Love where you live, but love it more with cleaner air

air pollutionElisa Lanzi, OECD Environment Directorate

“Paris sera toujours Paris, la plus belle ville du monde”, as Maurice Chevalier sang in 1939; the most beautiful city in the world! And yet, the city of light does not always shine: some days a year air quality is so bad that the Eiffel tower only looks like a faraway shade. Unfortunately, Paris is not the only place with air pollution problems and it is far from being the worst. The average yearly concentrations of PM2.5 were 18 µg/m3 in Paris in 2014, which is above the levels recommended by the World Health Organisation (WHO). But they were much higher in other cities, such as the Beijing area where they were more than 90 µg/m3.

Air pollution is a serious issue in most countries around the world and every year it causes severe damage to human health and the environment. The WHO estimates that ambient air pollution is the greatest environmental risk to health – causing more than 3 million premature deaths worldwide every year. Besides such a high death toll, air pollution affects human health, especially through respiratory and cardiovascular diseases. Moreover, there are strong effects on the environment, both natural and man-made. Think of all the beautiful monuments and buildings that regularly need cleaning because of the damages of air pollution…

None of this is really new, and air pollution has been a priority in environmental policy for decades. Yet it is still unresolved and clearly worsening in many areas of the world. To further motivate policy action, the report The Economic Consequences of Outdoor Air Pollution presents projections of emissions and concentrations of key pollutants, the related number of premature deaths, impacts on illness and on crop yields, and the resulting costs of outdoor air pollution.

According to the projections in this report, increasing economic activity and energy demand will result in higher emissions of air pollutants in the coming decades. This, together with other factors such as climate change and urbanisation, will lead to higher concentrations of PM2.5 and ground level ozone. Under business as usual, air quality is expected to worsen so much in the next decades that the amount of people in the world exposed to very high PM2.5 concentration levels is projected to double by 2060. In China and India, where concentrations are projected to reach particularly high levels, up to 60% of the population may be exposed to very high PM2.5 concentration levels by 2060.

Outdoor air pollution is projected to be the cause of 6-9 million deaths every year by 2060 at the global level, up from the 3 million deaths estimated in 2010. That is roughly equivalent to a person dying every 4 to 5 seconds. The projections show that there will also be an increasing number of cases of illness. For example, the report projects that, by 2060, around 3.75 billion working days could be lost due to illness.

These impacts from outdoor air pollution have economic consequences. Increasing cases of illness will result in people having more medical expenses, meaning that they will end up spending less on other things. Lost working days reduce labour productivity and lower crop yields reduce agricultural output. Such effects, when considered at large scale, can affect economic growth. This type of cost is referred to as “market cost” as it is related to market transactions, and is projected to be around 1% of global gross domestic product (GDP) by 2060. That is equivalent to the current GDP of France.

But air pollution also has consequences that go beyond market costs. The impacts on mortality and the pain and suffering from illness do not have a market price. Yet, they can be a heavy burden on people and on society. Using the results of studies that directly ask people how much they would be willing to pay to reduce health risks, we are able to place a value on these “welfare costs”. While these are not a direct cost to the economy, they nevertheless reflect people’s preferences and how much they value a possible policy that would reduce health risk. The global annual welfare costs associated with the premature deaths from outdoor air pollution are projected to rise from USD 3 trillion in 2015 to USD 18-25 trillion in 2060.

If public health and the environment weren’t convincing enough to push policy-makers to act, projecting future economic costs might encourage them more. Several policy options are available for policy makers, including emission pricing, fuel efficiency and quality standards, incentives to adopt end-of-pipe technologies or spatial planning. Policy makers just need to pick what is best for their countries.

Wouldn’t it be great if we could breathe clean air? We’ll always love our cities – “Paris sera toujours Paris” (so much so that the 1939 song has come back to the radio in a modern version by Zaz now) – but we would all enjoy them more if we didn’t have to worry about our health. And, since we’re at it, it would be nice to be able to take clear pictures of monuments, from the Eiffel tower in Paris to the Imperial Palace in Beijing.

Useful links

The Economic Consequences of Outdoor Air Pollution OECD, 2016

The Cost of Air Pollution: health Impacts of Road transport OECD, 2014

OECD work on environmental policy tools and evaluation

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