Seminar

Energy Production and Health Externalities: Evidence from Oil Strike Refineries in France

Emmanuelle Lavaine (Paris School of Economics)

November 26, 2012, 11:00–12:30

Toulouse

Room MS 001

Environment Economics Seminar

Abstract

This paper examines the external effect of energy production on newborn health using a recent strike affecting oil refineries in France, in October 2010, as a natural experiment. First, we show that the temporary reduction in refining lead to a significant reduction in sulfur dioxide (SO2) concentrations. Second, this shock also significantly increased birth weight and gestational age of newborns, particularly for those exposed to the strike during the third trimester of pregnancy. Back-of-the-envelope calculations suggest that a 1 unit decline in SO2 leads to a 195 million euro increase in lifetime earnings per birth cohort. This externality from oil production should be an important part of policy discussions surrounding the production of energy.