The Impacts of Air Pollution on Health and Economy in Southeast Asia

Farhad Taghizadeh-Hesary,Farzad Taghizadeh-Hesary

doi:10.3390/en13071812

Farhad Taghizadeh-Hesary, Farzad Taghizadeh-Hesary

Open Access

https://doi.org/10.3390/en13071812

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Abstract

The accessibility of cheap fossil fuels, due to large government subsidies, promotes the accelerated gross domestic product (GDP) per capita growth in Southeast Asia. However, the ambient air pollution from fossil fuel combustion has a latent cost, which is the public health issues such as respiratory diseases, lung cancer, labor loss, and economic burden in the long-run. In Southeast Asia, lung cancer is the leading and second leading cause of cancer-related death in men, and women, respectively. This nexus study employs the panel vector error correction model (VECM) and panel generalized method of moments (GMM) using data from ten Southeast Asian countries from the period (2000–2016) to explore the possible association between emissions, lung cancer, and the economy. The results confirm that CO2 and PM2.5 are major risk factors for lung cancer in the region. Additionally, the increasing use of renewable energy and higher healthcare expenditure per capita tend to reduce the lung cancer prevalence. Governments specially in low oil price era, have to transfer subsidies from fossil fuels to renewable energy to create a healthy environment. Furthermore, cost creation for fossil fuel consumption through carbon taxation, especially in the power generation sector, is important to induce private sector investment in green energy projects.

Highlights

In 2015, both consumers and producers of fossil fuels, globally, received approximately USD 425 billion worth of subsidies via direct payments, tax breaks, loan guarantees, cheap rental of public land, or research and development (R&D) grants [1]
The dependent variable is cancer prevalence (CANCER), and we provide the short-run dynamics based on a panel vector error correction model (VECM), impulse response function (IRF), and variance decomposition
Fossil fuels receive large energy subsidies in Southeast Asian economies, reducing the price of fossil fuels, and encouraging greater production and consumption resulting in higher emissions

Summary

Introduction

In 2015, both consumers and producers of fossil fuels, globally, received approximately USD 425 billion worth of subsidies via direct payments, tax breaks, loan guarantees, cheap rental of public land, or research and development (R&D) grants [1]. As a result of these direct and indirect subsidies, the price that consumers pay for fossil fuels does not include the damages caused by climate change and air pollution. Providing subsidies for fossil fuel companies represents a loss of opportunity for governments, which are attempting to achieve the Sustainable Development Goals. The support provided to fossil fuel companies by the governments is estimated to be half the amount needed to plug the sustainable energy access finance gap, more than ten times the amount needed to bridge the basic education finance gap, more than 13 times the amount needed to close the basic health care gap; more than three times the subsidies to renewable energy, and more than 22 times the current finance of combating and mitigating climate change. Since the price at which fossil fuels are sold does not include environmental and health externalities and is reduced, it encourages further

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