Diminishing Returns or Compounding Benefits of Air Pollution Control? The Case of NOx and Ozone

A common measure used in air quality benefit cost assessment is marginal benefit (MB), or the monetized societal benefit of reducing 1 ton of emissions. Traditional depictions of MB for criteria air pollutants are such that each additional ton of emission reduction incurs less benefit than the previous ton. Using adjoint sensitivity analysis in a state-of-the-art air quality model, we estimate MBs for NOx emitted from mobile and point sources, characterized based on the estimated ozone-related premature mortality in the U.S. population. Our findings indicate that nation-wide emission reductions in the U.S. significantly increase NOx MBs for all sources, without exception. We estimate that MBs for NOx emitted from mobile sources increase by 1.5 and 2.5 times, on average, for 40% and 80% reductions in anthropogenic emissions across the U.S. Our results indicate a strictly concave damage function and compounding benefits of progressively lower levels of NOx emissions, providing economic incentive for higher levels of abatement than were previously advisible. These findings suggest that the traditional perception of a convex damage function and decreasing MB with abatement may not hold true for secondary pollutants such as O-3.