Air quality

Air pollution is the world’s leading environmental health risk and a major cause of environmental degradation. Atmospheric pollutants from energy transformation and energy consumption, and from industrial processes, are the main contributors to regional and local air pollution. Major concerns relate to their effects on human health and ecosystems. Human exposure is particularly high in urban areas where economic activities are concentrated and where demand for mobility is highest. Degraded air quality can have substantial economic and social consequences, from health costs and a lower quality of life to infrastructure maintenance, reduced agricultural output and forest damage. Some population groups are especially vulnerable to air pollution. The very young and the very old are the most at risk.

In the atmosphere, emissions of sulphur and nitrogen are transformed into acidifying substances such as sulphuric and nitric acid. When these substances reach the ground, acidification of soil, water and buildings occurs which cause severe environmental damage. Nitrogen oxides (NOx) also contribute to the formation of ground-level ozone (that is effectively and greenhouse gas) and are responsible for eutrophication, reduction in water quality and species richness. They are associated with adverse effects on human health because high concentrations cause respiratory diseases.

Fine particulate matter (PM2.5), is another serious pollutant globally from a human health perspective. Chronic exposure even to moderate levels of PM2.5 substantially increases the risk of heart disease and stroke, the leading causes of death in OECD countries. It also increases the risk of respiratory diseases, including lung cancer, chronic obstructive pulmonary disease and respiratory infections. Black carbon, a major component of PM2.5, accelerates global warming and fosters snowmelt. Emissions from transport, industry, electricity generation, agriculture and domestic (household) sources are the main contributors to outdoor air pollution.

The main challenges are to further reduce emissions of local and regional air pollutants, to achieve a strong decoupling of emissions from economic growth and limit people’s exposure to polluted air. This implies implementing effective pollution prevention and control policies and sustainable transport and mobility policies.

  • Emissions can be reduced by substituting dirty fuels for cleaner ones, focusing development on cleaner industries, reducing consumption of polluting products and adopting cleaner technologies. Behavioural and lifestyle changes are also important.

  • Policies that provide incentives across a broad spectrum of firms and consumers (e.g. emission or energy taxes) tend to be more cost-efficient than those that target a specific product, fuel or technology (e.g. subsidies for electric cars).

  • Both the sources of air pollution and severity of exposure vary across and within countries. Hence it is important to tailor policies to specific local circumstances. For example, more stringent measures are required in densely populated areas or for emission sources located upwind from urban areas. Such spatially heterogeneous policies help achieve environmental objectives at lower costs than measures that apply uniformly to sources in all locations and to populations at all risk levels.

Environmental performance can be assessed against domestic objectives and international commitments. Reducing negative impacts of degraded air quality is part of the 2030 Agenda for Sustainable Development (New York, September 2015) under Goal 3 “Ensure healthy lives and promote well-being for all at all ages” and under Goal 11 “Make cities and human settlements inclusive, safe, resilient and sustainable”.

In Europe and North America, acidification has led to several international agreements among which the Convention on Long-Range Transboundary Air Pollution (1979), and its eight protocols to reduce emissions of sulphur (Helsinki 1985, Oslo 1994, Gothenburg 1999), nitrogen oxides (Sofia 1988, Gothenburg 1999), volatile organic compounds (Geneva 1991, Gothenburg 1999), and ammonia (Gothenburg 1999). The 2012 amendment of the Gothenburg protocol establishes legally binding emissions reduction commitments for 2020 and beyond for the major air pollutants: sulphur dioxide (SO2), nitrogen oxides (NOX), ammonia (NH3), volatile organic compounds (VOCs) and fine Particulate Matter (PM2.5). It specifically includes the short-lived climate pollutant black carbon (or soot) as a component of particular matter. Reducing particulate matter through the implementation of the Protocol is thus a major step in reducing air pollution, while at the same time facilitating climate co-benefits. Two other protocols aim at reducing emissions of heavy metals (Aarhus 1998) and persistent organic pollutants (Aarhus 1998).

Progress can be assessed by measuring the evolution of emissions, the exposure of population to air pollutants, the related health effects and their costs, and the evolution of policy stringency directed at pricing air pollution. The costs of air pollution mainly arise from its detrimental impact on human health. These take the form of shorter life expectancy, increased healthcare costs and reduced labour productivity. Further consequences include reduced agricultural output and damage to ecosystems and built structures.

  • Pollutant emissions and intensities: fine particulates (PM2.5), nitrogen oxide (NOx) and sulphur oxide (SOx).

  • Air quality and health: population exposure to fine particulates (PM2.5), mortality from PM2.5 and welfare cost of PM2.5 mortality.

  • Taxes relevant for air pollution abatement: revenue raised and tax base structure.

  • In most OECD countries, PM2.5 emission levels and intensities are steadily decreasing since 2000 thanks to optimised combustion processes, a decrease of solid fuels in energy mix, and lower emissions from transport and agriculture.

  • Compared to 2000, SOx emissions have continued to decrease for the OECD as a whole.

  • NOx emissions have also decreased in the OECD overall since 2000, but less than SOx emissions.

  • By 2018, almost all OECD countries reached their SOx and NOx emission targets for 2020.

In most OECD countries, PM2.5 emission levels and intensities are steadily decreasing since 2000. These improvements can be attributed to optimised combustion processes (in industries and households heating), a decrease of solid fuels (e.g. coal) in energy mix, and lower emissions from transport and agriculture. However, in large countries (e.g. Canada, United States), emission levels and intensities remain high due to large construction sites, unpaved roads, fields and smokestacks or fire. Most particles form in the atmosphere as a result of complex reactions of chemicals such as SOx and NOx, which are emitted from power plants, industries and automobiles.

Compared to 2000, SOx emissions have continued to decrease for the OECD as a whole as a combined result of changes in energy demand through energy savings and fuel substitution, pollution control policies and technical progress. All countries reached the goal they fixed under the Gothenburg protocol for 2010.

NOx emissions have also decreased in the OECD overall since 2000, but less than SOx emissions. This was mainly due to changes in energy demand, pollution control policies and technical progress. In the late 2000s, the slowdown in economic activity following the 2008 economic crisis further contributed to reduce emissions. However, these results have not compensated in all countries for steady growth in road traffic, fossil fuel use and other activities generating NOx. Several countries attained the emission ceilings of the Gothenburg Protocol for 2010, but other countries had difficulties in doing so.

By 2018, most OECD countries are expected to reach their SOx and NOx emission targets for 2020. In few countries reaching NOx emission targets remains a challenge.

Emission intensities per capita and per unit of GDP show significant variations among OECD countries. Almost all OECD countries have achieved a strong decoupling from economic growth since 2000. High levels and rise of NOx emissions in Australia are due to industrial combustion, power stations and growing vehicle ownership.

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International data on emissions are available for almost all OECD countries. The details of estimation methods for emissions such as emission factors and reliability, extent of sources and pollutants included in estimation, etc., may differ from one country to another. The high emission levels of SOX for Iceland are due to H2S emissions from geothermal power plants (expressed as SO2). The high emission levels of PM2.5 for Canada is due to dust from construction operations and unpaved and paved roads (around 60% of total emissions in 2018). OECD totals do not include Chile and Mexico.

For further details see the metadata in the source databases listed under Sources below.

  • Despite some progress, exposure to fine particulate matter (PM2.5) remains high. Mean population exposure to PM2.5 across the OECD has generally decreased, however exposure remains above the WHO guideline of 10 μg/m3 in around half of members.

  • Premature deaths attributed to ambient PM2.5 exposure have increased worldwide but declined in the OECD area. Among OECD members, Central and East European countries and Turkey have the highest rates of attributed deaths.

  • The welfare costs associated to PM2.5 pollution represent about 2.4% of GDP equivalent on average in the OECD area, compared to about 5.8% worldwide. They have decreased in almost all OECD countries while they have increased in the rest of the world.

Despite some progress, exposure to ambient fine particulate matter (PM2.5) remains high. Mean population exposure to fine particulate matter has generally decreased across the OECD; however, half of member countries still exceed the WHO guideline of 10 μg/m3. Elsewhere in the world, exposure is persistently high and levels are exceptionally severe in some countries in Asia, the Middle East and Africa.

Premature deaths attributed to PM2.5 exposure have consistently increased worldwide however they have decreased across the OECD. Among OECD members, Czech Republic, Greece, Hungary, Latvia, Poland, and Slovak Republic have the most attributed deaths relative to population, with more than 500 per million inhabitants each year.

In OECD countries, associated welfare costs of premature deaths due to PM2.5 pollution, represent on average about 2.4% of GDP equivalent (compared to about 5.8% worldwide). They have decreased in almost all OECD countries while they have increased in the rest of the world. The welfare costs associated with PM2.5 pollution are higher in Europe than in other OECD regions.

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International data on particulate emissions are available for many but not all OECD countries. The estimation methods for emissions, the extent of sources and particles included in estimation, may differ from one country to another.

Exposure indicators provide only a partial view of air pollution severity and consequences aggregated across the entire population. Importantly, there is generally no “safe level” of exposure for many pollutants. Even where guideline or target exposures are met, substantial public health and economic benefits can be realised through further improvements in air quality. Better estimates are needed for exposure to both outdoor and indoor air pollution. Particular attention should be paid to exposure of sensitive groups and quantitative impact on human health (and associated distributional and equity issues). Although many important gaps remain, available data are improving.

For further details see the metadata in the source databases listed under Sources below.

  • In the OECD area, air pollution-related taxes raised USD 704 billion in 2018, representing a large percentage of environmentally related tax revenue (81%).

  • Revenue from air pollution-related taxes is raised primarily from taxing energy and transport, while pollution and resource tax bases play a minor role in generating revenue.

  • Overall, the share of environmentally related tax revenue (ERTR) continues to decline in OECD countries, amounting to 5.2% of total tax revenue in 2019, down from 6.1% in early 2000s. Compared to GDP, ERTR is also decreasing and reached 1.5% of GDP in 2019.

In the OECD area, air pollution taxes raised USD 704 billion in 2018, representing a large percentage of environmentally related tax revenue (81%). This is down from 85% in 2000. The revenue from taxes directed at air pollution is raised from taxing energy (77%), in particular motor fuels, and transport (21%), while pollution and resource tax bases play a minor role in generating revenue.

Overall, the share of environmentally related tax revenue (ERTR) continues to decline in OECD countries, amounting to 5.2% of total tax revenue in 2019, down from 6.1% in early 2000s. Compared to GDP, ERTR is also decreasing and reached 1.5% of GDP in 2019. The decreasing trend is a combination of factors, namely, that tax rates are typically defined in physical units (e.g. per litre) and hence are set in nominal terms. Without inflation adjustment, these rates decrease in real terms over time. While countries such as Denmark, the Netherlands and Sweden have implemented such adjustments, most OECD countries do not yet apply inflation adjustments to environmentally related taxes. Another factor contributing to this trend is the increase in crude oil prices up until mid-2014, which triggered substitution away from motor fuel use, also making adjustments in nominal tax rates on motor fuels politically difficult. Yet some countries, such as Slovenia, Costa Rica, Turkey and Estonia strengthened the role of environmentally related taxes and have tripled their share of tax revenue since 2000.

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The indicators on environmentally related taxes should not be used to assess the “environmental friendliness” of the tax systems. For such analysis, additional information, describing the economic and taxation structure of each country, is required. Moreover, a number of environmentally related taxes can have important environmental impacts even if they raise little (or no) revenue. In addition, revenue from fees and charges, and from royalties related to resource management, is not included.

Comparisons of ERTRs in OECD countries provide a useful starting point for analysing the impact of environmental taxation, however, comparing only the levels of revenue does not provide the full picture of a country’s environmental policy, as it does not provide information on the levels of tax rates or the exemptions applied. Other parts of the OECD PINE database, including information on tax rates and exemptions, allows deeper assessment of the environmental impacts of these taxes. In addition, governments may choose to implement environmental policy using a range of other instruments, including fees and charges, expenditures (both direct and subsidies) and regulation, some of which are also detailed in the PINE database (see http://oe.cd/pine for information on the use of alternative instruments in countries).

For further details see the metadata in the source databases listed under Data sources below.

OECD, "Air and climate: Air emissions by source", OECD Environment Statistics (database), https://doi.org/10.1787/data-00598-en.

OECD, "Air quality and health: Mortality and welfare cost from exposure to air pollution", OECD Environment Statistics (database), https://doi.org/10.1787/c14fb169-en.

OECD, "Environmentally related tax revenue", OECD Environment Statistics (database), http://stats.oecd.org/Index.aspx?DataSetCode=ERTR

OECD, “Policy Instruments for the Environment (PINE)” (database), http://oe.cd/pine

References and further reading

OECD Data Portal, https://data.oecd.org/environment.htm.

European Monitoring and Evaluation Programme, https://www.emep.int/index.html.

GBD (2017), "Global Burden of Disease Study 2017 Results", Institute for Health Metrics and Evaluation, Seattle, United States, http://ghdx.healthdata.org/gbd-results-tool.

Mackie, A., I. Haščič and M. Cárdenas Rodríguez (2016), "Population Exposure to Fine Particles: Methodology and Results for OECD and G20 Countries", OECD Green Growth Papers, No. 2016/02, OECD Publishing, Paris. http://dx.doi.org/10.1787/5jlsqs8g1t9r-en.

OECD (2019), Revenue Statistics 2019, OECD Publishing, Paris, https://doi.org/10.1787/0bbc27da-en

Roy, R. and N. Braathen (2017), "The Rising Cost of Ambient Air Pollution thus far in the 21st Century: Results from the BRIICS and the OECD Countries", OECD Environment Working Papers, No. 124, OECD Publishing, Paris, https://doi.org/10.1787/d1b2b844-en.

United Nations Framework Convention on Climate Change, https://unfccc.int/.

UNECE, “Convention on Long-Range Transboundary Air Pollution”, https://www.unece.org/env/lrtap/multi_h1.html.

WHO Guidelines for Air Quality, https://www.who.int/airpollution/guidelines/en/.

OECD, "Environment at a Glance: Air quality", Environment at a Glance: Indicators, http://www.oecd.org/environment/env-at-a-glance.

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