The Economic Consequences of Outdoor Air Pollution

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This report provides a comprehensive assessment of the economic consequences of outdoor air pollution in the coming decades, focusing on the impacts on mortality, morbidity, and changes in crop yields as caused by high concentrations of pollutants. Unless more stringent policies are adopted, findings point to a significant increase in global emissions and concentrations of air pollutants, with severe impacts on human health and the environment. The market impacts of outdoor air pollution are projected to lead to significant economic costs, which are illustrated at the regional and sectoral levels, and to substantial annual global welfare costs.

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The links between outdoor air pollution and economic growth

This chapter first presents the main approaches used in the literature to assess the costs of inaction or benefits of action for air pollution. It then introduces the methodology used in this report to study the economic consequences of outdoor air pollution, using a general equilibrium model for market impacts and results of direct valuation studies for non-market impacts. The chapter also presents an overview of the main impacts of outdoor air pollution, including those related to human health and the environment. It then highlights which impacts and economic consequences are quantified in this report. The chapter ends with a description of possible policy approaches to address outdoor air pollution.

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