Do Environmental Markets Cause Environmental Injustice? Evidence from California's Carbon Market
Market-based environmental policies are widely adopted on the basis of allocative efficiency. However, there is growing concern that market-induced spatial reallocation of pollution could widen existing pollution concentration gaps between disadvantaged and other communities. We estimate how this "environmental justice gap" changed following the 2013 introduction of California's carbon market, the world's second largest and the one most subjected to environmental justice critiques. Embedding a pollution dispersal model within a program evaluation framework, we find that while EJ gaps across criteria air pollutants were widening prior to 2013, they have since fallen as a consequence of the carbon market.
Non-Technical Summaries
- The gap in pollution exposure between disadvantaged and other communities narrowed by 21 percent for nitrogen dioxide, 24 percent for...
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