Date of Original Version

8-2014

Type

Article

Abstract or Description

When environmental regulations focus on a subset of power plants, the ultimate goal of human health protection may not be reached. Because power plants are interconnected through the electrical grid, excessive scrutiny of a group of facilities may generate more pollution out of another group, with potential deleterious effects to public health. I study the impact of the shutdown of nuclear power plants in the Tennessee Valley Authority (TVA) in the 1980s, on health outcomes at birth. After the Three Mile Island accident in 1979, the Nuclear Regulatory Commission (NRC) intensifies inspections in nuclear facilities leading to the shutdown of many of them, including Browns Ferry and Sequoyah in the TVA area. I first show that, in response to the shutdown, electricity generation shifts one-to-one to coal-fired power plants within TVA, increasing air pollution in counties where they are located. Second, I find that babies born after the shutdown have both lower birth weight and lower gestational age in the counties most affected by the shutdown. Third, I highlight the presence of substantial heterogeneity in those effects depending on how much more electricity those coal-powered facilities are generating in response to the shutdown. Lastly, I use the heterogeneity in response to the shutdown to provide suggestive evidence on the "safe" threshold of exposure to total suspended particles (TSP), which may help the Environmental Protection Agency (EPA) to set the National Ambient Air Quality Standards (NAAQS) for particulate matters (PM). It may also help regulators to incentivize power companies to respond optimally to unexpected energy shortages.

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