Air Pollution and Global Economies

In an earlier post today my colleague, Jeff Payne, made the strong case that while the historically bad air pollution in Beijing is continued proof of China’s economic growth, the country’s economy has a number of fundamental weaknesses. Yet, it struck me that Jeff’s argument is only made stronger when one considers that the pollution itself is an economic weakness.

Since the 1970s, scientists and economists have predicted that the negative effects of air pollution would take a serious toll on the global economy.  Most of these kinds of studies focus on the health care costs that result from humans breathing highly polluted air. One 2008 state by Cal State Fullerton, for instance, estimated  that air pollution cost the State of California alone $28 billion per year. Additionally, studies show that air pollution is linked to lower productivity rates and a whole slew of debilitating conditions that can affect the output of a country’s citizenry.

It’s not difficult to imagine that China’s air pollution is certainly hampering its economy. In fact, a study from MIT showed that China lost $112 billion in 2005 to the effects of air pollution, a significant sum even for the world’s fastest growing economy.

It’s hard to image that the technologies and practices needed to limit the damage caused by air pollution are so exorbitantly expensive that this $112 billion hit is worth it, so the choice to take it is extremely shortsighted as population growth threatens to increase these costs exponentially. Unfortunately its one that developing economies (and even some developed ones) are all too willing to take. Indeed, one look at Time Magazine’s most polluted places on earth indicates that the wealth China and India are generating comes with a heavy ecological toll.

This is not to say that high levels of air pollution will cause the economy of China, India, or any other country to collapse. Yet, it is not difficult for one to see how ignoring the costs of air pollution – or any other type of pollution for that matter – could conspire with other issues to cause serious structural damage to the global economy.

Please note that the views expressed in this piece do not represent the official policy or position of the National Defense University, the Department of Defense, or the U.S. government.



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