Conference Programme

We study whether industrial plants exploit wildfire smoke episodes as cover to increase emissions. Using a difference-in-differences approach, we find that relative to air quality monitors without proximate industrial plants, those located near industrial plants record a significantly larger increase in SO₂ concentrations from non-smoke to smoke days, consistent with plants strategically timing emissions to coincide with wildfire smoke. At the same time, satellite-based thermal infrared radiation indicates intensified plant activity, pointing to opportunistic increases in production rather than coincidental factors. The emission response to wildfire smoke vanishes on weekends and holidays but is stronger among plants with more flexible production capacity or operating in financially distressed industries, reinforcing the role of deliberate operational choices under economic incentives. Moreover, the extent of the response is affected by local regulatory monitoring, suggesting that enforcement capacities moderate firms’ incentives to pollute strategically. Overall, our findings reveal that wildfires not only degrade air quality directly but also create opportunities for industrial polluters to conceal emissions, underscoring the need for regulatory frameworks that anticipate and deter such opportunistic behavior.