Viet Nam has currently the third-largest coal-fired power plant development program in the world. The effect of coal-fired power stations on the country’s environment has not, however, been extensively studied by researchers and policymakers, primarily because of a lack of granular air quality data. To fill this gap, we explore the potential of satellite data on air pollution, specifically nitrogen dioxide (NO) and sulfur dioxide (SO) emissions. We show the advantages and limitations of this novel data source for economic research. Preliminary results from our Viet Nam case study indicate that locations with power plants have elevated levels of NO but not SO. We further investigate the relationship between power stations and nightlight, which is a proxy for economic prosperity. The analysis shows a positive relationship between the two, suggesting a trade-off between air quality and economic development in Viet Nam.

JEL codes: H5, Q5