Publications

The Economic Consequences of Outdoor Air Pollution

Published on June 09, 2016

Also available in: French

book

This report provides a comprehensive assessment of the economic consequences of outdoor air pollution in the coming decades, focusing on the impacts on mortality, morbidity, and changes in crop yields as caused by high concentrations of pollutants. Unless more stringent policies are adopted, findings point to a significant increase in global emissions and concentrations of air pollutants, with severe impacts on human health and the environment. The market impacts of outdoor air pollution are projected to lead to significant economic costs, which are illustrated at the regional and sectoral levels, and to substantial annual global welfare costs.

TABLE OF CONTENTS

Preface and acknowlegements
Executive summary
The links between outdoor air pollution and economic growth
A framework for assessing the economic consequences of outdoor air pollution
Projections of economic growth and impacts of outdoor air pollution
Consequences of outdoor air pollution for economic growth
Welfare costs of outdoor air pollution to 2060
Annexes3 chapters available
Description of the ENV-Linkages model
Description of the TM5-FASST model
Methodology to calculate the health impacts
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OBJECTIVE AND BACKGROUND

This report provides for the first time a plausible global projection of the magnitude of the economic consequences of outdoorair pollution in absence of policy action other than those already in place. The projections thus reflect the costs of inaction of outdoor air pollution.

The OECD Environmental Outlook to 2050: Consequences of Inaction took no account of the feedbacks from environmental challenges and resource scarcity to the economy. This report seeks to address this gap through a detailed economic modelling framework that links outdoor air pollution to economic growth and welfare.

The report focuses on the impacts of outdoor air pollution caused by high concentrations of particulate matter (PM2.5) and ground level ozone for the period 2015-2060. The report projects the market costs of outdoor air pollution (focusing on labour productivity, health care expenditures due to illness and changes in crop yields) using a modelling approach, which links economic activity to emissions of air pollutants, concentrations, biophysical impacts and finally feedback effects from these impacts on the economy. The analysis also evaluates non-market health impacts (mortality and morbidity) using results from direct valuation studies.

POLICY HIGHLIGHTS

Main findings

Premature deaths from exposure to particulate matter and ozone
Projected number of deaths caused by outdoor air pollution per year per million people

Premature deaths from exposure to particulate matter and ozone
Projected number of deaths caused by outdoor air pollution per year per million people

Change in regional GDP from market impacts, central projection
Percentage change w.r.t. no-feedback projection, 2060

Change in regional GDP from market impacts, central projection
Percentage change w.r.t. no-feedback projection, 2060

 

Market and non-market costs

OECD work on…


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