Cost Assessment of Environmental Degradation in The Middle East and North Africa Region – Selected Issues

This paper estimates the cost of inadequate potable water, sanitation and hygiene, outdoor air pollution, and cropland degradation in 16 countries of the Arab League. Estimated annual cost was equivalent to 3.4 percent of the countries’ GDP in 2008, averaging 3.1 percent of GDP in the 10 countries with the highest GDP per capita and 8.7 percent of GDP in the 6 countries with the lowest GDP per capita. Cost as a percent of GDP declines by 0.6 percent per one percent increase in GDP per capita across the 16 countries. This association is primarily driven by the cost of inadequate water, sanitation and hygiene, to a much lesser extent by the cost of land degradation, and to no statistically significant extent by the cost of outdoor air pollution. Costs of other forms of environmental degradation are also likely to be substantial in at least some of the countries as evidenced by the METAP/World Bank cost of environmental degradation studies from 2002-2004 and reports from recent household surveys of high prevalence of household use of solid fuels, and thus household air pollution, in five of the six countries with the lowest GDP per capita.