Costs and Benefits of Reducing Air Pollutants Related to Acid Rain

Abstract

The 1990 Clean Air Act Amendments initiated a dramatic reduction in emissions of sulfur dioxide and nitrogen oxides by electric power plants. This paper presents the results of an integrated assessment of the benefits and costs of the program. Dramatic uncertainties characterize the estimates especially with respect to the benefits of the program, many of which were modeled explicitly. The lion's share of benefits results from reduced risk of premature mortality, especially through reduced exposure to sulfates, and these expected benefits measure several times the expected costs of the program. Significant benefits also are estimated for improvements in health morbidity, recreational visibility, and residential visibility, each of which measures approximately equal to costs. Areas that were the focus of attention in the 1980s-including effects to soils, forests, and aquatic systems-still have not been modeled comprehensively, but evidence suggests that benefits in these areas are relatively small, at least with respect to "use values" for the environmental assets that are affected. Copyright 1998 Western Economic Association International.

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