By Tim Halliday, John Lynham, and Aureo de Paula
Since its inception, the Environmental Protection Agency (EPA) in the United States has proven itself to be effective at reducing air pollution. For the six ‘criteria’ pollutants that the EPA is mandated to regulate, emissions of all six have declined substantially. Particulates have declined by 38% since 1990. Furthermore, large reductions in particulate pollution in the 1970s have been shown to be a direct effect of EPA regulation. Now that air pollution in many parts of the US has declined significantly, an important policy question becomes how much further reduction is desirable.
Understanding the optimal level of air pollution is critical to setting the National Ambient Air Quality Standards or NAAQS. However, doing so is hampered by two challenges. The first is that, while the costs of pollution abatement are straight-forward to measure using units such as kilowatts of energy or laptops produced, the benefits are harder to quantify. Randomized trials are not an option because it is unethical to deliberately expose people to toxic air pollution. The second challenge is that while the NAAQS correspond to one pollutant (e.g. carbon monoxide or sulfur dioxide), most sources of pollution emit many pollutants at once. As a result, identifying the costs of any one pollutant is very difficult as any given pollutant is confounded by others. Assigning blame to particulates then becomes a challenge. In fact, many academic studies that look at the effect of particulates alongside other pollutants find that particulates have no effect on health outcomes. One way to address these two challenges is to find a ‘natural’ experiment – a situation where the general public has been randomly exposed to pollution and, specifically particulates, in a way that mimics an actual experiment.
The largest stationary source of sulfur dioxide pollution in the US is Kīlauea volcano located on the island of Hawai`i. This sulfur dioxide reacts with sunlight, oxygen, dust and water in the air to produce ‘vog’ (volcanic smog) which is one species of particulate pollution. The Hawaiian Islands typically have some of the best air quality in the world. But whenever Kīlauea volcano starts emitting gases and trade winds die down, the state’s 1.4 million residents experience short-term exposure to elevated levels of particulates. Particulates are far-and-away the main pollutant in the State of Hawai`i and they are very weakly correlated with other pollutants unlike other sources of particulates such as coal-fired power plants.
In a recent paper, we leverage volcanic emissions from Kīlauea over the period 2000-2012 to estimate the causal impact of particulates on emergency room (ER) admissions and charges. We employ measurements of air quality taken from various monitoring stations across the state and administrative data on ER utilisation due to pulmonary-related reasons. An important feature of our study is that our cost data are more accurate than the cost measures used in much of the literature. We isolate variation in particulate pollution on the island of Oahu (which is to the northwest of the island of Hawai`i) that is the consequence of emissions from Kilauea and wind direction to estimate the health costs of particulates.
We find strong evidence that daily exposure to particulate pollution increases pulmonary-related ER admissions. Our instrumental variables estimates indicate that one standard deviation increase in particulates on Oahu increases ER charges for pulmonary-related reasons by 25-35%. These effects are mostly concentrated among the very young. We provide evidence of harm due to particulate pollution below the NAAQS.