Regulatory Federalism and the Distribution of Air Pollutant Emissions

Recent empirical work suggests that (i) incomes are converging through time, and (ii) income and pollution levels are linked. This paper weds these two literatures by examining the spatial and temporal distribution of pollution. After establishing that theoretical predictions about whether pollution will converge are critically linked to certain structural parameters, we explore pollution convergence using state-level data on two important pollutants¿nitrogen oxides and sulfur oxides¿from 1929 to 1999. We find stronger evidence of converging emission rates during the federal pollution control years (1970¿1999) than during the local control years (1929¿1969). These results suggest that income convergence alone may not be sufficient to induce convergence of pollutant emissions.