Chapter 5 Economics of Pollution Interventions

Abstract

Interventions to reduce pollution have the potential to increase social welfare through improvements in health, social and economic outcomes. This potential has been shown in a range of economic analyses focusing on specific interventions. In this chapter we present evidence from studies focusing on the health impacts of environmental interventions that have been evaluated from an economic perspective. Overall, this body of evidence is strongly suggestive of beneficial welfare impacts from most interventions. However, there remains significant scope for expanding and strengthening the current evidence base in order to provide clearer guidance to policy makers in policy design and investment decisions. Salient points made in this chapter include: 1) England has successfully managed to “decouple” trends of economic growth and polluting emissions, achieving reductions in emissions of a large range of pollutants with an expanding economy. However, the detrimental health impacts of current levels of pollution are still large, as are the potential benefits of taking more incisive actions against pollution. 2) Economic analysis approaches typically applied in the appraisal of environmental interventions are at odds with those prevailing in the health care domain. A goldstandard economic evaluation approach in the area of environmental health interventions should take a societal perspective and aim at assessing overall impacts on social welfare. Available evidence neglecting these key components likely underestimates the net benefit of pollution reduction measures. 3) Research priorities should now include the evaluation of the societal benefits of measures to address pollution in order to justify economically beneficial interventions that reduce individuals’ pollution exposure or remove the source of emissions.