improper management of wastes,and other factors have elevated exposure.Exposure has increased most quickly in the developing countries of South Asia and East Asia and the Pacific, reaching 46 micrograms per cubic meter (ug/m3)and 42 ug/m3,respectively,or about three times the guideline value of 15 ug/m3 recommended by the World Health Organization (WHO)as the level below which adverse health effects have not yet been observed(Brauer etal.2016).2 Air pollution is not just a problem in cities.More than 2.8 billion people around the world continue to burn solid fuels such as wood,charcoal,coal,and dung in their homes for cooking and heating(Chafe et al.2014).Many of these people live in rural areas where they lack access to modern forms of energy such as electricity. The health risk posed by air pollution is greatest in developing countries.Low-and middle- income countries account for 80 percent of the world's population and for 93 percent of the deaths and nonfatal illness each year from air pollution.3 Air pollution is the third leading risk factor in these countries behind metabolic risks and dietary risks(figure 1.2).In upper- middle-income countries,as is the case globally,it is the fourth greatest risk factor.Children under age 5 in lower-income countries are more than 60 times as likely to die from exposure to air pollution as children in high-income countries,with the majority of these deaths attribut- able to household air pollution.Death rates attributable to air pollution exposure among people of all ages are highest in the lower-middle-income countries(GBD 2013 Collaborators 2015). Air pollution is not just a health risk;it is also an economic burden.By causing illness and premature death,pollution reduces quality of life.By causing a loss of productive labor,pollu- tion also reduces output and incomes in these countries.As will be shown in this report,the annual quality of life or welfare costs of air pollution in low-and middle-income countries are in the trillions of dollars,and lost income is in the hundreds of billions of dollars.The enor- mity of the costs stems from the widespread nature of exposure to air pollution.Around 87 percent of the world's population is living in areas where PM,concentrations exceed the WHO guideline value,and so every day billions of people are breathing polluted air and rais- ing their risk of succumbing to a pollution-caused illness.The economic costs associated with this elevated risk are a real drag on development. Apart from the sheer magnitude of the costs,the disproportionate impacts on the poorest segments of the population make air pollution a threat to shared and inclusive prosperity.The poor are more likely to live and work in polluted environments,but they are less able to avoid exposure or self-protect.In the United States,research dating back to the 1970s has docu- mented how toxic facilities and sources of air pollution have tended to be sited near poor minority communities.+Disparities in exposure continue to exist today in places such as the South Bronx in New York City,where nearly 40 percent of people live below the poverty line and where asthma rates are four times higher than the national average(Katz 2012).Similarly, in China large point sources of pollution such as heavy industry are increasingly moving from city centers to the suburbs,where migrant workers congregate,and from coastal metropolises to second-or third-tier cities and rural towns,where land is cheaper and monitoring by envi- ronmental protection authorities may be more lax(Ma and Schoolman 2011;Schoolman and Ma 2012;Zhao,Zhang,and Fan 2014;Zheng et al.2014a,2014b). 2 The Cost of Air Pollution:Strengthening the Economic Case for Action
2 The Cost of Air Pollution: Strengthening the Economic Case for Action improper management of wastes, and other factors have elevated exposure. Exposure has increased most quickly in the developing countries of South Asia and East Asia and the Pacific, reaching 46 micrograms per cubic meter (µg/m3 ) and 42 µg/m3 , respectively, or about three times the guideline value of 15 µg/m3 recommended by the World Health Organization (WHO) as the level below which adverse health effects have not yet been observed (Brauer et al. 2016). 2 Air pollution is not just a problem in cities. More than 2.8 billion people around the world continue to burn solid fuels such as wood, charcoal, coal, and dung in their homes for cooking and heating (Chafe et al. 2014).Many of these people live in rural areas where they lack access to modern forms of energy such as electricity. The health risk posed by air pollution is greatest in developing countries. Low- and middleincome countries account for 80 percent of the world’s population and for 93 percent of the deaths and nonfatal illness each year from air pollution. 3 Air pollution is the third leading risk factor in these countries behind metabolic risks and dietary risks (figure 1.2). In uppermiddle-income countries, as is the case globally, it is the fourth greatest risk factor. Children under age 5 in lower-income countries are more than 60 times as likely to die from exposure to air pollution as children in high-income countries, with the majority of these deaths attributable to household air pollution. Death rates attributable to air pollution exposure among people of all ages are highest in the lower-middle-income countries (GBD 2013 Collaborators 2015). Air pollution is not just a health risk; it is also an economic burden. By causing illness and premature death, pollution reduces quality of life. By causing a loss of productive labor, pollution also reduces output and incomes in these countries. As will be shown in this report, the annual quality of life or welfare costs of air pollution in low- and middle-income countries are in the trillions of dollars, and lost income is in the hundreds of billions of dollars. The enormity of the costs stems from the widespread nature of exposure to air pollution. Around 87 percent of the world’s population is living in areas where PM2.5 concentrations exceed the WHO guideline value, and so every day billions of people are breathing polluted air and raising their risk of succumbing to a pollution-caused illness. The economic costs associated with this elevated risk are a real drag on development. Apart from the sheer magnitude of the costs, the disproportionate impacts on the poorest segments of the population make air pollution a threat to shared and inclusive prosperity. The poor are more likely to live and work in polluted environments, but they are less able to avoid exposure or self-protect. In the United States, research dating back to the 1970s has documented how toxic facilities and sources of air pollution have tended to be sited near poor minority communities. 4 Disparities in exposure continue to exist today in places such as the South Bronx in New York City, where nearly 40 percent of people live below the poverty line and where asthma rates are four times higher than the national average (Katz 2012). Similarly, in China large point sources of pollution such as heavy industry are increasingly moving from city centers to the suburbs, where migrant workers congregate, and from coastal metropolises to second- or third-tier cities and rural towns, where land is cheaper and monitoring by environmental protection authorities may be more lax (Ma and Schoolman 2011; Schoolman and Ma 2012; Zhao, Zhang, and Fan 2014; Zheng et al. 2014a, 2014b). 1700234_Cost of Pollution.indd 2 8/29/16 1:55 PM
FIGURE 1.2 Percentage of Attributable Deaths by Risk Factor:Low-, Lower-Middle-Income,and Upper-Middle-Income Countries,2013 a.Low-income countries Metabolic risks 16.3 Dietary risks 11.1 Air pollution 10.3 Child and maternal malnutrition 10.0 Unsafe sex 7.8 Unsafe water,sanitation,and handwashing 7.0 Tobacco smoke 5.7 Alcohol and drug use 3.3 Lead exposure 2.1 Low physical activity 1.8 Sexual abuse and violence 0.9 Occupational risks 0.9 Residential radon 0.0 0 2 681012141618 of attributable deaths b.Lower-middle-income countries Metabolic risks 26.0 Dietary risks 18.3 Air pollution 11.4 Tobacco smoke 8.1 Alcohol and drug use 4.8 Child and maternal malnutrition 4.2 Unsafe water,sanitation,and handwashing 4.1 Low physical activity 3.5 Unsafe sex 2.5 Occupational risks 1.1 Lead exposure ☐1.1 Sexual abuse and violence 0.6 Residential radon 0.1 0 5 1015202530 of attributable deaths c.Upper-middle-income countries Metabolic risks 34.1 Dietary risks 26.2 Tobacco smoke 14.4 Air pollution 12.6 Alcohol and drug use 7.1 Lead exposure 2.7 Unsafe sex 2.3 Occupational risks 1.7 Child and maternal malnutrition0.7 Unsafe water,sanitation,and handwashing0.5 Sexual abuse and violence 0.3 Residential radon 0.2 0 5 10 152025303540 of attributable deaths Sources:World Bank and IHME,using data from IHME,GBD 2013. 3
3 Figure 1.2 Percentage of Attributable Deaths by Risk Factor: Low-, Lower-Middle-Income, and Upper-Middle-Income Countries, 2013 a. Low-income countries Metabolic risks Dietary risks Air pollution Child and maternal malnutrition Unsafe sex Unsafe water, sanitation, and handwashing Tobacco smoke Alcohol and drug use Lead exposure Low physical activity Sexual abuse and violence Occupational risks Residential radon 16.3 11.1 % of attributable deaths 0 2 4 6 8 10 12 14 16 18 10.3 10.0 7.8 7.0 5.7 3.3 2.1 1.8 0.9 0.9 0.0 b. Lower-middle-income countries Metabolic risks Dietary risks Air pollution Tobacco smoke Alcohol and drug use Child and maternal malnutrition Unsafe water, sanitation, and handwashing Low physical activity Unsafe sex Occupational risks Lead exposure Sexual abuse and violence Residential radon 26.0 % of attributable deaths 0 5 10 15 20 25 30 18.3 11.4 8.1 4.8 4.2 4.1 3.5 2.5 1.1 1.1 0.6 0.1 c. Upper-middle-income countries Metabolic risks Dietary risks Tobacco smoke Air pollution Alcohol and drug use Lead exposure Unsafe sex Occupational risks Child and maternal malnutrition Unsafe water, sanitation, and handwashing Sexual abuse and violence Residential radon 0 5 10 15 20 25 30 35 40 34.1 26.2 14.4 12.6 7.1 2.7 2.3 1.7 0.7 0.5 0.3 0.2 % of attributable deaths Sources: World Bank and IHME, using data from IHME, GBD 2013. 1700234_Cost of Pollution.indd 3 8/29/16 1:55 PM
Faced with higher levels of exposure,the poor are also more prone to suffering adverse health effects.In urban areas of Vietnam,for example,the prevalence of acute respiratory illnesses is twice as high in low-income households as in high-income ones(World Bank 2006).The dis- proportionate health burden suffered by poor households is due not only to higher exposure to air pollution but also to factors such as lower resistance to illness,simultaneous exposure to other environmental health risks,and inequalities in access to and use of basic services (PEP2008). By damaging people's health,pollution may have a lasting effect on economic productivity and perpetuate existing inequalities.Prenatal and early childhood exposure to heavy metals and other toxic substances in the environment is especially detrimental.Children are highly sensi- tive to the effects of toxics,and even small traces in a child's blood of substances such as lead or the polycyclic aromatic hydrocarbons(PAHs)found in polluted air and water can result in cognitive delays,among other health effects(see Grandjean and Landrigan 2014;Tang et al. 2014;Peterson et al.2015;Vishnevetsky et al.2015).These health impacts have long-term repercussions for productivity and innovation.A slight shift in average IQs from early expo- sure to toxics may reduce the number of intellectually"gifted"people and lead to marginally higher rates of crime and societal violence(see Weiss 1988;Wright et al.2008;GAHP 2013). Air pollution can have lasting effects on productivity in other ways as well-for example,by degrading natural ecosystems.Pollutants may settle in the air or mix with precipitation and be deposited on plants,in soils,or in waterways.Atmospheric deposition of pollutants has acidi- fied soils and reduced the diversity of plant species and the productivity of grasslands in places such as Mongolia,where many people rely on pastoral livelihoods(Chen et al.2013).Similar declines in the richness of plant species from the atmospheric deposition of pollutants have been observed in the grasslands of Europe(Dupre et al.2010).The detrimental effects of air pollutants on aquatic ecosystems include the loss of biota sensitive to the increased acidity of surface waters as well as increased phytoplankton and algal growth,which contributes to the eutrophication of waterways,causing dead zones and harmful algal blooms that hurt fisheries, water-based recreational activities,and tourism(see Greaver et al.2012). The Focus of This Report The costs of pollution to society are many,and a full accounting is beyond the scope of this report.Instead,this report will focus on what many studies have shown to be the largest and most damaging cost of pollution:premature mortality.More specifically,this report evaluates the costs of premature mortality from exposure to ambient concentrations of PM,,indoor concentrations of PM,in households cooking with solid fuels,and ambient ozone pollution. The valuation of mortality risks is supported by a well-developed body of economic theory and empirical evidence.Still,readers should remember that the full costs of air pollution to society are even greater than what is reported here.Examples of other costs not included in this report are discussed in box 1.1. Calculating the costs of premature mortality due to air pollution is intended to strengthen the business case for governments to act ambitiously in reducing pollution.The number of deaths The Cost of Air Pollution:Strengthening the Economic Case for Action
4 The Cost of Air Pollution: Strengthening the Economic Case for Action Faced with higher levels of exposure, the poor are also more prone to suffering adverse health effects. In urban areas of Vietnam, for example, the prevalence of acute respiratory illnesses is twice as high in low-income households as in high-income ones (World Bank 2006). The disproportionate health burden suffered by poor households is due not only to higher exposure to air pollution but also to factors such as lower resistance to illness, simultaneous exposure to other environmental health risks, and inequalities in access to and use of basic services (PEP 2008). By damaging people’s health, pollution may have a lasting effect on economic productivity and perpetuate existing inequalities. Prenatal and early childhood exposure to heavy metals and other toxic substances in the environment is especially detrimental. Children are highly sensitive to the effects of toxics, and even small traces in a child’s blood of substances such as lead or the polycyclic aromatic hydrocarbons (PAHs) found in polluted air and water can result in cognitive delays, among other health effects (see Grandjean and Landrigan 2014; Tang et al. 2014; Peterson et al. 2015; Vishnevetsky et al. 2015). These health impacts have long-term repercussions for productivity and innovation. A slight shift in average IQs from early exposure to toxics may reduce the number of intellectually “gifted” people and lead to marginally higher rates of crime and societal violence (see Weiss 1988; Wright et al. 2008; GAHP 2013). Air pollution can have lasting effects on productivity in other ways as well—for example, by degrading natural ecosystems. Pollutants may settle in the air or mix with precipitation and be deposited on plants, in soils, or in waterways. Atmospheric deposition of pollutants has acidified soils and reduced the diversity of plant species and the productivity of grasslands in places such as Mongolia, where many people rely on pastoral livelihoods (Chen et al. 2013). Similar declines in the richness of plant species from the atmospheric deposition of pollutants have been observed in the grasslands of Europe (Duprè et al. 2010). The detrimental effects of air pollutants on aquatic ecosystems include the loss of biota sensitive to the increased acidity of surface waters as well as increased phytoplankton and algal growth, which contributes to the eutrophication of waterways, causing dead zones and harmful algal blooms that hurt fisheries, water-based recreational activities, and tourism (see Greaver et al. 2012). The Focus of This Report The costs of pollution to society are many, and a full accounting is beyond the scope of this report. Instead, this report will focus on what many studies have shown to be the largest and most damaging cost of pollution: premature mortality. More specifically, this report evaluates the costs of premature mortality from exposure to ambient concentrations of PM2.5 , indoor concentrations of PM2.5 in households cooking with solid fuels, and ambient ozone pollution. The valuation of mortality risks is supported by a well-developed body of economic theory and empirical evidence. Still, readers should remember that the full costs of air pollution to society are even greater than what is reported here. Examples of other costs not included in this report are discussed in box 1.1. Calculating the costs of premature mortality due to air pollution is intended to strengthen the business case for governments to act ambitiously in reducing pollution. The number of deaths 1700234_Cost of Pollution.indd 4 8/29/16 1:55 PM
B0X1.1 Air Pollution:Harming Countries'Economies in Many Ways Beyond its deadly impact on human health,air pollution affects countries economies in many other ways,from degrading the functioning of natural ecosystems to harming economic compet- itiveness and the ability of growing cities to attract top talent.Although these costs are beyond the scope of this study,they deserve mention.Two illustrative examples of studies into the additional costs of pollution follow. Agriculture.The agriculture sector is both a source and a sufferer of air pollution.In the North China Plain,for example,fertilizer use in crop fields is a major contributor to ammonia emissions, which react chemically in the atmosphere with other pollutants such as sulfur dioxide(SO,), nitrogen oxides(NO),and volatile organic compounds(VOCs)to form PM.s(see Guan and Liu 2013).At the same time,pollutants may adhere to plant surfaces and reduce the amount of sunlight reaching crops,stunting their growth(see Chen 2014).In China,surface ozone(a major component of smog)has reduced yields of summer wheat by an estimated 6-12 percent each year and soybeans by an estimated 21-25 percent(Wang and Mauzerall 2004;Avnery et al.2011) The World Bank and the Chinese environmental authority estimate the cost of acid rain and SO,pollution on agricultural output in China at 30 billion yuan a year(2003 prices)-see World Bank-SEPA (2007). Loss of urban competitiveness.The livability of cities is increasingly believed to affect their eco- nomic competitiveness.As the labor force becomes more global,top cities must compete for tal- ented,educated workers who are free to migrate to less polluted,more livable places.Anecdotal evidence abounds of how pollution is harming the ability of firms to attract talent.For example,in a 2012 survey by the American Chamber of Commerce in Hong Kong,around one-third of employ- ers said they were having a harder time recruiting overseas candidates because of concerns about air quality(Pak 2013).Numerous benchmarking indexes have also been created that compare the overall livability or competitiveness of cities,taking into account the severity of air pollution.These include the urban livability rating of the Economist Intelligence Unit(EIU 2014),the City Prosperity Index of the United Nations Human Settlements Programme(UN-HABITAT 2012),and the liva- bility index constructed for South Asian cities by the World Bank(2016).Although these indexes enable urbanites to see how their cities stack up against others,they do not quantify the actual mon- etary cost of pollution via its effect on competitiveness,demonstrating a causal link between higher levels of pollution and reduced economic competitiveness and quantifying the effect of pollution on cities'competitiveness remain elusive. each year and the incidence of illness alone make a compelling case for tackling pollution. Why then assign a dollar value to these impacts?The answer is that governments worldwide face a wide array of competing challenges every day,and valuing the costs of pollution helps governments decide how to allocate scarce resources and to measure the results of policies by providing a common basis of comparison.Economic valuation may also help governments measure social costs that are not reflected in existing markets and prices but are nonetheless crucial to people's well-being.An example of how economic valuation has assisted the govern- ment of Mongolia in fighting air pollution is provided in box 1.2.And the annual reporting by the U.S.federal government on the benefits and costs of air pollution control is discussed in box 1.3.As economic studies by public agencies in the United States and elsewhere have demonstrated,because large populations are exposed to the health risks of air pollution,these The Cost of Air Pollution:Strengthening the Economic Case for Action 5
The Cost of Air Pollution: Strengthening the Economic Case for Action 5 each year and the incidence of illness alone make a compelling case for tackling pollution. Why then assign a dollar value to these impacts? The answer is that governments worldwide face a wide array of competing challenges every day, and valuing the costs of pollution helps governments decide how to allocate scarce resources and to measure the results of policies by providing a common basis of comparison. Economic valuation may also help governments measure social costs that are not reflected in existing markets and prices but are nonetheless crucial to people’s well-being. An example of how economic valuation has assisted the government of Mongolia in fighting air pollution is provided in box 1.2. And the annual reporting by the U.S. federal government on the benefits and costs of air pollution control is discussed in box 1.3. As economic studies by public agencies in the United States and elsewhere have demonstrated, because large populations are exposed to the health risks of air pollution, these Box 1.1 Air Pollution: Harming Countries’ Economies in Many Ways Beyond its deadly impact on human health, air pollution affects countries’ economies in many other ways, from degrading the functioning of natural ecosystems to harming economic competitiveness and the ability of growing cities to attract top talent. Although these costs are beyond the scope of this study, they deserve mention. Two illustrative examples of studies into the additional costs of pollution follow. Agriculture. The agriculture sector is both a source and a sufferer of air pollution. In the North China Plain, for example, fertilizer use in crop fields is a major contributor to ammonia emissions, which react chemically in the atmosphere with other pollutants such as sulfur dioxide (SO2 ), nitrogen oxides (NOx ), and volatile organic compounds (VOCs) to form PM2.5 (see Guan and Liu 2013). At the same time, pollutants may adhere to plant surfaces and reduce the amount of sunlight reaching crops, stunting their growth (see Chen 2014). In China, surface ozone (a major component of smog) has reduced yields of summer wheat by an estimated 6–12 percent each year and soybeans by an estimated 21–25 percent (Wang and Mauzerall 2004; Avnery et al. 2011). The World Bank and the Chinese environmental authority estimate the cost of acid rain and SO2 pollution on agricultural output in China at 30 billion yuan a year (2003 prices)—see World Bank–SEPA (2007). Loss of urban competitiveness. The livability of cities is increasingly believed to affect their economic competitiveness. As the labor force becomes more global, top cities must compete for talented, educated workers who are free to migrate to less polluted, more livable places. Anecdotal evidence abounds of how pollution is harming the ability of firms to attract talent. For example, in a 2012 survey by the American Chamber of Commerce in Hong Kong, around one-third of employers said they were having a harder time recruiting overseas candidates because of concerns about air quality (Pak 2013). Numerous benchmarking indexes have also been created that compare the overall livability or competitiveness of cities, taking into account the severity of air pollution. These include the urban livability rating of the Economist Intelligence Unit (EIU 2014), the City Prosperity Index of the United Nations Human Settlements Programme (UN-HABITAT 2012), and the livability index constructed for South Asian cities by the World Bank (2016). Although these indexes enable urbanites to see how their cities stack up against others, they do not quantify the actual monetary cost of pollution via its effect on competitiveness, demonstrating a causal link between higher levels of pollution and reduced economic competitiveness and quantifying the effect of pollution on cities’ competitiveness remain elusive. 1700234_Cost of Pollution.indd 5 8/29/16 1:55 PM
BOX 1.2 Using an Air Quality Management Study and Economic Valuation to Help Ulaanbaatar Forge a Strategy to Combat Air Pollution Ulaanbaatar,Mongolia,is one of the world's coldest capital cities.In recent years,it has also become known as one of the world's most polluted cities.Most of the city's air pollution appears during the winters,when the 180,000 or so households living in informal settlements marked by traditional circular tents known as gers burn raw coal in stoves for heating and cooking.As a result,despite having a population of only 1.2 million,Ulaanbaatar has experienced levels of air pollution worse than those in much larger cities such as Beijing and Delhi. In 2007 efforts to replace the traditional heating stoves in the ger areas met with resistance from Ulaanbaatar government officials,who were not certain they wanted to prioritize stove removal, particularly given the cost.This led to a full-scale air quality management study,seeking a com- plete understanding of the sources,concentration levels,and health impacts of pollution and outlining the most cost-effective abatement options for the short,medium,and long term.The study revealed that switching out existing stoves with cleaner-burning,more efficient ones would yield net health benefits of $1.6 billion.The benefits of pursuing other options,such as mov- ing ger households into apartments,would have come later.However,that delay would result in health-related losses of up to $3.5 billion if more immediate action was not taken.Delaying stove replacement by just three years would lead to health-related losses of about $1.0 billion. Armed with the results of this analysis,Ulaanbaatar decided to go ahead with the stove replace- ment program as one of the main pillars of its strategy to reduce air pollution.Since 2010,Ulaan- baatar has replaced nearly 170,000 stoves,reaching more than 90 percent of households in the ger areas.Continued monitoring of PM,s has revealed a notable reduction in pollution levels since the baseline study;yearly average concentrations declined from over 250 ug/m3 in 2008-09 to around 80 ug/min 2014-15.Although a longer period of monitoring will be needed to establish definite trends in concentrations,these initial improvements are reason for optimism. Source:Excerpted and adapted from Awe et al.(2015) BOX 1.3 Accounting for the Costs and Benefits of Air Pollution Control in the United States Every year,the U.S.Office of Management and Budget(OMB)reports to Congress on the costs and benefits of federal regulations.OMB has consistently found that rules issued by the U.S.Envi- ronmental Protection Agency(EPA)to improve air quality are the most economically beneficial of all federal regulations.Indeed,OMB estimates that EPA regulations issued between 2004 and 2014 to limit air pollution generated between $157 billion and $777 billion(constant year 2010 prices)in benefits to the American economy,mainly by reducing the public health risks of expo- sure to fine particulate matter(OMB 2015).Implementing these rules costs between $37 billion and $44 billion,meaning the benefits have outweighed the costs by a ratio of at least 4 to 1. 6 The Cost of Air Pollution:Strengthening the Economic Case for Action
6 The Cost of Air Pollution: Strengthening the Economic Case for Action Box 1.2 Using an Air Quality Management Study and Economic Valuation to Help Ulaanbaatar Forge a Strategy to Combat Air Pollution Ulaanbaatar, Mongolia, is one of the world’s coldest capital cities. In recent years, it has also become known as one of the world’s most polluted cities. Most of the city’s air pollution appears during the winters, when the 180,000 or so households living in informal settlements marked by traditional circular tents known as gers burn raw coal in stoves for heating and cooking. As a result, despite having a population of only 1.2 million, Ulaanbaatar has experienced levels of air pollution worse than those in much larger cities such as Beijing and Delhi. In 2007 efforts to replace the traditional heating stoves in the ger areas met with resistance from Ulaanbaatar government officials, who were not certain they wanted to prioritize stove removal, particularly given the cost. This led to a full-scale air quality management study, seeking a complete understanding of the sources, concentration levels, and health impacts of pollution and outlining the most cost-effective abatement options for the short, medium, and long term. The study revealed that switching out existing stoves with cleaner-burning, more efficient ones would yield net health benefits of $1.6 billion. The benefits of pursuing other options, such as moving ger households into apartments, would have come later. However, that delay would result in health-related losses of up to $3.5 billion if more immediate action was not taken. Delaying stove replacement by just three years would lead to health-related losses of about $1.0 billion. Armed with the results of this analysis, Ulaanbaatar decided to go ahead with the stove replacement program as one of the main pillars of its strategy to reduce air pollution. Since 2010, Ulaanbaatar has replaced nearly 170,000 stoves, reaching more than 90 percent of households in the ger areas. Continued monitoring of PM2.5 has revealed a notable reduction in pollution levels since the baseline study; yearly average concentrations declined from over 250 µg/m3 in 2008–09 to around 80 µg/m3 in 2014–15. Although a longer period of monitoring will be needed to establish definite trends in concentrations, these initial improvements are reason for optimism. Source: Excerpted and adapted from Awe et al. (2015) Box 1.3 Accounting for the Costs and Benefits of Air Pollution Control in the United States Every year, the U.S. Office of Management and Budget (OMB) reports to Congress on the costs and benefits of federal regulations. OMB has consistently found that rules issued by the U.S. Environmental Protection Agency (EPA) to improve air quality are the most economically beneficial of all federal regulations. Indeed, OMB estimates that EPA regulations issued between 2004 and 2014 to limit air pollution generated between $157 billion and $777 billion (constant year 2010 prices) in benefits to the American economy, mainly by reducing the public health risks of exposure to fine particulate matter (OMB 2015). Implementing these rules costs between $37 billion and $44 billion, meaning the benefits have outweighed the costs by a ratio of at least 4 to 1. 1700234_Cost of Pollution.indd 6 8/29/16 1:55 PM