The Economic Benefits versus Environmental Costs of India’s Coal-Fired Power Plants

Présentation de Geoffrey Barrows - CNRS, Ecole Polytechnique

Geoffrey Barrows
En coll. avec Teevrat Garg (UC San Diego) et Akshaya Jha (Carnegie Mellon)

Abstract :
Developing countries characterized by increasing electricity demand face a dilemma: fossil-fuel fired generation is cheap and reliable yet has substantial environmental consequences. Using a difference-in-differences approach comparing locations close to versus far away from coal-fired power plants in India, we show that increases in coal-fired capacity result in sizable increases in local air pollution levels and infant mortality, with no corresponding increase from non-coal based electricity generation. In contrast, using data on district-level GDP, manufacturing sales, agricultural outcomes, and nighttime luminosity, we find that coal-fired capacity increases have relatively small statistically insignificant impacts on local economic benefits, though we do find benefits of state-wide electricity generation capacity. Combined, our results indicate that the environmental costs of coal-fired power plants vary substantially over space while the economic benefits from these plants are distributed across the state.