China Pollution Costing Economy Billions Of Dollars

Despite improvements in air quality, the economic impact of air pollution in China costs billions of dollars in health care, report researchers from MIT.

The new study shows that the economic impact from ozone and particulates in the air in China has increased.

The study analyzed the costs associated with health impacts from ozone and particulate matter, which can lead to respiratory and cardiovascular diseases.

It was found that, after quantifying costs from both lost labor and the increased need for health care, this air pollution cost the Chinese economy $112 billion in 2005.  This is compared to $22 billion in similar damages in 1975.

“The results clearly indicate that ozone and particulate matter have substantially impacted the Chinese economy over the past 30 years,” Noelle Selin, an assistant professor of engineering systems and atmospheric chemistry at MIT, said in a press release.

The team found two main causes for the increase in pollution costs, including rapid urbanization in the conduction with population growth, and higher incomes raised costs associated with lost productivity.

“This suggests that conventional, static methods that neglect the cumulative impact of pollution-caused welfare damage or other market distortions substantially underestimate pollution’s health costs, particularly in fast-growing economies like China,” Kyung-Min Nam, one of the study´s authors, said in a press release.

Nam said pollution led to a $64 billion loss in gross domestic product in 1995 in China.  Static estimates from the World Bank found the loss was only $34 billion.

Selin said that the study represents a more accurate picture than other studies that have attempted to find the same associations.

“This important study confirms earlier estimates of major damages to the Chinese economy from air pollution, and in fact, finds that the damages are even greater than previously thought,” according to Kelly Sims Gallagher, an associate professor of energy and environmental policy at Tufts University´s Fletcher School.

The team calculated the long-term impacts using atmospheric modeling tools and comprehensive global economic modeling.

They said these models were especially important when it came to assessing the cumulative impact of ozone, which China has recently started to monitor.  The researchers simulated historical ozone levels by using these models.

China’s particulate-matter concentrations were at least 10 to 16 times higher than the World Health Organization’s annual guidelines in the 1980s.

The concentrations in 2005 were still five times higher than what is considered safe, despite making significant improvements.

According to 2007 World Health Organization estimates, these high levels of pollution have led to 656,000 premature deaths in China each year from ailments caused by indoor and outdoor air pollution.

“The study is evidence that more stringent air-pollution control measures may be warranted in China,” Gallagher said.

China is trying to respond to these health and economic problems, including a January move to limit its carbon intensity by 17 percent by 2015.

The China Energy and Climate Project will analyze the impact of existing and proposed energy and climate policies in China on technology, energy use, the environment and economic welfare.

The study appears in the February edition of the journal Global Environmental Change.

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