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Economic Impacts from PM2.5 Pollution-Related Health Effects: A Case Study in Shanghai

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journal contribution
posted on 10.04.2017, 00:00 by Rui Wu, Hancheng Dai, Yong Geng, Yang Xie, Toshihiko Masui, Zhiqing Liu, Yiying Qian
PM2.5 pollution-related diseases cause additional medical expenses and work time loss, leading to macroeconomic impact in high PM2.5 concentration areas. Previous economic impact assessments of air pollution focused on benefits from environmental regulations while ignoring climate policies. In this study, we examine the health and economic impacts from PM2.5 pollution under various air pollution control strategies and climate policies scenarios in the megacity of Shanghai. The estimation adopts an integrated model combining a Greenhouse Gas and Air Pollution Interactions and Synergies (GAINS) model, exposure-response functions (ERFs), and a computable general equilibrium (CGE) model. The results show that without control measures, Shanghai’s mortality caused by PM2.5 pollution are estimated to be 192 400 cases in 2030 and the work time loss to be 72.1 h/cap annually. The corresponding GDP values and welfare losses would be approximately 2.26% and 3.14%, respectively. With an estimated control cost of 0.76% of local GDP, Shanghai would gain approximately 1.01% of local GDP through local air pollution control measures and climate policies. Furthermore, the application of multiregional integrated control strategies in neighboring provinces would be the most effective in reducing PM2.5 concentration in Shanghai, leading to only 0.34% of GDP loss. At the sectoral level, labor-intensive sectors suffer more output loss from PM2.5 pollution. Sectors with the highest control costs include power generation, iron and steel, and transport. The results indicate that the combination of multiregional integrated air pollution control strategies and climate policies would be cost-beneficial for Shanghai.