By Diana Schoder

When air pollution becomes a problem, we find ways of protecting ourselves. We spend less time outside, shut the windows, or use asthma medication.

These solutions are called defensive investments. They help us to avoid harm, but they can be costly — in terms of both time and money.

In the October issue of the American Economic Review, Michael Greenstone and his co-authors Olivier Deschênes and Joseph Shapiro look at what happened to asthma medication usage, one common but expensive defensive investment, when a cap-and-trade program reduced air pollution throughout the Northeast.

Greenstone recently spoke with the American Economic Association about the success of the NOx (Nitrogen Oxides) Budget Trading Program, America’s air quality, and why defensive investments should matter more to economists and policymakers.

A transcript edited for length and clarity follows, and you can listen to the full interview, here.

Continue reading at the American Economic Association…

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Areas of Focus: Climate Economics
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Climate Economics
Climate change will affect every sector of the economy, both locally and globally. EPIC research is quantifying these effects to help guide policymakers, businesses, and individuals working to mitigate and...
Climate Science
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Climate Science
EPIC’s interdisciplinary team of researchers is contributing to a cross-cutting body of knowledge on the scientific causes of climate change and its social consequences.
Environment
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Environment
Producing and using energy damages people’s health and the environment. EPIC research is quantifying the social costs of energy choices and uncovering policies that help protect health while facilitating growth.
Air Pollution
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Air Pollution
Air pollution from fossil fuel combustion poses a grave threat to human health worldwide. EPIC research is using real-world data to calculate the effects of air pollution on human health...