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CIRANO-CIREQ Workshop on Environmental and Natural Resource Economics


Friday 9 Feb 2024
From 9AM To 12PM



This workshop on natural resource and environmental economics hosted Justin Kakeu, Associate Professor at Université de l’Île-du-Prince-Édouard. The second speaker was David Benatia, Assistant Professor at HEC Montréal, who presented “Air Pollution and Children's Health Inequalities”.


  • Justin Kake (Université de l’Île-du-Prince-Édouard)
    Multi-pollutant Cap-and-Trade Systems with Heterogeneous Firms: An Optimal Transport Approach
    This study addresses the critical issue of simultaneous exposure to multiple air pollutants, a growing concern for policymakers. Traditional cap-and-trade markets, with their single-pollutant focus, fall short in managing the complex interactions of pollutants like carbon monoxide (CO), particulate matter (PM), nitrogen oxides (NOx), sulfur dioxide (SO2), and ozone (O3), which significantly impact human health and the environment. Our research introduces a novel multi-pollutant cap-and-trade system, designed to overcome these limitations. This system encompasses a variety of polluting firms and a pollution control authority issuing permits that bundle diverse pollutant rights. We innovate by using optimal mass transportation techniques to efficiently allocate these multi-pollutant permits across a heterogeneous array of firms. A decentralized approach allows for an equilibrium in permit pricing and provides a geometric characterization of firms based on their permit selection. Our analysis reveals strategic behaviors in permit selection and market segmentation within the multi-pollutant cap-and-trade framework. By implementing numerical simulations with computational geometry and optimal transport methods, we demonstrate the determination of permit prices and the optimal allocation of demand in a multi-pollutant market. This research represents a significant advancement in the economics of climate policy and air quality management, offering a more comprehensive and effective approach to tackling environmental challenges.
  • David Benatia (HEC Montréal)
    « Air Pollution and Children's Health Inequalities »
    Co-auteurs : En collaboration avec Milena Suarez-Castillo (DREES, PSE), Christine Le Thi (INSEE, OECD), et Vianney Costemalle (DREES)
    Résumé : This paper examines the differential impacts of early childhood exposure to air pollution on children's health care use across parental income groups using French administrative data. In a quasi-experimental design, we make use of exogenous air pollution shocks induced by variations in local thermal inversion exposure across different birth cohorts and municipalities.
    We find that temporary surges of air pollution exposure during early life stages significantly affect the likelihood of emergency admissions, doctor visits, and medication use related to respiratory problems in young children. We uncover large air pollution-related health inequalities between children by estimating the treatment effect heterogeneity with machine learning techniques. These detrimental health effects are concentrated among approximately 10\% of the infant population, who are not necessarily the most exposed but are mainly characterized by poor health indicators at birth and lower parental income. Our study demonstrates that prioritizing interventions in regions identified by simple vulnerability metrics yields more effective mitigation of adverse health impacts compared to strategies solely based on pollution exposure levels.


This event was held in English.

Benatia, David
Assistant Professor, HEC Montréal
Kakeu, Justin
Associate Professor, Université de l’Île-du-Prince-Édouard


1130 Rue Sherbrooke O #1400, Montréal, QC H3A 2M8, Canada