Can better technologies avoid all air pollution damages to the global economy?

Abstract

This paper assesses the potential role of the implementation of the best available technologies to reduce the economic consequences of outdoor air pollution in the coming decades. The paper focuses on market impacts related with additional health expenditures, changes in labour productivity and crop yield losses and also presents results on non-market costs, i.e. welfare losses from avoided premature deaths. The results show that technological improvements can potentially reduce concentrations of air pollutants to levels compatible with the WHO guidelines in most countries. However, technology measures can only reduce part of the economic costs relative with the market impacts. While those are efficient in reducing the direct costs of air pollution, there are still large indirect costs associated with current and remaining pollution levels. Policies that aim directly at avoiding economic impacts need to be implemented to further reduce air pollution damages, especially in the regions where technologies are not sufficient to reduce concentrations or where economic consequences persist despite reduced concentration levels.