Dirty neighbors — Pollution in an interlinked world

We apply a network approach to analyze individual and aggregate consumption that generates predominately local pollution (e.g., noise, water and air quality, waste disposal sites). This allows us to relate the individual pollution levels to network centralities and to determine the effects of transfers among agents on the aggregate contamination. We then apply our theoretical framework to analyze the European data on fossil fuel energy consumption and discuss the impact of EU redistributive transfer policies on the aggregate level of pollution. •We apply network approach to analyze individual and aggregate consumption that generates local pollution.•Individual consumption that generates local pollution is related to network centralities.•The theoretical model is calibrated to European data on fossil fuel energy consumption.•The impact of EU redistributive transfer policies on the aggregate level of pollution is discussed.