Economics of Pollution Reduction

A Pollution-Free Future Doesn’t Only
Save Lives

It will save money too. And a lot of it.

Air pollution is expensive. It causes disease, which results in health care costs. It causes people to miss work because they are sick, disabled, or need to care for an afflicted family member. And it kills people before their time, ending their ability to bring home a paycheck and impoverishing their families.

We know that pollution can be prevented. We have cleaned up the air and reduced air pollutant emissions in the United States by 74% since passage of the Clean Air Act in 1970 (1). In the process, we have prevented 2,300,000 premature deaths, 200,000 heart attacks, 135,000 hospital admissions, 17 million lost workdays, and 5.4 million lost school days (2).

But something that people do not always realize is that air pollution control is also highly cost-effective. It more than pays for itself.

The owners of polluting industries, like the fossil-fuel industry, do not like to be told to control pollution, because it costs them money and impacts their bottom line. But pollution control delivers enormous economic benefits to all the rest of us—especially our children—while it cleans the air, prevents disease, saves lives, and improves our environment.

Recent estimates find that every dollar invested in air pollution control since passage of the Clean Air Act has produced an economic benefit of $30: a return on investment of 30:1 (1). These benefits reflect the increased economic productivity of healthier, longer lived citizens and reduced health care costs. Cleaner air and a healthier economy go hand in hand (2).

This article will describe what PM_2.5 control can do for Massachusetts’ economy and how pollution control could be highly profitable.

Money Saved: Health Care Costs

Health care is expensive. In 2019, Massachusetts residents spent a whopping average of $8,912 per person on health care—more than 10% of median family income (3, 4). Because so much money is spent on health care, even a slight decrease in these expenditures can save Massachusetts residents a lot of money.

Each year, PM_2.5 air pollution is responsible for more than 2,000 cancer cases, 1,500 cases of heart disease, 200 strokes, and the birth of 300 underweight babies in Massachusetts (5). Treatment of patients with these conditions is very expensive. For example, treatment of a single cancer patient costs an average of $150,000 (6). So it’s easy to see how the costs of pollution-related diseases can pile up quickly.

The healthcare costs that result from pollution place a huge financial burden on Massachusetts residents, insurance companies, and governmental healthcare systems like Medicare and Medicaid.

It is much cheaper to stop air pollution at the source and prevent pollution-related diseases from occurring than to treat these diseases after people have already become sick (1).
 

Money Saved: Missing Workers

The costs of air pollution don’t stop at the hospital. There are large economic losses associated with people who cannot return or cannot return fully to the workforce. When people attend chemotherapy, develop asthma, or develop a chronic disease, they have to step back. This can mean missing family events, missing work, missing school, or not being able to care for a child. Taking these steps back have economic costs by either the individual or those around them having to take time off of work (1).

The costs of these absences from work and school that result from air pollution are so great that they can significantly hurt the economic productivity of the entire United States.
 

Money Saved: A Healthier Economy

On the positive side, pollution control can boost the economy, because it reduces health care costs and increases workers’ earning power and productivity. In fact, the national economic productivity of the United States – the Gross Domestic Product (the GDP) – has grown by 250% since we passed the Clean Air Act in 1970 (9). This increase took place in the same years that we reduced air pollution by 74% (10). Once again, we see that clean air and a healthy economy go hand in hand (2).

Money Saved: The Next Generation

Evidence is growing that PM_2.5 air pollution can cause brain damage in children. Air pollution exposures in early life decrease children’s IQ (Intelligence Quotient) and increase risk for behavioral disorders such as Attention-Deficit/Hyperactivity Disorder (ADHD) and autism (11, 12).

Pollution-related IQ loss caused by PM_2.5 pollution prevents individual children from attaining their full potential, because IQ scores are highly correlated with children’s academic performance, standardized test scores, and high-school graduation rates (7, 8). Pollution-related IQ losses also reduce children’s future income and earning potential and thus have economic consequences.

Pollution-related IQ losses in children across Massachusetts are important too, because reduction in the average IQ of thousands of Massachusetts children by as little as 2 points results in a significant decrease in the number of gifted children and a corresponding increase in the number with IQ scores below 70. Any increase in the number of children with IQ scores below 70 is significant because these children may experience a level of developmental delay that requires special education services and limits their capacity to live independently or to attain competitive employment.

Pollution-related IQ losses fall most heavily on children in Massachusetts’ most vulnerable communities where they can magnify the impacts of poverty, racism, psychosocial stress and other environmental hazards such as lead.

The good news is that IQ loss caused by PM_2.5 air pollution can be prevented. Prevention of pollution-related IQ loss benefits individual children improves the mental health of children across Massachusetts and boosts the economy.

The proof of this is seen in what happened in the United States in the 1970s when we eliminated air pollution caused by lead by removing lead from gasoline (13). In the 1970s more than 100,000 tons of lead were added to the US gasoline supply each year to improve engine performance. Airborne lead pollution was widespread and children’s blood lead levels were nearly 20 times higher than they are today. Pediatric researchers at Boston Children’s Hospital and the CDC realized from their research that this lead pollution was causing brain injury in children and reducing their IQ, even in children with no obvious symptoms of lead poisoning.

In response to these alarming findings, EPA ordered the removal of lead from automotive gasoline.

Over the next decade, American children’s blood lead levels fell by 95%. Lead poisoning, which had previously been common, became a rare disease. And the average IQ of every child born in the United States since 1980 increased by almost 5 points. 

Additionally, this increase in children’s IQ resulted in an enormous economic benefit. Because children with higher IQ scores are smarter, more creative and more economically productive, economists have estimated that each annual crop of babies born in the United States since 1980 has added 100 to 200 billion more dollars ($100-200 billion) to the economy over their lifetimes than if they had been exposed to lead in early life. An amazing success story!

And it is a success story that we can repeat if we have the political will and the courage to get PM_2.5 pollution out of the air in Massachusetts today. 

In Conclusion

Air pollution control is highly cost-effective. It reduces health care costs, maintains a healthy workforce, increases children’s intelligence, and prepares future generations to take the reins. For all these reasons, Massachusetts needs to control PM_2.5 pollution and move as rapidly as possible to a pollution-free economy based on clean energy.