Dirty Neighbors: Pollution in an Interlinked World
26 Pages Posted: 20 Aug 2018
Date Written: July 19, 2018
Abstract
We apply a network approach to analyze individual and aggregate consumption that generates predominately local pollution (e.g., noise, water and air quality, waste disposal sites). This allows us to relate the individual pollution levels to network centralities and to design policy measures aimed at reducing the aggregate contamination. We then apply our theoretical framework to analyze the European data on fossil fuel energy consumption and discuss possible transfer schemes that, according to our model, would result in lower aggregate levels of pollution in the EU.
Keywords: local pollution, negative externalities, networks
JEL Classification: Q52, Q54, H23, D85
Suggested Citation: Suggested Citation