Abstract: In the past two decades, rapid population and economic growth on the U.S.–Mexico border has spurred a dramatic increase in electricity demand. In response, American energy multinationals have built power plants just south of the border that export most of their electricity to the United States. This development has stirred considerable controversy because these plants effectively skirt U.S. environmental air pollution regulations in a severely degraded international airshed. Yet to our knowledge, this concern has not been subjected to rigorous scrutiny. This paper uses a suite of air dispersion, health impacts, and valuation models to assess the human health damages in the United States and Mexico caused by air emissions from two power-exporting plants in Mexicali, Baja California. We find that these emissions have limited but nontrivial health impacts, mostly by exacerbating particulate pollution in the United States, and we value these damages at more than half a million dollars per year. These findings demonstrate that power-exporting plants can have cross-border health effects and bolster the case for systematically evaluating their environmental impacts.
The full paper is available free of charge at http://www.rff.org/RFF/Documents/RFF-DP-11-18-REV.pdf
Mean estimates of the annual value of health damages attributable to Intergen emissions are $230,000 in the United States and $104,000 in Mexico. Mean estimates of annual damages attributable to Sempra emission are $160,000 in the United States and $72,000 in Mexico. The total value of annual health damages attributable to both plants is $566,000.
Health effects, concentration-response and valuation studies are summarized in Appendix tables. For Ozone costs of five separate health effects are estimated: 1) Respiratory Hospital Admissions, 2) Asthma Emergency Room Visits, 3) School Absence Days, 4) Minor Restricted Activity Days and 5) Short-term Mortality. For particulates PM2.5 more effect costs are estimated including 1) Mortality, 2) Chronic Bronchitis, 3) Chronic bronchitis (CB) incidences are estimated annually for the age group 27 and over, 3) Nonfatal Heart Attacks, 4) Respiratory Hospital Admissions, 5) Cardiovascular Hospital Admissions, 6) Asthma Emergency Room Visits, 7) Acute Bronchitis in Children, 8) Upper Respiratory Symptoms in Children, 9) Lower Respiratory Symptoms in Children, 10) Asthma Exacerbations, 11) Work Loss Days, and 12) Minor Restricted Activity Days.
[The authors] use the VSL (value of a statistical life) estimate from Mrozek and Taylor (2002), which has a central value of $2.324 million. This estimate is quite conservative: it is at the low end of the values used in benefit-cost analysis. For example, 2009 U.S. EPA rules mandate that benefit-cost analyses use a VSL of $7.9 million, and 2009 U.S. Department of Transportation rules mandate a VSL of $6.0 million (Copeland 2010). Baseline incidence rates were obtained from the BenMap model used by U.S. EPA for regulatory analyses.
Chronic bronchitis (CB) incidences are estimated annually for the age group 27 and over. Baseline incidence and prevalence rates are from BenMap. There are three valuation studies for chronic bronchitis. All three are from the BenMap model, and no specific studies are cited. The two cost-of- illness studies, one with a 3 percent discount rate and one with a 7 percent discount rate, are weighted by age within the 27-and-over age group. The other study is based on willingness to pay to avoid a case of pollution-related chronic bronchitis; this valuation does not vary within the 27-and-over age group. Nonfatal heart attack (NFHA) incidences are estimated seasonally for the age group 18 and over. Baseline incidence rates are from BenMap. There are two NFHA valuation studies in TAF, both from BenMap with no specific study cited: one with a 3 percent discount rate, and one with a 7 percent discount rate. Both studies incorporate 10 years of medical costs and 5 years of wage costs.
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RFF Discussion Paper 11-18; January, 2012