This was created in partnership with Environment for Development .
In the past two decades, rapid population and economic growth on the U.S.–Mexico border has spurred a dramatic increase in electricity demand. In response, American energy multinationals have built power plants just south of the border that sell most of their electricity to the United States. This development has heightened concern about border area’s already-poor air quality because these plants effectively skirt U.S. environmental regulations. Yet to our knowledge, this concern has not been subjected to rigorous scrutiny. This paper uses a suite of air dispersion, health impacts, and valuation models to assess the benefits of offsetting polluting emissions from two power-exporting plants inMexicali, Baja California. We find that these plants have extensive health impacts, including more than 1.9 short-term mortalities and hundreds of respiratory hospital admissions per year, which we value atalmost US$8 million. The vast majority of these health impacts are associated with ozone pollution in the United States caused by one of the two plants’ emissions. These findings bolster the case for changingU.S. law either to require power-exporting plants to reduce or offset their emissions or to provide incentives for them to do so.