Can Economics Reduce Global Pollution Deaths?
On October 20, Maureen Cropper, Chair and Distinguished Professor at the University of Maryland Department of Economics, gave the 2016 Jon Goldstein Memorial Lecture on Economics and Environmental Policy. Drawing upon data from the Global Burden of Disease Study, Cropper explained how an economic approach can be used to identify cost-effective policy solutions that both benefit the environment and save lives.
Cropper emphasized that while deaths from traditional pollution problems, such as unsafe water, unsafe sanitation, and household air pollution have decreased, deaths from modern pollution problems, such as ambient particulate matter and ozone pollution, are on the rise. Last month, the Global Burden of Disease Study estimated that 15% of deaths worldwide can be attributed to pollution. Regardless of the type, pollution deaths have been concentrated within lower middle class countries - specifically, countries still relying on solid fuels for energy.
"Economists are very good at identifying the most cost-effective solution to a problem," said Cropper. For example, they are well-equipped to determine questions such as which intervention can reduce problems of unsafe water at the lowest cost per life saved. It would cost approximately $500 billion - the entire GDP of all low-income countries in 2015 - to provide piped water connections and latrines to those currently living with unsanitary water conditions. Home treatment, on the other hand, has a much lower cost per life saved, but it depends upon household behavior change. Economists are helping to determine whether the problem of adoption is one of price, credit constraints or lack of appreciation of health benefits. Further studies have examined how subsidies, micro-finance and vouchers can be best leveraged to improve outcomes.
Similarly, economists are calculating the private benefits, social benefits and social costs of replacing biomass cook stoves with gas stoves. Economists are studying which households use products effectively over time and how that information can be used to target subsidies.
Even more striking is the role economists have played in reducing ambient air pollution, an area that is much less dependent on behavioral changes. Environmental controls have been remarkably effective, but also very expensive. Economists have been able to quantify these benefits, many of which are health-related, leading to increased acceptance in the U.S. and other countries.
"Because resources are scarce, there will have to be some hard questions asked," concluded Cropper. "A lot of what economists can do in this case is conduct honest and accurate cost-benefit and cost-effectiveness analyses that look at real, sustained usage of interventions overtime." She believes economists are invaluable to issues of environmental policy because they have the tools to formulate efficient policies and assess their effectiveness in practice.
Each year, the Department of Economics and the Heller-Hurwicz Economics Institute host the Jon Goldstein Memorial Lecture to advance research at the intersection of economics and environmental policy. Jon Goldstein worked as an economist who devoted his life to improving the environment and reducing poverty. After earning his Ph.D. in Economics from the University of Minnesota in 1964, Goldstein went on to be a key contributor in the Social Security Administration, Department of the Interior, and the Endangered Species Committee.