Correspondence/Rebuttal pubs.acs.org/est
Comment on “Diminishing Returns or Compounding Benefits of Air Pollution Control? The Case of NOx and Ozone” n their article entitled “Diminishing Returns or Compounding Benefits of Air Pollution Control? The Case of NOx and Ozone”.1 Pappin et al., explore the complexity of managing emissions of nitrogen oxides (NOx) that can lead to the formation of tropospheric ozone (O3). We point out two critical shortcomings of the article. First, it is not clear that the authors are drawing the correct policy implications. Second, the simulation design which features reducing many pollutants simultaneously is problematic. It is well-known that O3 formation is a nonlinear function of concentrations of NOx and VOCs2. According to Pappin et al.,1 the marginal benefit (MB) function rises with NOx abatement. This is unusual, since, for other pollutants, the MB generally falls with higher levels of abatement (marginal damage usually rises with emissions). In the case explored in Figure 5 of their paper, the MB function rises more slowly than the marginal cost function. The efficient solution to this problem is the same as for every other pollutant- one should equate marginal cost of abatement (MC) to MB. This example of nonconvexity does not violate the second order conditions for a maximum. The authors argue that Figure 5 indicates there is an “economic incentive for higher levels of abatement than were previously advisible”. If previous advice is to equate MC to MB, Figure 5 supports that advice. The case of a slowly rising positive MB function is only one possible example of the MB function found in their results. If VOCs are limited, additional NOx emissions reduce O3 through titration.2 The MB function becomes negative. This happens for point sources in Los Angeles and New York in Figure 2 (panel A.) in Pappin et al.,1 where the MB function is negative over the entire range of abatement considered. Figure 1 below shows the MB and MC functions corresponding to this case. The more abatement undertaken, the more inefficient the policy becomes. In terms of O3 exposure, both of these cities would be better off with zero abatement of NOX from their point sources. Current
I
regulations force NOx abatement in both cities. O3 nonconvexity in this case implies current regulations encourage too much abatement. Another potential case concerns mobile sources in Los Angeles and New York modeled in Figure 2 (panel A) Pappin
Figure 2. Nonconvex damages and optimal pollution control, Case II.
et al.,.1 With mobile sources, the MB is negative at zero abatement and then rapidly becomes positive. As shown in Figure 2, the MB function is likely to be steeper than the MC function. The second order conditions fail. It is bad policy to equate MC to MB. The optimal solution is either zero abatement or 100% abatement. The key question becomes whether it is better to abate completely or not at all. The second issue we explore is whether the simulation design employed by Pappin et al.,1 is helpful for designing more efficient pollution regulations or even for measuring the MB of NOx abatement. Pappin et al. reduce all pollutants by a uniform percentage in their simulations. The background levels of other pollutants are falling at the same time the pollutant in question, NOx, is falling. This is particularly troublesome for studying O3 management because it is measuring the combined effect of abating both NOx and VOCs. There is no reason to expect a priori that this is the best policy. Further, it leads to a biased estimate of the MB of NOx abatement because VOCs are not being held constant. The nonlinear relationship between NOx, VOCs, and O3 is shown in Figure 3 (Figure 1a in ref 2). Beginning at point “a”, further NOx control yields increasingly negative MB. Once NOx abatement falls below the O3 ridge shown in the diagram at point “b”, the marginal benefits become positive at a decreasing rate. There is no evidence of a rising MB function. Even in the case of O3 formation, where one is interested in both controlling NOx and VOCs, reducing them proportionately explores only one policy option. The optimal strategy may
Figure 1. Nonconvex damages and optimal pollution control, Case I. © 2015 American Chemical Society
Published: December 18, 2015 500
DOI: 10.1021/acs.est.5b05324 Environ. Sci. Technol. 2016, 50, 500−501
Environmental Science & Technology
Correspondence/Rebuttal
Figure 3. O3 Isopleth. Source: Figure 1a from ref 2, used with permission granted from the American Geophysical Union. Points a, b, and c added by authors.
involve different percentage reductions in each pollutant. For example, it is possible that in situations with very low NOx to VOC ratios, it may be more effective to focus on reducing NOx concentrations and leaving VOC’s alone. The final issue is whether control of criteria pollution should involve uniform rules or be location specific.3 Typically, regulations should focus additional abatement resources on emissions with higher damage per ton. Whereas this principle would normally focus more emission reductions in urban centers with their higher human exposure per ton, O3 formation provides a special case because of titration. Nonconvexity can lead to counterintuitive policies and perverse policy outcomes. It is important to design regulations that reflect both atmospheric chemistry as well as human exposure.
Robert Mendelsohn Edwin Weyerhauser Davis Professor of Forest Policy, Yale School of Forestry and Environmental Studies, 195 Prospect Street, New Haven, Connecticut 06511, United States
Nicholas Z. Muller*
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Middlebury College and NBER, 303 College Street, Middlebury, Vermont 05753, United States
AUTHOR INFORMATION
Corresponding Author
*Phone: (802)-443-5981; e-mail:
[email protected]. Notes
The authors declare no competing financial interest.
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REFERENCES
(1) Pappin, A. J.; Mesbah, S. M.; Hakami, A.; Schott, S. Diminishing Returns or Compounding Benefits of Air Pollution Control? The Case of NOx and Ozone. Environ. Sci. Technol. 2015, 49, 9548−9556. (2) Sillman, S.; He, D. Some theoretical results concerning O3-NOxVOC chemistry and NOx-VOC indicators. J. Geophys. Res. 2002, 107 (D22), 4659. (3) Muller, N.; Mendelsohn, R. Efficient Pollution Regulation: Getting the Prices Right. American Economic Review 2009, 99, 1714− 1739.
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DOI: 10.1021/acs.est.5b05324 Environ. Sci. Technol. 2016, 50, 500−501
