The Price of Pollution, – And the Value of health.

Article for China Healthcare Innovation magazine March 2007-03-13

Werner Christie, MD,  

Environmental pollution is a big challenge in the modern world. We have promoted economic growth and the increasing profits of industries and enterprises, but not taken into account the “external”  costs they inflict on our common capital and resource, the environment. The environment is a vital basis for our vigour and wellbeing. It provides us with the most basic resources for our livelihood, air and water. Without it no organism can survive.  These two resources are also the two who suffers most from the polluting practices of modern societies.

Air and water pollution is the two most serious damages inflicted on our common basis for existence. It reduces the growth of plants, fish and animals through polluted waters, acid rain, soot and gases in the air we breathe. In addition it is aslo altering the climate. Most importantly it afflicts the health of young and old through infections from unclean water, lung diseases from polluted air and probably cancers and other diseases from both. The changing climate also create a number of problems for both the environment and human health, including drought and hunger, floods, drowning, disease, storms and accidents.

Environmental health is a relatively new and emerging field of science, even if it has long historical roots back to pioneers such as Rudolf Virchow, the father of public health. Environmental health is the part of public health analyzing to the relationship between the environment and the health of humans. “Public Health” is the study of the health of the population and its relationship to the environment at large. Public health concerns the health of groups of the population in different local commiunities or larger communities.We then speak of community health profiles. It is important for health administrators or professionals responsible for groups of the population in different parts of a country to know their burden of diseases, Public health also relates to different cohorts of the population such as age groups, professional groups with specific occupational health risks, or groups with specific environmental hazards or health risks.

On March 2nd this year a very interesting report was submitted and discussed at an important conference about environmental health that took place in Beijing. It presented the results of a broad collaborative research effort completed by an international team of experts from China, Norway, a number of other countries as well as the World Bank.  The work was supported by funding from the World Bank, Finland and Norway.

The study is a multidisciplinary and complex scientific cooperation. It bridges the subjects of environmental science, epidemiology and public health as well as macro economy. On the basis of environmental statistics about the pollution levels of air and water for different substances, it calculates the health impact on the population in different cities and regions in China. The comparison of pollution and disease statistics makes it possible to infer how much of the burden of disease and death can be attributed to different types of air and water pollution for different cities and regions.

Then a radical and not very common step is introduced into the research: The value of these lost years of health or years of life is transformed into their economic cost in RMB. This may sound unusual and almost unethical, but on the contrary, it makes it possible for us to compare the payoff of investment in environmental and health measures for the first time. That is very important for these issues to be taken seriously in the modern economically focused world: Only what is counted counts, and only what pays off is paid for.

The value of life and health is calculated with two different approaches. One is the “Adjusted human capital” approach where only the productivity loss related to premature death and disease is estimated on the basis of lost earnings. The other method is the so called “Willingness to pay” approach, where the cost related to loss of health and life years is related to how much people indicate to pay to have it restored to normal. Here also our subjective loss of wellbeing and how much we price life and existence as such is taken into account.

According to the first approach the cost of disease and premature death related environmental degradation of air and water is calculated to 2.68 % of the GDP or 362 billion RMB. According to the willingness to pay method, the consequences of air and water pollution can be calculated to 781 billion RMB or 5.78 % of GDP. These are very high numbers, and they do not include all types of air and water pollution, nor other types of pollution. Neither do they include the non-health costs of pollution. The cost of other causes of ill health and premature death comes in addition to these figures. The numbers are not surprising nor dramatically high. They just confirm the simple fact we all know: A long and healthy life is the primary wish for all, and the most precious value we have. Few other values, if any, can compare or compensate for the loss of these.’

Similar numbers could – and should – be calculated be calculated for many other locations in the world.  China deserves commends and applause for pioneering this kind of advanced, complex and broad research with its international partners.

In a former article   I discussed the lack of macroeconomic interest for the value of health. This research and report from China proves it is possible, useful and necessary to look at the “external costs” of growth and development in the modern world. It also shows that it will pay off to invest in the environment and health care for all. If not, people may continue “Dying for growth” as documented in the book with the same title from the Institute for Health and Social Justice at Harvard University.