• OECD Warns of the Economic Risks of Air Pollution

Air Clean Up

OECD Warns of the Economic Risks of Air Pollution

Jul 27 2016

A new report released by the Organisation for Economic Cooperation and Development (OECD) has highlighted the economic impact that air pollution could have on the world. While it’s primarily thought of as being detrimental to both our individual lungs and the environmental as a whole, it will also be catastrophic for the global bank balance.

The report estimates that by the year 2060, spending on issues directly caused by air pollution could reach a whopping £2 trillion ($2.6 trillion), which is 1% of world GDP. The biggest contributing factors to this gargantuan deficit would come in the form of medical bills, poor crop yields and working hours lost to illness.

Economy to suffer as well as environment and welfare

At present, roughly 6.5 million lives are lost every year to poor air quality. This figure could rise to 9 million by 2060, with the largest spikes in death rates expected in countries which already endure poor air quality, such as China and India.

Indeed, India currently hosts 22 of the 50 dirtiest cities in the world, with nitrogen oxides (NOx) pollution over its capital city of Delhi reaching alarming levels. While China has made efforts to clean up its act in recent years, it still suffers from huge levels of NOx pollution from the power plants across the nation and much work is still needed. Other countries expected to suffer are Korea, parts of Russia and Central Asian nations like Kazakhstan and Uzbekistan.

At the same time, this elevated death toll will have a knock-on effect on the economy, as well. The welfare costs associated with such a rise in premature deaths are estimated to total up to £20 trillion in the period between now and 2060, while hospital admissions could cost the world economy £1.7 trillion in 2060 alone.

Cooperative action required

The report outlines a number of policies which the OECD believe contain the key to alleviating the problem and avoiding the catastrophic consequences – both in terms of economy and welfare – which could arise from it.

These focus largely on improving air quality and reducing transport-related pollution, primarily through better policing of fuel quality standards and automotive emissions, as well as a concerted effort to pursue cleaner, renewable methods of energy generation and consumption.   

“The potential economic consequences of both the market and non-market impacts of outdoor air pollution are very significant,” stated the report. “There is no one-size-fits-all recipe for reducing the impacts of air pollution as there are large differences among countries in terms of prevalent pollutants and sources.”


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