Green Accounting, Air Pollution and Health
Human capital is an important component of economic growth. The article extends a theoretical model for comprehensive national accounting to the welfare effects of pollution on human capital. The model includes a production externality in the form of a flow of air pollutants that cause both direct disutility and indirect welfare effects by negatively affecting the productivity of labor. We show that defensive medical expenditures or healthcare costs allocated to mitigating the disutility of air pollution should not be deducted from conventional net national product (NNP), whereas the value of the percieved disutility of illness episodes caused by pollution should be subtracted from NNP. We derive a marginal cost-benefit rule for an optimal level of pollution given its negative health effects. The rule can be used for determining an optimal tax on harmful emissions. Finally, we outline a scheme for empirical comprehensive accounting and for estimation of an emissions tax.
|Date of creation:||14 May 2003|
|Date of revision:|
|Note:||This paper is published as: Huhtala,A. and E. Samakovlis (2007), "Flows of Air Pollution, Ill Health and Welfare", Environmental and Resource Economics, 37 (2)|
|Contact details of provider:|| Postal: National Institute of Economic Research, P.O. Box 3116, SE-103 62 Stockholm, Sweden|
Phone: 46-(0)8-453 59 00
Fax: 46-(0)8-453 59 80
Web page: http://www.konj.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Weitzman, Martin L., 2000.
"The linearised Hamiltonian as comprehensive NDP,"
Environment and Development Economics,
Cambridge University Press, vol. 5(01), pages 55-68, February.
- Martin L. Weitzman, 1998. "The Linearized Hamiltonian as Comprehensive NDP," Harvard Institute of Economic Research Working Papers 1845, Harvard - Institute of Economic Research.
- Roberton C. Williams, 2000.
"Environmental Tax Interactions When Pollution Affects Health or Productivity,"
NBER Working Papers
8049, National Bureau of Economic Research, Inc.
- Williams, Roberton III, 2002. "Environmental Tax Interactions when Pollution Affects Health or Productivity," Journal of Environmental Economics and Management, Elsevier, vol. 44(2), pages 261-270, September.
- Aronsson, Thomas & Lofgren, Karl-Gustaf, 1999. "Pollution tax design and 'Green' national accounting," European Economic Review, Elsevier, vol. 43(8), pages 1457-1474, August.
- Aaheim, Asbjorn & Nyborg, Karine, 1995. "On the Interpretation and Applicability of a "Green National Product."," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(1), pages 57-71, March.
- Peskin, Henry M & Peskin, Janice, 1978. "The Valuation of Nonmarket Activities in Income Accounting," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 24(1), pages 71-91, March.
- Ståle Navrud, 2001. "Valuing Health Impacts from Air Pollution in Europe," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(4), pages 305-329, December.
- Ostro, Bart D., 1983. "The effects of air pollution on work loss and morbidity," Journal of Environmental Economics and Management, Elsevier, vol. 10(4), pages 371-382, December.
- N. Künzli & R. Kaiser & S. Medina & M. Studnicka & O. Chanel & P. Filliger & M. Herry & F. Horak & V. Puybonnieux-Texier & Philippe Quénel & Jodi Schneider & R. Seethaler & J.C Vergnaud & H. Sommer, 2000. "Public health Impact of Outdoor and Traffic related Air Pollution," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00150955, HAL.
- Solow, Robert M, 1986. " On the Intergenerational Allocation of Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(1), pages 141-49.
- David E. Bloom & David Canning & Jaypee Sevilla, 2001. "The Effect of Health on Economic Growth: Theory and Evidence," NBER Working Papers 8587, National Bureau of Economic Research, Inc.
- Hartwick, John M., 1990.
"Natural resources, national accounting and economic depreciation,"
Journal of Public Economics,
Elsevier, vol. 43(3), pages 291-304, December.
- John M. Hartwick, 1990. "Natural Resources, National Accounting and Economic Depreciation," Working Papers 771, Queen's University, Department of Economics.
- Strauss, J. & Thomas, D., 1995.
"Health, Nutrition and Economic development,"
95-23, RAND - Labor and Population Program.
- Ahlroth, Sofia, 2000. "Correcting Net Domestic Product for Sulphur Dioxide and Nitrogen Oxide Emissions: Implementation of a Theoretical Model in Practice," Working Paper 73, National Institute of Economic Research.
- Karl-Göran Mäler, 1991. "National accounts and environmental resources," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 1(1), pages 1-15, March.
- Hamilton, Kirk, 1996. "Pollution and Pollution Abatement in the National Accounts," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(1), pages 13-33, March.
When requesting a correction, please mention this item's handle: RePEc:hhs:nierwp:0082. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Henrik Hellström)
If references are entirely missing, you can add them using this form.