Estimating health impacts and economic costs of air pollution in the Republic of Macedonia

Abstract

Aim: This paper assesses the magnitude of health impacts and economic costs of fine particulate matter (PM) air pollution in the Republic of Macedonia.

Methods: Ambient PM10 and PM2.5 monitoring data were combined with population characteristics and exposure-response functions to calculate the incidence of several health end-points known to be highly influenced by air pollution. Health impacts were converted to Disability-Adjusted Life Years (DALYs) and then translated into economic terms using three valuation approaches to form lower and higher bounds: the (adjusted) Human Capital Approach (HCA), Value of a Statistical Life (VSL) and the COI (cost of illness).

Results: Fine particulate matter frequently exceeds daily and annual limit values and
influences a person‟s day-to-day health and their ability to work. Converting lost years of life and disabilities into DALYs - these health effects represent an annual economic cost of approximately €253 million or 3.2% of GDP (midpoint estimate). Premature death accounts for over 90% of the total health burden since this represents a loss of total life-long income. A reduction of even 1μg/m3 in ambient PM10 or PM 2.5 would imply 195 fewer deaths and represent an economic savings of €34 million per year in reduced health costs.

Conclusion: Interventions that reduce ambient PM10 or PM2.5 have significant economic savings in both the short and long run. Currently, these benefits (costs) are „hidden‟ due to the lack of information linking air quality and health outcomes and translating this into economic terms. Policymakers seeking ways to improve the public‟s health and lessen the burden on the health system could focus on a narrow set of air pollution sources to achieve these goals.