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Air Pollution and Solar Energy: Evidence from Wildfires

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  • Seung Min Kim
  • Kenneth Gillingham

Abstract

There is strong evidence on the mortality and morbidity external costs of air pollution. This paper focuses on another source of air pollution externality: the loss in solar electricity generation from increased atmospheric opacity due to air pollution. We use data from residential rooftop solar panels and exploit quasi-random variation in air opacity from wildfire smoke and wind conditions to estimate that PM2.5 pollution reduced annual solar generation in California by over 450GWh, or 4% of total potential generation. This is equivalent to an annual externality of $177 per ton of PM2.5 emitted. Our findings suggest that there is a positive feedback from decarbonisation policies, where reduced dependence on fossil fuels improves air quality, leading to an even greater productivity of solar generation, further reducing emissions.

Suggested Citation

  • Seung Min Kim & Kenneth Gillingham, 2024. "Air Pollution and Solar Energy: Evidence from Wildfires," CESifo Working Paper Series 10948, CESifo.
    • Handle: RePEc:ces:ceswps:_10948
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    References listed on IDEAS

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    More about this item

    Keywords

    solar energy; air pollution; equity;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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