Adjusting to Permanent Environmental Changes: Evidence from Agriculture and the US Acid Rain Program

TITLE
Adjusting to Permanent Environmental Changes: Evidence from Agriculture and the US Acid Rain Program

AUTHORS
Sanders, Nicholas, & Alan Barreca

STATUS
Unpublished working paper | 2015

LINK
Currently revising

ABSTRACT
The Acid Rain Program (ARP) of 1995 regulated the sulfur dioxide (SO2) emissions of pollution-intensive power plants in the United States (US). We are the first to examine how this large pollution-abatement program affected agricultural output in the US, with a focus on corn and soy, the two largest crops by both acreage and revenues. The expected impact of the ARP is ambiguous. Reductions in airborne SO2 imply less harmful acid deposition, but also less beneficial soil sulfur. Our core identification strategy takes advantage of differing treatment intensity across counties based on distance from regulated power plants, with additional tests by wind direction and soil types.