While there is a shifting of pollution as you describe, it also results in a decrease in pollution per given unit of power generated. It is easier to control particulate and gaseous discharges in a central location than in small individual locations. The main problem with centralized power generation is the huge losses in power lines on the way to the consumer.
Further cleaning up fossil fuel burning automobile exhaust has gone about as far as it can go. Under some situations now, cars expel cleaner air than than take in.
Alternative "clean" energy sources are going to have to replace fossil fuel if they are going to gain further in eliminating air pollution.
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