NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Nicholas Muller

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Working Papers and Chapters

August 2013Toward the Measurement of Net Economic Welfare: Air Pollution Damage in the U.S. National Accounts—2002, 2005, 2008
in Measuring Economic Sustainability and Progress, Dale W. Jorgenson, J. Steven Landefeld, and Paul Schreyer, editors
This analysis measures the Gross External Damage (GED) attributable to air pollution emissions in the U.S. economy in 2002, 2005, and 2008. The paper measures three indices: the GED, the GED-to-Value Added ratio (GED/VA), and environmentally-adjusted Value Added (EVA), defined as Value Added minus the GED. Each of these indices is computed for each sector of the U.S. economy in 2002, 2005, and 2008. Real GED is estimated to be $480 billion in 2002, $430 billion in 2005, and $350 billion in 2008. Most of the reduction in GED from 2005 to 2008 is attributable to fewer emissions in the utility, manufacturing, agriculture, and transportation sectors. Nominal GED/VA begins in 2002 at 0.054, drops to 0.039 in 2005, and then declines again to 0.030 in 2008. The empirical time-series estimation of...
February 2013Market-based Emissions Regulation When Damages Vary Across Sources: What Are the Gains from Differentiation?
with Meredith Fowlie: w18801
Much of the air pollution currently regulated under U.S. emissions trading programs is non-uniformly mixed, meaning that health and environmental damages depend on the location and dispersion characteristics of the sources. Existing policy regimes ignore this fact. Emissions are penalized at a single permit price, regardless of the location of the source. In theory, differentiated policies can be designed to accommodate non-uniformly mixed pollution using emissions penalties that vary with emissions damages. Under perfect certainty, damage-based policy differentiation is unambiguously welfare improving. In the presence of uncertainty about damages and abatement costs, differentiated policies need not welfare dominate simpler, undifferentiated designs. Using rich data from a major U.S. emis...

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