Regulation of air pollution from wood-burning stoves

Residential biomass burning is estimated to cause 29,000 premature deaths in Europe and North America annually. A number of studies show that existing regulations, primarily affecting new stoves, in the European Union and North America are effective in reducing emissions. However, it is not clear from these studies if there is a net welfare gain from regulation, nor how regulations should be designed in order to maximise the net welfare gain. We use an integrated assessment model to compare the net welfare gains of different schemes for regulating existing wood-burning stoves in Denmark. Most schemes we asses generate a net welfare gain, but a geographically differentiated tax on stove use generates the largest net gain. The results for Denmark suggest that there could be substantial welfare gains from imposing geographically differentiated regulation of existing residential wood-burning stoves in parts of North America and the EU.