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Environmental Management

The Economic Losses Resulting from Pollution

The studies of the economic losses resulting from pollution are very valuable instruments in policy decisions making in the control of pollution. Since there are no available data on local economic effect of pollution in any situation in Nigeria we will in this unit share the China experience as listed in the main content.

The research was undertaken by the Policy Research Centre of the National Environmental Protection Agency, 100035, Beijing. Most of the formulae used to arrive at results were not captured. However, the information will give you an insight to what economic cost/impact of pollutants/pollution is all about.

1. Economic Losses Resulting from the Impact of Water Pollution on Human Health

Water pollution may affect people indirectly through the aquatic food chain and through the use of waste water for crop irrigation. Water pollution can also have a direct effect on human health as a result of polluting drinking water, often causing infections and chronic or acute poisoning. In many parts of China, especially in suburban areas, waste water is used to irrigate crops.

The advantages of using waste water in this way include its greater availability, its fertilizing properties, and the limited purification required. However, the long term costs of waste water irrigation outweigh the benefits. Waste water irrigation pollutes and damages both the agricultural environment and human health.

According to the 1993 Bulletin of China’s Environmental Status, waste water irrigation polluted 3.3 million ha (Mha) of farmland and affected a population of 40 million.

A 1980s study on irrigation conducted in Shenyang and Fushun in Liaoning province discovered the incidence of cancer in regions that irrigate with waste water was twice that of regions that relied on fresh water. In regions that irrigated with waters contaminated by petroleum, the incidence of certain major diseases was 1.5 to 20 times higher than in areas that relied on fresh water irrigation.

Furthermore, the incidence of stomach cancer in areas irrigated with waste water was found to be 18 per 100,000, far higher than the 12 per 100,000 found in areas that irrigated with fresh water. In addition, the incidence of enteric disease was 5 per cent higher in regions that rely on waste water irrigation, and the incidence of hepatitis was 3.6 per cent higher.

The human capital formula is best suited to calculating economic losses resulting from the impact of water pollution on human health.

According to data produced by public health departments, the average medical expenses per patient per year were: 5,595 yuan for cancer patients, 280 yuan for hepatitis patients and 93 yuan for patients with enteric disease.

China’s health system is unique in that the family of a sick person is responsible for his or her care, even while the sick person is residing in hospital.

As a result, economic losses resulting from sickness and hospitalization must also account for time lost by family members. The average number of days a family spends accompanying and caring for a family member is 36 days for cancer patients, 25 days for patients with hepatitis, and 10 days for patients with enteric disease.

To summarize, the economic losses resulting from the impact of water pollution on human health is approximately 20 billion yuan.

In Nigeria for example, when rain falls, and surface runoffs fill the rivers and dams, the water bodies become heavily polluted. It becomes more expensive when the same water is to be treated for municipal supply for drinking. The additional cost of chlorine and other coagulants to be used runs into millions of Naira.

2. Economic Losses Resulting from the Impact of Water Pollution on Farm Yields

In the mid-1980s the Agricultural Environmental Protection Institute conducted a study of 380,000 hectares (ha) of farmland in 37 regions that depended on sewage water for irrigation.

According to the study, farmland irrigated with sewage water yielded 80 million kg of grain less than farmland irrigated with clean water, a difference of 210 kg/ha in yields. Since 3.3 Mha of farmland were irrigated with sewage water in 1992, we estimate the resultant loss of grain yields was 690,000 tons.

It has been suggested that plants be used as indicators for harmful contaminants because of their greater sensitivity to certain specific contaminants. Hydrogen fluoride, sulphur dioxide, smog, ozone, and ethylene are among the compounds that can harm plants.

Assessment of damage shows that the loss can be significant, although other factors such as soil fertility, temperature, light, and humidity also affect production. In May, 1970 it was reported in Czechoslovakia that more than 300 square miles of evergreen forests were severely damaged by sulphur dioxide fumes.

Sulphur dioxide injury shows up as bleached and necrotic areas between the veins, growth suppression, and reduction in yield. Hydrogen fluoride injury shows as plant leaf tip and margin burn, chlorosis, dwarfing, abrupt growth cessation, and lowered yield.

3. Economic Losses Resulting from the Impact of Water Pollution on Livestock and Fisheries

It is estimated that 320,000 large animals were lost as a result of water pollution. The market value per head of cattle in 1985 was 1,000 yuan. Since we know that the 1992 purchase price was 179.3 per cent above the 1985 figure, we calculate that the average market price of livestock in 1992 was 1,793 yuan per head.

The Economic Impact of Pollution

Implementing the Market value formula, we estimate the loss of livestock to water pollution in the cities of Beijing and Tianjin, and the province of Liaoning at 580 million yuan. By adding 20 per cent to this figure, we arrive at 700 million yuan, reflecting the economic loss for the entire country.

Read Also: Impact of Pollutants/Pollution on Human Health

Water pollution also caused the loss of 45,500 tonnes of fish in the country’s 327,000 ha fresh water aquatic industry. Implementing the market value formula, we estimate the economic loss arising from an incremental decrease in aquatic yields at 64.61 million yuan.

We then add the 400 million yuan lost to fisheries as a result of pollution accidents to this figure, arriving at the approximate total economic loss to fisheries of 460 million yuan. By combining the total economic loss resulting from the impact of water pollution on both the livestock and fisheries industries, we arrive at a total of 1.16 billion yuan.

Fluorides have caused crippling skeletal damage to cattle in areas where fluorides absorbed by vegetation are ingested. Animal laboratory studies show deleterious effects from exposure to low levels of ozone, photochemical oxidants, and peroxyacyl nitrates (PAN).

Lead and arsenic have also been implicated in the poisoning of sheep, horses, and cattle. Likewise, some incidences of large cattle or animal mortality especially in the grazing fields of Northern Nigeria are largely due to soil pollution with dangerous chemicals or pesticides.

4. Economic Losses Resulting from the Impact of Air Pollution on Human Health

The main economic impact of air pollution on human health is the rising incidence of respiratory disease among people, resulting in a loss of human capital.

There are three major respiratory illnesses focused; chronic bronchitis, pulmonary heart disease, and lung cancer. The economic loss resulting from the impact of air pollution on human health, in 1992, is approximately 20.16 billion yuan.

5. Economic Losses Resulting from the Impact of Air Pollution on Materials

Air pollution causes damage to materials, increasing the amount of time that must be devoted to household upkeep, laundering, and car washing. Due to its corrosive effect, air pollution also shortens the life span of structures, urban facilities, and factory equipment.

Pollutants cause damage to property, equipment, and facilities, in addition to increased medical costs, lost wages and crop damage.

Sulphur pollution attacks copper roofs and zinc coatings; steel corrodes two to four times faster in urban and industrial areas; the usual electrical equipment contacts become unreliable unless serviced frequently; clothing fabric and leather are weakened; paint pigments are destroyed; and building surfaces, materials, and works of art are corroded.

In addition particulates (including smoke) in polluted air cause erosion, accelerate corrosion, and soil clothes, buildings, cars, and other property, making more frequent cleaning and use of air –filtering equipment necessary. Ozone reduces the useful life of rubber, discolors dyes, and damages textiles.

Air pollutants interrupt part of the light from the sun, thereby increasing the use of electricity in daytime. Unburned fuel coming out of the chimney or auto exhaust pipe as black smoke is wasted energy.

A study conducted by the United States Environmental Protection Agency (USEPA) reported that air pollution was costing the residents of big cities as much as $6 billion a year in property and health damage. Crop and ornamental plant losses were estimated at $160 million. Damage to buildings, clothing, and other property add $12.3 billion.

Sickness alone from air pollution was estimated to cost Americans about $4.6 billion yearly in medical treatment, loss wages for sick workers, and lost work. The American Lung Association estimates pollution related losses in medical costs, lost wages, disability, and premature deaths to be more than $10 billion year.

Air pollution increases dust fall, adding to the time required for household upkeep. The life-span of clothes is shortened by the frequent laundering necessitated by air pollution. Frequent laundering also creates increased demand for water, electricity, and detergent.

A 1990 study suggested that, as a result of air pollution, for every hour per day a person is exposed to the open air, he or she will be required to spend an additional 1.11 yuan on clothes laundering each year.

Acid rain is a particularly damaging component of air pollution. The corrosive impact of acid rain on steel shortens its effective life span from 44.4 years under normal conditions, to only 19 years under polluted conditions.

6. Economic Losses Resulting from Solid Waste

Solid waste contributes to soil and underground water pollution, and occupies land previously earmarked for other uses. According to a report issued by the National Environmental Protection Agency, 5.919 billion tons of industrial waste have accumulated over the past few years, occupying 54.5 thousand ha of land.

Read Also: Natural Sources of Pollution

This is equivalent to 100 million tons of waste for every 920 ha of occupied land. Statistics also confirm that in 1992 there were 618 million tons of solid waste, of which 256 million tons were reused, and 126 million tons were discharged. The remaining 336 million tons accumulated on approximately 3,100 ha of land.

The majority of solid waste accumulates around cities on land previously earmarked for vegetables and grain cultivation. The economic loss from land used for solid waste is 5.12 billion yuan (120 million x 42.67).

Economic losses resulting from environmental pollution in 1992 equalled approximately 98.61 billion yuan. This amount can be disaggregated as follows:

– Water pollution contributed 35.6 billion yuan, accounting for 36.1 per cent of total losses

– Air pollution contributed 57.89 billion yuan, accounting for 58.7 per cent of total losses

– Solid waste contributed 5.12 billion yuan, accounting for 5.2 per cent of total losses.

These results are presented in the table below:

Table: Losses Resulting from Pollution in1992
Environmental FactorValue of Economic Loss (billion yuan)% of Total Loss
Water Pollution35.6036.10
Human Health19.28
Crop Yields1.38
Air Pollution57.8958.70
Human Health20.16
Household Upkeep13.44
Acid Rain14.00
Solid Waste5.125.20
Total98.61 (4.04% of GNP)100.00

The regional distribution of economic losses has been estimated to correspond with the industrial income of economic regions.

Table: Regional Distribution of Economic Losses
RegionTotal Value of Industri al Producti on (billion yuan)Regiona l Share of Industri al Producti on (%)Total Losses Resulti ng From Polluti on (billion yuan)Losses Resulti ng from Water Polluti on (billion yuan)Losses Resulti ng From Air Polluti on (billion yuan)Losses Resulting From Solid Waste (billion yuan)
Country Wide2894.16510098.6135.657.895.12
North- East356.61712.3312.164.397.140.63
South- Central650.8722.4922.178.0113.021.15
South- West220.1447.617.502.714.410.39
North- West128.8444.454.391.582.560.22
Source: The Figures for Regional Industrial Income are Derived from AStatisticalSurveyofChina,1993.

China’s Gross National Product (GNP) in 1992 was 2,437.89 billion yuan. The economic loss resulting from environmental pollution was 98.61 billion yuan, equivalent to 4.04 per cent of GNP. The results of this study are as follows: In 1992, environmental pollution in China resulted in 98.6 billion yuan in economic losses.

These losses can be attributed as follows:

– Water pollution accounted for 37.6 per cent of total losses, equivalent to 36.1 billion yuan

– Air pollution accounted for 58.7 per cent of total losses, equivalent to 57.89 billion yuan

– Solid waste accounted for 5.2 per cent of total losses, equivalent to 5.12 billion yuan.

As a percentage of GNP, environmental pollution caused economic losses equivalent to 4.04 per cent of China’s 1992 GNP.

In conclusion, as noted, economic losses resulting from environmental pollution are closely related to such factors as economic activities, population, and geographic conditions. Of these various factors, we consider economic activities to be the major contributor to economic losses resulting from environmental pollution.


Benadine Nonye is an agricultural consultant and a writer with over 12 years of professional experience in the agriculture industry. - National Diploma in Agricultural Technology - Bachelor's Degree in Agricultural Science - Master's Degree in Science Education - PhD Student in Agricultural Economics and Environmental Policy... Visit My Websites On: 1. - Your Comprehensive Practical Agricultural Knowledge and Farmer’s Guide Website! 2. - For Effective Environmental Management through Proper Waste Management and Recycling Practices! Join Me On: Twitter: @benadinenonye - Instagram: benadinenonye - LinkedIn: benadinenonye - YouTube: Agric4Profits TV and WealthInWastes TV - Pinterest: BenadineNonye4u - Facebook: BenadineNonye

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