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Health effects of ozone and particulate matter pollution in China: a province-level CGE analysis

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Abstract

In this study, we estimate the cost of PM2.5 and O3 pollution in China and explore how it differs by province. For the analysis, we extend the China Regional Energy Model—a computable general equilibrium model of the Chinese economy—to explicitly represent the pollution-health linkage within a larger economic system. Our results show that health damage from air pollution in China is substantially large. For each year between 2010 and 2030, China’s welfare loss from excess pollution is estimated to be 3.2–5.1% of the baseline level when welfare is measured as the sum of consumption and leisure. The PM2.5 share of the costs was > 13 times as large as the O3 share, and premature deaths from chronic exposure to PM2.5 were the single most important health endpoint, accounting for ≤ 56% of the total costs. Cross-regional heterogeneity is substantial, and populous and wealthy Eastern China is subject to particularly large health damage. When the size of provincial economies is controlled for, however, the dominance of the eastern region is less obvious and several inland provinces (e.g., Henan, Shanxi, and Chongqing) also suffer high pollution-health costs, due to low air quality and fast productivity growth. Finally, broader economic loss from inefficient resource allocation and its cumulative effects, which is often neglected in static analysis, accounts for > 29% of the total costs. Overlooking this cost component will, in particular, lead to substantial underestimation for China’s central and western regions, whose economies are growing fast.

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Fig. 1
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Source: Created from WRF/Chem-simulated data

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Source: Modified from Matus et al. (2008), p. 67 and Nam et al. (2010), p. 5061

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Source: Created from National Bureau of Statistics of China (2016)

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Notes

  1. PM is either directly emitted from anthropogenic and natural/biogenic sources or produced through complex gaseous reactions in the atmosphere, often involving sulfur dioxide (SO2), nitrogen oxides (NOx), volatile organic compounds (VOCs), and ammonia. In contrast, O3 is not directly emitted but is only formed through chemical reactions between NOx and VOCs in the presence of sunlight.

  2. See Zhang et al. (2013) for further technical details on a standard version of CREM.

  3. Leisure loss associated with AM, RHA, CHA, ERV, and OV is assumed to be 77%, 11%, 11%, 18%, and 18% of the total cost, respectively (Holland et al. 1999; Yang 2004).

  4. Throughout this paper, US$ refers to 2007 US$ unless stated otherwise.

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Acknowledgements

We acknowledge the financial support of the Hong Kong Research Grant Council (ECS Award No.: 27200915) and the National Natural Science Foundation of China (Project No.: 71690244). The authors would like to express our special thanks to Da Zhang and Xiaohan Zhang for their helpful comments and input.

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Authors and Affiliations

  1. Department of Urban Planning and Design, The University of Hong Kong, Pokfulam, Hong Kong, SAR, China

    Kyung-Min Nam

  2. Institute of Energy, Environment and Economy, Tsinghua University, Beijing, 100084, China

    Xu Zhang & Xiliang Zhang

  3. Environmental Analysis and Outcomes Division, Minnesota Pollution Control Agency, St Paul, MN, 55155, USA

    Min Zhong

  4. Department of Environmental Sciences, Emory University, Atlanta, GA, 30322, USA

    Min Zhong & Eri Saikawa

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Nam, KM., Zhang, X., Zhong, M. et al. Health effects of ozone and particulate matter pollution in China: a province-level CGE analysis. Ann Reg Sci 63, 269–293 (2019). https://doi.org/10.1007/s00168-019-00924-z

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