Air pollution and dieselgate

I have some interest in the health impacts of air pollution. My first economic consultancy project was an Economic Appraisal of Wood Smoke Control Measures Report for the NSW Government.

I hadn’t looked at the economic impacts of wood smoke (Particulate Matter 10 – PM10) on society. PM10 has significant impacts on the rates of hospitalisation for respiratory issues. A tonne of PM10 creates more than $235,000 of health costs in a capital city!

The positive impacts of policy measures to phase out wood smoke generating stoves were substantial. The chart below shows that there were basically no costs associated with policy measures that generated billions of dollars of benefits for society.

So it is interesting to see this working paper from the Federal Reserve Bank of Chicago that looked at the nitrogen dioxide impacts of cheating diesel cars.

The study found that :

Using the universe of vehicle registrations, we demonstrate that a 10 percent cheating-induced increase in car exhaust increases rates of low birth weight and acute asthma attacks among children by 1.9 and 8.0 percent, respectively. These health impacts occur at all pollution levels and across the entire socioeconomic spectrum.

This is stunning revelation. Basically, the diesel cheating cars put emissions into areas that didn’t have high emissions (wealthier areas) and there was noticeable impacts on birth weights and acute asthma attacks.

I am not sure if the study is top-notch but even a minor relationship between the cars and birth weight/asthma issues is huge for VW and for the future of the diesel car.

Multiply the respiratory and birth impact costs by the number of cases (in a country of 300 million people with high incomes) and that could be a ruinous number.