Carnegie Mellon University
“The Local Environmental Consequences of Coal Procurement at U.S. Power Plants”
Abstract: There are known to be significant environmental costs associated with burning coal in order to generate electricity. However, there are also sizable local environmental health costs associated with power plants’ coal purchase and storage behavior. We find that a 10% increase in coal stockpiles (number of deliveries) is associated with a 0.02% (0.07%) increase in the concentration of fine particulates on average. Local populations exposed to these fine particulates (PM2.5) have increased risk of lung and heart conditions. Translating the increase in PM2.5 associated with plants’ coal procurement behavior into mortality risk and monetizing this mortality risk, we calculate local environmental costs between $0.004-$0.02 per KWh. Finally, we show that the average increase in mortality rates associated with an increase in PM2.5 are substantially higher when we instrument using coal stockpiles and number of deliveries relative to OLS specifications; this result provides both a new identification strategy for the link between mortality rates and PM2.5 as well as further empirical evidence of the link between PM2.5 and plants’ coal procurement behavior.