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Estimating Indirect Benefits: Fracking, Coal and Air Pollution

Author

Listed:
  • Johnsen, Reid

    (California Department of Tax and Finance Administration)

  • LaRiviere, Jacob

    (University of Tennessee)

  • Wolff, Hendrik

    (Simon Fraser University)

Abstract

This paper estimates indirect benefits of improved air quality induced by hydraulic fracturing, or "fracking". The recent increase in natural gas supply led to displacement of coal-fired electricity by cleaner natural gas-fired generation. Using detailed spatial panel data comprising the near universe of US power plants, we find that coal generation decreased by 28%. Further, fracking decreased local air pollution by an average of 4%. We show that benefits vary geographically; air pollution levels decreased by 35% in the most affected region. Back of the envelope calculations imply accumulated health benefits of roughly $17 billion annually.

Suggested Citation

  • Johnsen, Reid & LaRiviere, Jacob & Wolff, Hendrik, 2016. "Estimating Indirect Benefits: Fracking, Coal and Air Pollution," IZA Discussion Papers 10170, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10170
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    References listed on IDEAS

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    Cited by:

    1. Hill, Elaine L., 2018. "Shale gas development and infant health: Evidence from Pennsylvania," Journal of Health Economics, Elsevier, vol. 61(C), pages 134-150.
    2. Ben Gilbert & Gavin Roberts, 2018. "Supply-side links in oil and gas markets," Working Papers 2018-04, Colorado School of Mines, Division of Economics and Business.

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    More about this item

    Keywords

    fracking; coal-fired power plants; air pollution; health; electricity;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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