Environmental Accounting for Pollution in the United States Economy Nicholas Z. Muller, Robert Mendelsohn and William Nordhaus

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Environmental Accounting for Pollution in the United States Economy
Nicholas Z. Muller, Robert Mendelsohn and William Nordhaus

American Economic Review, 101(5): 1649–75.
DOI:10.1257/aer.101.5.1649

Abstract
This study presents a framework to include environmental externalities into a system of national accounts. The paper estimates the air pollution damages for each industry in the United States. An integrated-assessment model quantifies the marginal damages of air pollution emissions for the US which are multiplied times the quantity of emissions by industry to compute gross damages. Solid waste combustion, sewage treatment, stone quarrying, marinas, and oil and coal-fired power plants have air pollution damages larger than their value added. The largest industrial contributor to external costs is coal-fired electric generation, whose damages range from 0.8 to 5.6 times value added. (JEL E01, L94, Q53, Q56)

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