1 March – The Local Environmental Costs and Economic Benefits of India’s Coal-Fired Power Plants

Date: 1 March 2019
Time: 12:00pm
Location: Baker Hall 129, Conference Room
Speaker: Teevrat Garg
Topic: The Local Environmental Costs and Economic Benefits of India’s Coal-Fired Power Plants

Abstract: Developing countries characterized by increasing electricity demand face a dilemma: fossil-fuel fired electricity production is cheap and reliable yet has substantial environmental consequences. This paper uses a difference-in-differences framework to quantify the the relative local environmental costs versus economic benefits of increases in coal-fired capacity on locations close to versus far away from power plants in India.  We show that increases in coal-fired capacity result in sizable increases in air pollution and infant mortality.  In contrast, coal-fired capacity increases have small, statistically insignificant impacts on local economic benefits, measured using data on district-level GDP as well as survey and census data on output, wages, and employment in the manufacturing and agricultural sectors.  Combined, our results indicate that the environmental costs of coal-fired power plants vary substantially over space while the economic benefits associated with these plants are distributed equally across the state.  This suggests that new coal-fired power plants should primarily be sited based on environmental costs.