Clearing the air: incorporating air quality and environmental justice into climate policy

In addition to lower carbon dioxide emissions, policies to reduce fossil fuel combustion can yield substantial air quality co-benefits via reduced emissions of co-pollutants such as particulate matter and air toxics. If co-pollutant intensity (the ratio of co-pollutant impacts to carbon dioxide emissions) varies across pollution sources, efficient policy design would seek greater emissions reductions where co-benefits are higher. The distribution of co-benefits also raises issues of environmental equity. This paper presents evidence on intersectoral, intrasectoral and spatial variations in co-pollutant intensity of industrial point sources in the United States, and discusses options for integrating co-benefits into climate policy design to advance efficiency and equity.