Do Pollution Markets Harm Low Income and Minority Communities? Ranking Emissions Distributions Generated by California's RECLAIM Program
NBER Working Paper No. 25666
We compare the spatial distribution of emissions from Southern California’s pollution-trading program with that of a counterfactual command-and-control policy. We develop a normatively significant metric with which to rank the various distributions in a manner consistent with an explicit well-behaved preference structure. Results suggest trading benefited all demographic groups and generated a more equitable overall distribution of emissions even after controlling for its lower aggregate emissions. Upper-income and white demographics had more desirable distributions relative to low-income and some minority groups under the RECLAIM trading program, however, and population shifts over time may have undermined anticipated gains for African Americans.
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Document Object Identifier (DOI): 10.3386/w25666