New report says clean air equals economic boost

14 February 2014 by Paul Holshouser

A recent study by the esteemed National Bureau of Economic Research (NBER) and reported by The Economist confirms that clean air is not simply a good choice for the environment, but provides a boost to the economy as well. This study adds to an enormous collection of evidence that clean air and economic development are not a trade-off, but go hand in hand.

In the paper titled: "Every breath you take—every dollar you'll make: the long-term consequences of the Clean Air Act of 1970," authors Isen, Rossin-Slater, and Walker found that cleaner air raised lifetime incomes for Americans. This happened because air pollution lowered lifetime incomes due to illnesses and health problems that caused many people to drop out of the workforce, and restoring this economic loss outweighed the costs associated with pollution controls. Given the known impact of air pollution on cardiovascular and lung health, it is only partly surprising to learn how harmful the economic losses from pollution really are.

The case for wind power is even stronger. The immediate responses to the Clean Air Acts tended to focus on emissions-reducing retro-fits which reduced pollution from power plants and increased the short-term price of power, although we can see that it was more than repaid in the long run. Wind power, on the other hand, is a win-win from the start. Repeated studies from grid operators show that wind power reduces costs for consumers. Just in the past five years, cost studies from the PJM grid (a power grid ranging from Pennsylvania to Virginia to Ohio), Illinois, Europe as a whole, Massachusetts, New England, Kansas and Oklahoma, the Upper Midwest (MISO), the Southeast, and Texas have all confirmed that wind power saves money for ratepayers.  In addition to reducing prices, wind power provides jobs, investment in local communities, and provides emissions-free energy that the NBER confirms also boosts the economy by eliminating long-term health problems.

Read the full Economist article, “Clean living pays off” here: http://www.economist.com/blogs/freeexchange/2014/02/environmentalism