Conference Agenda

This paper studies how carbon policies in Europe lead to inadvertent local environmental regulation adjustments in China. Using a novel dataset covering two decades of Chinese environmental penalties and a comprehensive measure of European sectoral carbon costs, we construct a shift-share measure of yearly city-sector-specific exposure to EU carbon price costs among Chinese firms for identification. We find that a one-standard-deviation increase in export-weighted carbon price exposure corresponds to a 2.30% to 3.97% rise in the amounts of environmental penalties and a 4.39% to 7.52% increase in the values of these penalties. We also observe an increase in the intensity of penalties, suggesting that emissions leakage is not simply absorbed by the importing cities but also triggers stricter environmental regulation in response to increased pollution pressure. Conversely, industries more reliant on imports from the EU see a decline in exports and experience fewer environmental penalties. Further evidence reveals that the increased enforcement is concentrated in tradable sectors rather than reflecting a city-wide policy shift. In addition, local regulators offset reduced environmental enforcement in sectors reliant on EU imports by imposing stricter penalties on non-tradable sectors.

Achieving carbon neutrality in China has the potential to significantly improve air quality and deliver substantial health benefits. However, the extent of these benefits and their distributional impacts vary across different carbon neutrality pathways. Our analysis reveals that, compared to a baseline scenario without carbon neutrality, a pathway dominated by wind and solar energy deployment results in 3.6 times more avoided deaths than a bioenergy-led pathway. Nevertheless, the wind- and solar-led pathway imposes disproportionately higher economic burdens on low-income provinces compared to pathways centered on CCS or bioenergy.

This paper shows that even moderate air pollution levels harm firm performance. We estimate the causal impact of PM2.5 on firms’ sales and worker absenteeism with administrative data from France, exploiting exogenous pollution shocks from wind direction changes. A 10% increase in PM2.5 lowers sales by 0.4% over the next two months, while increasing sick leave by 1%. However, these labor supply reductions explain only part of the sales drop. Our findings suggest air pollution also reduces productivity and demand. The economic benefits of complying with WHO air quality guidelines match the cost of regulation and avoided mortality benefits.

Exposure to fine particulate pollution has a variety of adverse economic impacts. Using a novel dataset of changes in the annual gross domestic product of Indian districts, this paper investigates the impact of changes in the level of ambient PM2.5 on district-level gross domestic product. Using daily temperature inversions as an instrument for pollution exposure, this paper finds that higher levels of particulate pollution reduce gross domestic product. The effect is non-trivial— the median annual increase in the level of PM2.5 reduces year-to-year changes in gross domestic product by 0.56 percentage points.

Particulate matter (PM) is a major, clinically important air pollutant. A large portion of emitted PM crosses borders, damaging health outside of its originating jurisdiction, but due in part to technical obstacles these pollutant flows remain unregulated. Proposed attribution approaches assume that units of PM originating in different jurisdictions cause the same harm, despite a widespread understanding that differing chemical and physical features of PM could generate distinct health effects. We use an atmospheric model to decompose the origins of PM individuals are exposed to at each location in South Korea, the nexus of one of the world's most contentious transboundary air pollution disputes, every day during 2005–2016. We then link these data to universal healthcare records in an econometric analysis that simultaneously measures and accounts for harms from seven types of PM, each from a distinct origin. We discover that the health harm of a unit of transboundary PM is approximately 5× (North Korea) and 2.6× (China) greater than a unit of PM originating within South Korea, and that health responses to PM from natural sources differs from those to anthropogenic sources. Because harms differ by origin, we compute that transboundary sources contribute only 43% of anthropogenic PM exposure in South Korea but generate over 70% of its associated respiratory health costs. Our results suggest that PM should be treated as a mixture of distinct pollutants, each with a unique measurable impact on human health.