollution, Greenhouse Gas, and Traffic Externality Benefits and Costs of Shifting Private Vehicle Travel to Ridesourcing Services

On-demand ridesourcing services from transportation network companies (TNCs), such as Uber and Lyft, have reshaped urban travel and changed externality costs from vehicle emissions, congestion, crashes, and noise. To quantify these changes, we simulate replacing private vehicle travel with TNCs in six U.S. cities. On average, we find a 50-60% decline in air pollutant emission externalities from NOx, PM2.5, and VOCs due to avoided "cold starts" and relatively newer, lower-emitting TNC vehicles. However, increased vehicle travel from deadheading creates a ∼20% increase in fuel consumption and associated greenhouse gas emissions and a ∼60% increase in external costs from congestion, crashes, and noise. Overall, shifting private travel to TNCs increases external costs by 30-35% (adding 32-37 ¢ of external costs per trip, on average). This change in externalities increases threefold when TNCs displace transit or active transport, drops by 16-17% when TNC vehicles are zero-emission electric, and potentially results in reduced externalities when TNC rides are pooled.

Transboundary pollution control in asymmetric countries: do assistant investments help?

Transboundary pollution control usually requires the cooperation of neighboring countries due to the externality of pollution. However, countries at different levels of development, which are called asymmetric countries in this paper, may have different attitudes toward this cooperation. The developing countries would like to take a free ride and they can benefit from the cooperation with developed countries, but the developed countries may not be willing to afford this cooperation cost. This paper discusses the cooperation between two asymmetric countries that developed country may provide assistant investments to help the developing country reduce pollution stock. We consider a dynamic differential game to model the transboundary pollution control between two asymmetric regions and derive the optimal equilibrium of both regions using the Hamilton-Jacobi-Bellman (HJB) equation. To explore the impact of assistant investments, numerical illustrations and sensitivity analysis are implemented to compare the equilibrium strategies under two scenarios: that with or without assistant investments. We conclude that the common pollution stock will be reduced when the developed country is willing to provide assistant investments to the developing country. Besides, the equilibrium emission strategies of both countries increase with assistant investments, which means more economic benefits for both sides.

Measuring costs of noise pollution generated by freight transport: Case of the Slovak and Czech Republic

The paper focuses on measuring and quantification of the negative externality of noise pollution generated by freight transport in the Slovak Republic and the Czech Republic. The paper describes negative impacts and significance of noise externalities, whereas it is established that noise causes psychological and physiological harm to affected persons. A separate part of the paper is dedicated to the current status of the European legislation dealing with the issues of the negative externality of noise pollution, in particular Directive 2002/49/EC of the European Parliament and of the Council and Communication COM(2008) 435. The actual measurement of the total, average and marginal costs of noise pollution is implemented in line with the defined methodology and using expert studies defined in the paper. The measurement results show that the costs of the negative externality of noise pollution are high in both countries. According to authors’ calculations, the total costs of the negative externality of noise pollution amount to EUR 100.8 mil in the Czech Republic and EUR 16.9 mil in the Slovak Republic. The paper contains a proposal of internalisation of these costs in the form of performance charges applied to operation of heavy goods vehicles.

Border pollution reduction in China: The role of livestock environmental regulations

This paper studies the effect of environmental regulations on border pollution reduction in developing countries' rural areas by taking livestock environmental regulations (LERs) in China as a quasi-natural experiment. Applying the generalized difference-in-difference-in-differences (DDD) method, we find that LERs are effective in reducing border pollution: the chemical oxygen demand (COD) and ammonia nitrogen (NH3−N) of the border counties are 21.78% and 39.51%, less than that of the interior counties. We document that the effectiveness of LERs in reducing border pollution can be attributed to the fact that LERs require local governments to make collective decisions in fighting livestock pollution. Further heterogeneity analysis finds that the reduction effect of LERs on border pollution is greater in the downstream border and underdeveloped areas. Our paper implies that the externality of border pollution can be internalized through collective decision-making between local governments.

Are consumers attentive to local energy costs? Evidence from the appliance market

We estimate whether consumers respond to local energy costs when purchasing appliances. Using a dataset from an appliance retailer, we compare demand responsiveness to a measure of energy costs that varies with local energy prices versus purchase prices. We cannot reject that consumers respond to lifetime energy costs in the same way they respond to purchase prices under a wide range of assumptions. These findings run counter to the popular wisdom, which motivates energy standards, that energy costs are systematically undervalued due to various behavioral phenomena. They imply that electricity pricing that deviates from social marginal costs, due to failure to incorporate pollution externalities or due to other features in rate design, can have substantial distortionary effects on demand.

Pollution externalities and corrective taxes in a dynamic small open economy

Pollution externalities and corrective taxes in a dynamic small open economy

Impact of air pollution on labor productivity: Evidence from prison factory data

This study examined the causal relationship between air pollution and labor productivity, by adopting prison factory data for a perfect measure of labor productivity. To address the endogeneity of air pollution, an instrumental variable strategy was used. The results showed that a 10-unit increase in air pollution index led to a significant decrease in labor productivity by 4%. A nonlinear relationship between air pollution and labor productivity was also suggested, which implied that the extreme air pollution reduced labor productivity heavily. This study emphasized the negative externality of air pollution on labor productivity.

Trends of Environmentally Sustainable Solutions of Urban Last-Mile Deliveries on the E-Commerce Market—A Literature Review

The growth of e-commerce has increased urban freight transport, bringing negative externalities of emissions, pollution, noise, congestion, and habitat loss. There is a visible effort to make the urban last-mile (LM) deliveries more sustainable, mainly in the environmental aspects; however, the related literature lacks a synthesis of the up-to-date research trends and available solutions. This paper reviews relevant literature following SRL methodology in terms of topics related to green LM deliveries on the e-commerce market in urban areas, and identifies trends and the research gaps in this field. In addition, current research topics and existing solutions within the e-commerce market, which increase its environmental sustainability are presented. The findings provide an accurate and comprehensive synthesis of research in green LM e-commerce deliveries in cities, identify current and emerging interests of researchers worldwide, and discover areas requiring further studies. The topics of ICT and smart solutions, customer behavior, and performance assessment certainly seem to be underestimated in the current research. In practical terms, it is a source of knowledge and guidelines on the current developments regarding the existing solution for the LM e-commerce deliveries in the urban area, which might help local governments, freight operators, and other stakeholders of last-mile logistics to improve their sustainability.

A dynamic analysis of the income–pollution relationship in a two-country setting

This research explores the presence of the income–pollution relationship in a dynamic two-country setting. We argue that the initial conditions of an economy, as described by its initial stock of physical capital, its total factor productivity, and the degree of environmental awareness, are critical determinants of the income–pollution paths. More importantly, these initial conditions have a more pronounced effect in a world where economies interact with one another and transboundary and global pollutants are affecting more than one country. We show that, in the presence of pollution externalities between two countries, the income–pollution paths these countries follow depend on the stage of development of each country, on their relative and absolute productivities, on the degree of environmental awareness and on the transboundary nature of the pollutants. In a two-country setting with pollution externalities, even more complex patterns may arise compared to single country models, thereby confirming the nonlinear effect of growth on environmental outcomes. It is shown that even small asymmetries span income–pollution relationships that are significantly different than the prescribed inverted U-shaped patterns.