Assessment of socioeconomic costs to China's air pollution

Particulate air pollution has had a significant impact on human health in China and it is associated with cardiovascular and respiratory diseases and high mortality and morbidity. These health impacts could be translated to reduced labor availability and time. This paper utilized a supply-driven input-output (I-O) model to estimate the monetary value of total output losses resulting from reduced working time caused by diseases related to air pollution across 30 Chinese provinces in 2007. Fine particulate matter (PM2.5) pollution was used as an indicator to assess impacts to health caused by air pollution. The developed I-O model is able to capture both direct economic costs and indirect cascading effects throughout inter-regional production supply chains and the indirect effects greatly outnumber the direct effects in most Chinese provinces. Our results show the total economic losses of 346.26 billion Yuan (approximately 1.1% of the national GDP) based on the number of affected Chinese employees (72 million out of a total labor population of 712 million) whose work time in years was reduced because of mortality, hospital admissions and outpatient visits due to diseases resulting from PM2.5 air pollution in 2007. The loss is almost the annual GDP of Vietnam in 2010. The proposed modelling approach provides an alternative method for health-cost measurement with additional insights on inter-industrial and inter-regional linkages along production supply chains.