More Power Generation, More Wheat Losses? Evidence from Wheat Productivity in North China

The adverse effects of thermal power plants on crop yield have not received adequate attention. Thus, this study aims to evaluate these effects systematically to fill the gap by utilizing county-level wheat yield data from North China spanning from 2005 to 2016. Our findings indicate that the presence of an additional upwind thermal power plant is associated with a 1.4% decline in wheat yield. Notably, these yield losses are more pronounced in regions characterized by lenient environmental regulations or a high density of large-scale thermal power plants. Reduced wheat yield due to thermal power plants results in a decline in social welfare. Furthermore, we confirm that air pollution emitted from thermal power plants is the primary driver behind the decline in wheat yield.