8 Why is there pollution and what can we do about it?
8 Why is there pollution and what can we do about it?
Caroline Krafft
Global impact of pollution
Pollution has enormous costs for society. Diseases caused by pollution reduce the GDP of developing countries by as much as 2% per year.[1] Pollution contributes to almost 7% of health costs in developing countries and 2% in developed countries. According to one estimate, damages from pollution cost $4.6 trillion dollars per year, around 6% of global GDP.
Pollution takes a toll in terms of human lives and disproportionately affects children, lower income countries, minorities, and other marginalized groups. In 2015 alone, nine million people died prematurely due to pollution.[2] In the same year, deaths due to pollution were 16% of all deaths worldwide. The role of pollution in global mortality was triple that of malaria, AIDS, and tuberculosis combined. Pollution killed 15 times more people than war and violence.
Why is there so much pollution, doing so much harm across the globe? What can we do to reduce pollution? This chapter investigates the causes of pollution through an economic lens and evaluates a variety of policy options for reducing pollution. One of the challenges in addressing pollution is that it does not respect local, state, or national boundaries. Pollution is a global problem; this chapter also discusses the global policies and institutions to address pollution.
Pollution imposes costs on society
Pollution can take a variety of forms. It can be the release of harmful substances into the air, the water, or the soil. It can occur in food, in buildings (for instance, through mold), or in the form of energy. Pollution can take the form of light, heat, or noise. Noise pollution from ambient noise, such as traffic, affects children’s ability to learn.[3] Pollution can have negative effects on humans directly, such as when they breathe in sooty air, or indirectly, when pollutants damage our forests. Pollution imposes a cost on society, either directly or indirectly.
A helpful framework for thinking about the impacts of pollution when they are indirect or on the environment is the idea of environmental services (also sometimes called ecosystem services), the contributions of ecosystems to people’s wellbeing. For example, wetlands provide services by cleaning our water and preventing flooding. Trees help dissipate rain, absorb carbon dioxide and produce oxygen. Pollution damages or destroys these environmental services, depriving society of their valuable functions.
Pollution as an externality in production
We can model pollution as a cost to society by returning to our concept of an externality. When examining education, we focused on how, when children “consumed” education, there were positive spillovers to society. This was a positive externality in consumption. The marginal social benefit (MSB) was greater than the marginal private benefit (MPB). Now we will apply a similar concept to pollution. Pollution is typically generated through t