Air pollution costs trillions / Friends of the Earth Scotland CC-BY

Premature deaths due to air pollution cause annual global costs of about US$225 billion in lost work days, and more than US$5 trillion in welfare losses, according to a new study.

Exposure to air pollution increases the risk of contracting cancers and heart, lung and respiratory diseases. According to the latest available estimates by the World Health Organization (WHO), 5.5 million premature deaths worldwide, or 1 in every 10 deaths, in 2013 were attributable to indoor and outdoor air pollution.

A joint study, entitled “The Cost of Air Pollution: Strengthening the economic case for action”, published by the World Bank and the Institute for Health Metrics and Evaluation, has estimated the costs of premature deaths related to air pollution.

Using the WHO estimates of premature mortality attributable to air pollution, the study valued the economic costs following two different approaches: Firstly a welfare-based approach that monetizes the increased fatality risk from air pollution according to individuals’ willingness to pay, and secondly an income-based approach that equates the financial cost of premature mortality with the present value of forgone lifetime earnings.

In 2013, the cost to the world’s economy of welfare losses due to exposure to ambient and household air pollution amounted to some US$5.11 trillion. In terms of magnitude, welfare losses in South Asia and East Asia and the Pacific were the equivalent of about 7.5 per cent of the regional gross domestic product (GDP), while in Europe and North America they were equal to respectively 5.1 and 2.8 per cent of GDP. At the low end, losses were still equal to 2.2 per cent of GDP in the Middle East and North Africa.

It is pointed out that the full costs of air pollution to society are even greater than is reported in the study. Examples of other costs not included in this report are the costs of illnesses (e.g. hospital care, medication), reduced output of agricultural crops, damage to natural ecosystems and cultural heritage, and lowered economic competitiveness of growing cities.

On top of being a major health risk, air pollution is also a drag on development. By causing illness and premature death, air pollution reduces the quality of life. By causing a loss of productive labour, it also reduces productivity and incomes.

According to the study, annual labour income losses cost the equivalent of 0.83 per cent of the gross domestic product (GDP) in South Asia. In East Asia and the Pacific, where the population is ageing, labour income losses represent 0.25 per cent of GDP, while in Sub-Saharan Africa, where air pollution impairs the earning potential of younger populations, annual labour income losses represent 0.61 per cent of GDP.

“Air pollution is a challenge that threatens basic human welfare, damages natural and physical capital, and constrains economic growth. We hope this study will translate the cost of premature deaths into an economic language that resonates with policy makers so that more resources will be devoted to improving air quality. By supporting healthier cities and investments in cleaner sources of energy, we can reduce dangerous emissions, slow climate change, and most importantly save lives,” said Laura Tuck, Vice President for Sustainable Development at the World Bank.

Christer Ågren

The report:

World Bank press release, 8 September 2016:

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