Background:The ashes and dust resulting from the 2011 eruptions of the Puyehue volcano in Chile more than doubled monthly averages of PM10 concentrations in Montevideo, Uruguay. Few studies have taken advantage of natural experiments to assess the relationship between ambient air pollutant concentrations and birth outcomes.Objectives:In this study we explored the effect of particulate matter with diameter of ≤ 10 μm (PM10) on perinatal outcomes in Uruguay, a middle-income country in South America with levels of PM10 that in general do not exceed the recommended thresholds. The analyzed outcomes are preterm birth, term birth weight, and term low birth weight.Methods:We took advantage of the sharp variation in PM10 concentrations due to the Puyehue eruptions to estimate the associations between mother’s exposure to PM10 in each trimester of pregnancy and perinatal outcomes. We use birth registries for 2010–2013 and control for covariates, including maternal and pregnancy characteristics, weather, co-pollutants, and calendar quarter and hospital indicators.Results:A 10-μg/m3 increase in exposure to PM10 during the third trimester was associated with a higher likelihood of a preterm birth [odds ratio (OR) = 1.10; 95% CI: 1.03, 1.19]. The association was robust to different model specifications, and increased with categorical exposure levels (OR for third-trimester PM10 ≥ 70 vs. < 30 μg/m3 = 5.24; 95% CI: 3.40, 8.08). Exposures were not consistently associated with birth weight or low birth weight among term births, though second-trimester exposures were associated with higher birth weight, contrary to expectations.Conclusions:Taking advantage of a natural experiment, we found evidence that exposure to high levels of PM10 during the third trimester of pregnancy may have increased preterm births among women in Montevideo, Uruguay.Citation:Balsa AI, Caffera M, Bloomfield J. 2016. Exposures to particulate matter from the eruptions of the Puyehue Volcano and birth outcomes in Montevideo, Uruguay. Environ Health Perspect 124:1816–1822; http://dx.doi.org/10.1289/EHP235

I review the few programs implemented in Latin America to control pollution with direct economic instruments, and draw general lessons for the future implementation of these instruments in the region. The available evidence suggests that a combination of low capacities and political economy issues negatively affected the implementation of these programs. As a result, the capacity of the economic instruments to induce emission reductions cost-effectively and their future political viability in these countries in the short or medium run may have been compromised. This present state of affairs provides more evidence in favor of the policy recommendation that Latin American countries should build local capacities before implementing direct economic instruments, than in favor of the alternative that these countries should adapt direct economic instruments to their institutional and political characteristics. 1

Recent theoretical developments show the conditions under which it is cost-effective for the regulator to induce perfect compliance in cap-and-trade programs. These conditions are based on the ability that a regulator with perfect information has to induce the firms to emit any desired level with different combinations of the number of permits supplied to the market and the monitoring probability, assuming that firms are expected profit maximizers. In this paper, we test this hypothesis with a series of laboratory experiments. Our results suggest that firms may behave significantly different from what these models predict precisely when the different combinations of the supply of permits and the monitoring probability induce compliance versus noncompliance. More specifically, by allowing noncompliance in a manner consistent with theory, the regulator could produce a decrease in emissions and an increase in the market price of tradable permits that is not predicted by the theoretical models. The implications for the cost-effective design of environmental policy are discussed.

We study the cost-effectiveness of inducing compliance in a program that caps aggregate emissions of a given pollutant from a set of heterogeneous firms based on emissions standards and the relative cost-effectiveness of such a program with respect to an optimally designed program based on tradable discharge permits. Our analysis considers abatement, monitoring and sanctioning costs, as well as perfect and imperfect information on the part of the regulator with regard to the polluters' abatement costs. Under perfect information we find that (a) the total-cost-effective design of a program based on standards is one in which the standards are firm specific and perfectly enforced, and (b) the total cost of an optimally designed program based on standards is lower than the total cost of an optimally designed transferable emission permits system, except under special conditions. This is true when it is optimum to induce perfect compliance and when it is not. Under imperfect information, nevertheless, it is only by implementing a system of tradable permits and perfectly enforcing it with a constant marginal penalty tied to the price of the permits, that the regulator can surmount the informational problem and at the same time minimize the total cost of the program with certainty.

We study the problem of a regulator who must control the emissions of a given pollutant from a series of industries when the firms' abatement costs are unknown. We develop a mechanism in which the regulator asks firms to report their abatement costs and implements the most stringent emissions standard consistent with the firms' declarations. He also inspects one of the firms in each industry which declared the cost structure consistent with the least stringent emissions standard and with an arbitrarily small probability, he discovers whether the report was true or not. The firm is punished with an arbitrarily small fine if and only if its report was false. This mechanism is simple, is implementable in practice, its unique equilibrium is truth telling by firms, it implements the first best pollution standards and shares some features of the regulatory processes actually observed in reality.