OECD warns of rising costs of air pollution
Premature deaths caused by air pollution in China are expected to increase by 300 per cent by 2060. Photo: V.T. Polywoda/ Flickr.com/CC BY NC ND
Outdoor air pollution could cause up to nine million premature deaths a year by 2060 and cost US$ 3.3 trillion annually as a result of sick days, healthcare expenditure and reduced agricultural output, unless action is taken.
In 2010, outdoor air pollution caused more than three million premature deaths worldwide, with elderly people and children most vulnerable. New projections presented in an OECD report “The Economic Consequences of Outdoor Air Pollution” imply a doubling, or even tripling, of premature deaths from particulate matter (PM2.5) and ozone (O3) – or one premature death every four or five seconds – by 2060.
The projected increase in concentrations of PM2.5 and ozone will result in significant economic costs to society. The direct market impact of air pollution in terms of lower worker productivity due to illness, higher spending on health care, and lower crop yields, could exceed US$ 3,000 billion annually by 2060, equal to one per cent of GDP. For example, between now and 2060, the number of annual work days lost to air-pollution-related illness is expected to jump from 1.2 to 3.7 billion.
These estimates of economic market impacts do not however reflect the true costs of air pollution because shortening of people’s lives and pain and suffering from respiratory and cardiovascular diseases do not really have a market price. The OECD has therefore also estimated the non-market welfare costs by using economic studies on how people value their health and how much they would be prepared to pay to reduce the health risks, i.e. by introducing policies and measures that would cut air pollutant emissions.
Based on this data, the current (2015) annual global welfare costs of mortality and morbidity from outdoor air pollution are estimated at US$ 3,440 billion, and by 2060 they would amount to between US$ 20,000 and 27,000 billion a year (see table).
Table: Total global welfare costs of air pollution (billions US$)
|Market impacts (health expenditures; labour productivity; and agriculture)||330||730||3,300|
|Non-market impacts (mortality and morbidity)||3,440||6,610–6,900||20,540–27,570|
It should be noted that air pollution damage to ecosystems, biodiversity and our cultural heritage has not been assigned any monetary value and is therefore not included in these economic estimates.
According to the projections, the biggest rises in air pollution mortality rates are expected in India, China, Korea and Central Asian countries, where rising populations and congested cities mean more people are exposed to high levels of pollution. The premature death rates are forecast to be up to three times higher in 2060 than in 2010 in China and up to four times higher in India. Mortality rates are however seen to be stabilising in the United States and falling in much of Western Europe thanks in part to efforts to move to cleaner energy and transport.
Projected GDP losses will be biggest in China, Russia, India, Korea and countries in Eastern Europe and the Caspian region, as health costs and lower labour productivity hit output.
“The number of lives cut short by air pollution is already terrible and the potential rise in the next few decades is terrifying,” said OECD Environment Director Simon Upton. “If this is not motivation enough to act, this report shows there will also be a heavy economic cost to not taking action. We must prevent these projections from becoming reality.”
“It is time for governments to stop fussing about the costs of efforts to limit air pollution and start worrying about the much larger costs of allowing it to continue unchecked. Their citizens’ lives are in their hands,” concluded Simon Upton.
Read the report.
The policy briefing.