Environmental Accounting for Pollution in the United States Economy

• Published in: The American economic review Vol. 101; no. 5; pp. 1649 - 1675
• Main Authors: Muller, Nicholas Z., Mendelsohn, Robert, Nordhaus, William
• Format: Journal Article
• Language: English
• Published: Nashville American Economic Association 01-08-2011
• Subjects: Agricultural production; Air pollutants; Air pollution; Carbon dioxide emissions; Carbon emissions; Coal; Coal resources; Combustion; Costs; Damage; Economic theory; Economics; Electric power industry; Emissions; Environmental accounting; Environmental economics; Environmental pollution; Environmental studies; Estimation; Externalities; Externality; Flood damage; Industrial plant emissions; Livestock industries; Market prices; Mortality; National accounting; Pollutant emissions; Pollutants; Pollution control; Power generation; Power plants; Quarrying; Regulated industries; Reviews; Shadow prices; solid wastes; Studies; U.S.A; Value added; USA
• ISSN: 0002-8282; 1944-7981
• DOI: 10.1257/aer.101.5.1649

This study presents a framework to include environmental externalities into a system of national accounts. The paper estimates the air pollution damages for each industry in the United States. An integrated-assessment model quantifies the marginal damages of air pollution emissions for the US which are multiplied times the quantity of emissions by industry to compute gross damages. Solid waste combustion, sewage treatment, stone quarrying, marinas, and oil and coal-fired power plants have air pollution damages larger than their value added. The largest industrial contributor to external costs is coal-fired electric generation, whose damages range from 0.8 to 5.6 times value added.