The cost of air pollution

www.oecd.org/environment/cost-of-air-pollution.htm

Outdoor air pollution kills more than 3.5 million people

across the world every year, and causes health problems,

from asthma to heart disease, for many more. This is

costing OECD societies plus China and India an estimated

USD 3.5 trillion a year in terms of the value of lives lost and

ill health, and the trend is rising. But how much of the cost

of those deaths and health problems is due to pollution

from cars, trucks and motorcycles on our roads? Initial

evidence suggests that in OECD countries, road transport is

likely responsible for about half the USD 1.7 trillion total.

Based on extensive new epidemiological evidence since the

2010 Global Burden of Disease study, and OECD estimates of

the Value of Statistical Life, The Cost of Air Pollution provides

evidence that the health impacts of air pollution are about

four times greater than previously estimated and the

economic costs much higher than previously thought.

These Highlights outline the key messages in the report.

policy highlights

Health impacts of road transport

Outdoor air pollution kills more than 3.5 million people a year globally, far more than was previously estimated, according to new data collected under the auspices of the World Health Organization.

Air pollution has now become the biggest environmental cause of premature death, overtaking poor sanitation and a lack of clean drinking water. In most OECD countries, the death toll from heart and lung diseases caused by air pollution is much higher than from traffic accidents.

Building on this analysis, the OECD has estimated that people in its member countries would be willing to pay USD 1.6 trillion to avoid deaths caused by air pollution. In OECD countries, road transport is likely responsible for about half of this.

Air pollution from all sources has fallen in many though not all, OECD countries in recent years, helped by stricter policies on emissions from vehicles. However, this has been offset by the switch to more polluting diesel vehicles. Emissions are increasing in China and India, because rapid growth in traffic is outpacing the adoption of tighter controls on emissions from vehicles.

Main recommendations

• Remove any incentives for the purchase of diesel cars over gasoline cars.

• Maintain and tighten regulatory regimes, in particular vehicle standards regimes such as those currently in place in the European Union. Make test-cycle emissions more similar to the emissions the vehicles cause under normal use.

• Promote less-polluting forms of transport, including improved public transport.

• Continue the research on the cost of illness caused by air pollution and on the specific evidence linking it to road transport.

• Mitigate the impact of air pollution on vulnerable groups, such as the young and the old.

The cost of air pollutionHealth impacts of road tranport

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WHO's GDB 2000study, 2000 data

OECDEnvironmental

Outlook to 2050,2010 data

WHO's GDB 2010study, 2010 data

WHO's GDB 2012study, 2012 data

PM (2005) PM (2010) Ozone PM+ ozone

Ischaemic heart disease

Heart strokes

Chronic obstructivepulmonary disease

Lung cancer

Acute lower respiratoryinfections in children

11%

3%

particulate matter is a complex mixture of sulfate, nitrates,

ammonia, sodium chloride, black carbon, mineral dust and

water, suspended in the air. PM10

has a diameter of 10 microns

or less, small enough to penetrate and lodge deep inside the

lungs. PM2.5

has a diameter of 2.5 microns or less, and can spread

even further in the body.

Nitrogen oxides (Nox) are emitted by vehicles and industry.

They react with sunlight to produce ozone. Excessive ozone in

the air can cause breathing problems, trigger asthma, reduce

lung function and cause lung disease. It includes nitrogen

dioxide (NO2), a toxic gas emitted by combustion processes

(heating, power generation, vehicles engines), linked to

bronchitis in asthmatic children and reduced lung function

growth.

Euro 4, Euro 5 (2009), and the forthcoming Euro 6 (2014)

are European emissions standards for motor vehicles and

replacement parts. The Euro emission limits regulate how

much specific pollutants, such as NOx, may be emitted by a

car when it is tested under laboratory conditions and using a

specific driving cycle. Diesel vehicles in the EU under the Euro

5 standard are allowed a NOx emission level that is more than

three times as high as for gasoline vehicles. Although emission

standards as measured under test conditions have decreased

over time, recent research suggests that actual, on-road NOx

emissions from diesel vehicles did not change during the last

decade.

Adapted from WHO, 2014 and ICCT.org.

Note: The Cost of Air Pollution is based on mortality figures from the GBD 2010 study. WHO has later on published 2012 data that indicate that mortalities from outdoor air pollution are still increasing.

Source : WHO, 2014

40%

40%

6%

oEcD : THE COST Of AIr POllUTION

Some 3.4 million deaths are attributed to ambient outdoor air pollution in 2010. The World Health

Organization released an updated number of 3.7 million

for 2012, emphasising the gravity and worsening of the

problem.

We now have more advanced monitoring technology for

measuring emissions and ambient concentrations of

pollutants, as well as a more comprehensive and rigorous

methodology for relating exposure to air pollutants with

mortality.

In OECD countries, the total number of deaths was reduced by 4% between 2005 and 2010. However,

progress has not been uniform. Mortalities fell in 20 OECD

countries, but increased in 14.

In China, deaths increased by about 5% in this period, and in India by 12%. China is home to one-fifth of the

world’s population but accounts for nearly two-fifths of

the global death toll linked to outdoor air pollution. India

has far fewer air pollution-related mortalities, but deaths

from ambient air pollution are rising more quickly.

Even when emissions have been reduced, the lagged effect

of past pollution often causes a continuing increase in the

global death toll.

Air pollution kills

figure 1: outdoor air pollution-caused deaths.

Breakdown by disease

WhAt’s thE mAttEr With pArticulAtE mAttEr ?

figure 2: Deaths caused by outdoor air pollution (in millions)

oEcD : THE COST Of AIr POllUTION

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20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

Low Mid High MTFR

EUR

milli

ons

per y

ear

Costs over baseline Benefits over baseline (With mean VSL)

A variety of sources are responsible for harmful air

pollutants and these vary among countries. In many

developing and emerging economies, small boilers are

important sources. Indoor air pollution from heating

and cooking is also a major cause of death, but this is

not considered in this analysis. Electricity generation,

industry and shipping (in coastal areas) can also

generate harmful air pollutants. However, in many

countries, road transport is a growing and sometimes

the major source of harmful air pollutants.

lOwEr EmISSIOnS pEr Car... but mOrE CarS.

Most countries have taken measures to reduce

pollution from vehicles. Much of the OECD world,

including the United States and the European

Union, has shown a downward trend in emissions of

pollutants due to vehicle emission standards.

In Europe, transport-specific emissions diminished

by 24% for PM10, by 27% for PM2.5 and by 31% for NOx

between 2002 and 2011 (EEA, 2013). This reduction is

largely due to the introduction of progressively tighter

emission limits for Euro 4 vehicles in 2005 and Euro

5 vehicles in 2009. Countries like China and India

have established relatively strict vehicle standards,

compared to other emerging and developing

countries. For example, the Euro 5 Standard was

adopted in Beijing in 2012. However, the rapid growth

in traffic has outpaced the adoption of tighter

emission limits. In many developing countries,

vehicle standards remain very weak.

ECOnOmIC grOwth brIngS a SOCIEtal DEmanD

fOr ClEan aIr, but it also brings a rise in vehicle

ownership and vehicle kilometres driven. Between

2008 and 2011, China’s car population effectively

doubled from around 50 million to around 100

million.

While in OECD countries there has been a downward

trend in emissions of pollutants from road transport

over the last two decades, this has been off-set

by a shift from less-polluting gasoline vehicles to

more-polluting diesel vehicles. The full impact of

air pollution occurs after a time lag. As a result,

mortalities have not fallen in line with the overall

decrease in air emissions. In much of the rest of the

world, the shift to diesel has reinforced the prevailing

upward trends in emissions. In India, this tendency

has been amplified by large subsidies for diesel.

DiEsEl vEhiclEs generate most of the harmful air

pollutants emitted by vehicles, as much as 80‑90%

in some countries. Although the technology is

improving, diesel still generates more harmful

pollutants than gasoline. In addition, the combustion

of one litre of diesel causes more CO2 emissions than

the combustion of one litre of gasoline.

In many countries, the majority of new cars entering

the market are diesel. One reason is that many

countries provide tax incentives to purchase diesel

cars. Switzerland, the UK and the US are the only

countries where taxes on diesel are higher than on

gasoline.

Taxes on motor vehicles in many countries also tend

to stimulate the purchase of diesel vehicles.

The provision of incentives for diesel is often justified

on the grounds that diesel vehicles are more efficient

than gasoline. This is true: you can drive more

kilometres per litre of diesel than gasoline. But drivers

will benefit from this efficiency anyway, so there is

no need to provide additional tax incentives. from an

environmental point of view, there is no reason why

diesel should be preferred over gasoline.

why InvESt ? With the Thematic Strategy on Air

Pollution, the European Union established objectives

for air pollution and proposes measures for achieving

them by 2030.

Its aim is to reinforce legislation on the most harmful

pollutants and to work with sectors that have an

impact on air pollution, including production of

energy and electricity, heating, transport, aviation and

agriculture.

Holland (2012) calculated the benefits of investing

in clean air (green bars) and compared them to the

costs (orange bars), with low-, mid-, high-policy

scenarios, and the maximum technically feasible

solution (MTFR). Net benefits are extraordinarily high,

encouraging governments to invest.

oEcD : THE COST Of AIr POllUTION

road transport is a growing source of air pollutants

Figure 3. cost-Benefit Analysis for the European thematic strategy on Air pollution

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DiD you KNoW…Switzerland, the UK and the US are

the only OECD countries where

taxes on diesel are higher than on

gasoline.

oEcD : THE COST Of AIr POllUTION

Source : adapted from Holland, 2012

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Currently, drivers pay to enjoy personal mobility,

but not for the damage they do to other peoples’

health. People are powerless to solve the problem

individually. Governments on the other hand know

that if they take action (e.g. via tighter emission

standards, higher fuel taxes), they will impose costs

on car manufacturers and drivers. But if they do not,

the “cost” of illness and premature death falls on the general population. So governments need some way

of weighing up both sets of costs.

The best way developed to date is to estimate the

monetary value of the well-being that people say

they would lose by dying early. Surveys are used to assess how much people would be willing to pay to reduce the risk, e.g. of death from air pollution. The

results are extrapolated to come up with something

called a “Value of a Statistical Life” (VSL). The VSL

multiplied by the estimated number of mortalities

gives an estimate of the consumption that people

would be willing to forgo to avoid all mortalities from

air pollution.

How much woud you pay to avoid health risks?

VSl estimates how much consumption people would be willing to give up to reduce the risk of dying from air pollution.

Estimates of VSl vary among countries: generally the richer the country, the more disposable income people have to reduce their risk of death from air pollution. As a result, the VSl in countries like China or India is lower than in OECD countries.

This does not mean that life is worth less in those countries, but rather that people are not able to pay more to reduce the risk of death.

For an interactive data visualisation,

country by country, and for more details, please visit

www.oecd.org/environment/cost-of-air-pollution.htm

Using this approach, the annual economic cost of

deaths from ambient air pollution was calculated. It increased by approximately 10% between 2005 and 2010 in OECD countries, to reach ≈ uSD 1.7 trillion

(a figure which includes an indicative estimate

for morbidity, i.e. the loss of good health). This is

equivalent to about half the total governmental

expenditure on health care services in OECD

countries in the same year.

In China, the cost increased by 90% over the same period, to reach about uSD 1.4 trillion for 2010. In

India, it reached ≈ USD 0.5 trillion.

A review of available information suggests that,

on average in OECD countries, road transport accounts for about 50% of the cost of air pollution.

In emerging economies such as China and India,

estimates are lower, because of the contribution from

other sources, but they still represent a significant

burden.

The OECD has estimated how much people in different countries would be willing to pay to avoid deaths caused

by air pollution. This is important because governments can use this information in setting the stringency of the

measures that should be applied to reduce pollution from the main sources of air pollution, including from vehicles.

The new estimates indicate that people are willing to pay much more for clean air than previously thought.

figure 4. cost of air pollution

oEcD : THE COST Of AIr POllUTION

WHy does tHe value oF statistical liFe vary

From country to country?

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$

the cost of air pollutionHealth impacts of road transport

www.oecd.org/environment/cost-of-air-pollution.htm

3.5 MILLIONPEOPLE KILLED A YEAR GLOBALLY BY OUTDOOR AIR POLLUTION * THAT’S MORE DEATHS THAN FROM DIRTY WATER AND POOR SANITATION

50% OF DEATHS FROM OUTDOOR AIR POLLUTION IN OECD CAUSED BY ROAD TRANSPORT *DIESEL VEHICLES THE BIGGEST CULPRIT

US$ 1.6 TRILLION VALUE OF PREMATURE DEATH BY OUTDOOR AIR POLLUTION IN OECD = ALMOST THE SIZE OF THE CANADIAN ECONOMY

$ £

rEfErEnCES

Bhaskan, K. et al. (2011), “The effects of hourly differences in air

pollution on the risk of myocardial infarction: case crossover

analysis of the MINAP database”, BMJ, 2011; 343:d5531,

http://dx.doi.org/10.1136/bmj.d5531.

European Environment Agency (EEA) (2013), Air Quality in

Europe – 2013 Report, Publications Office of the European Union,

Luxembourg.

Holland, M. (2012), Cost-benefit Analysis of Scenarios for Cost-

Effective Emission Controls after 2020, Version 1.02, November

2012, Corresponding to IIASA Thematic Strategy on Air Pollution

Report #7, EMRC.

IARC (2013), “IARC: Outdoor air pollution a leading cause of

cancer deaths”, Press Release 221, 17 October 2013, IARC, Lyon.

ICCT.org. “Laboratory versus real world: Discrepancies in NOx

emissions in the EU”, blog post by Peter Mock.

Institute for Health Metrics and Evaluation (2013a), The Global

Burden of Disease (GBD) Visualizations: GBD compare. Institute for

Health Metrics and Evaluation, Seattle.

Laumbach, R.J. and H.M. Kipen (2012), “Respiratory Health effects

of Air Pollution: Update on Biomass Smoke and Traffic Pollution”,

Journal of Allergy and Clinical Immunology, Vol. 129, pp. 3-13, http://

dx.doi.org/10.1016/j.jaci.2011.11.021.

Shah, A.S.V. et al. (2013), “Global Association of air pollution and

heart failure: A systematic review and meta-analysis”, The Lancet,

Vol. 382, pp. 1039-48.

World Health Organization, Ambient (outdoor) air quality and

health, Fact sheet N° 313, March 2014.

further reading

rElatED OECD publICatIOnS

Hunt, A. (2011), “Policy Interventions to Address Health

Impacts Associated with Air Pollution, Unsafe Water Supply

and Sanitation, and Hazardous Chemicals”, OECD Environment

Working Papers, No. 35, OECD Publishing.

http://dx.doi.org/10.1787/5kg9qx8dsx43-en.

OECD (forthcoming), The Diesel Differential: Differences In The Tax

Treatment Of Gasoline And Diesel For Road Use.

OECD (2013), Taxing Energy Use: A Graphical Analysis, OECD

Publishing. http://dx.doi.org/ 10.1787/9789264183933-en

OECD (2012), Mortality Risk Valuation in Environment, Health and

Transport Policies, OECD Publishing.

http://dx.doi.org/10.1787/9789264130807-en

OECD (2011), Environmental Impacts of International

Shipping: The Role of Ports, OECD Publishing. http://dx.doi.

org/10.1787/9789264097339-en

OECD (2010), Globalisation, Transport and the Environment, OECD

Publishing. http://dx.doi.org/10.1787/9789264072916-en

OECD (2009), A review of recent policy-relevant findings from the

environmental health literature, OECD, Paris.

Photo credits :©istockphoto.com plherrera, gyn9038, lazyday, millionhope, yenwen, Phototreat, ©shutterstock.com Andrey Yurlov, Photobank gallery.

Read the publication on the OECD library :http://dx.doi.org/ 10.1787/9789264210448-en

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