About the Talk
Many developing countries worldwide face the dual change of sustaining their rapid pace of development while ensuring that this development occurs sustainably. Industrialisation, together with the surging populations, has resulted in severe environmental degradation, the key aspect being air pollution. Air pollutants like SO2, NOx, lead, ozone, and PM have primarily caused the most significant and obvious damage to air quality in cities worldwide. It becomes imperative as such for governments and industries to have a useful and accurate method to estimate the economic cost of air pollution for policymaking, regulation, surveillance, and innovation. With the end of the Covid-19 pandemic, there has been an increasing surge in air pollution in many cities. High air pollution causes damage to health, losses in productivity, physical damage to buildings and infrastructure, constraints to recreation and leisure, and more.
This talk focuses on such high cost of air pollution, why it matters and what we can do about it. We take stock of studies on air pollution, estimates on costs, the many types of air pollution, including transboundary haze and cultural practices, and how this requires different remedies to mitigate or resolve them. The talk will also draw from my own works related to air pollution.
Details: 1 June 2023, Thursday, 5.00pm – 6.30pm
Moderator: Prof Dato’ Zulfigar Yasin
About the Speaker
Euston Quah is Albert Winsemius chair professor of economics and director of the Economic Growth Centre at Nanyang Technological University, Singapore. He is also editor of the Singapore Economic Review and president of the Economic Society of Singapore. Professor Quah has published widely in the fields of cost-benefit analysis, environmental economics, and law and economics. Contributing to more than a hundred publications, inclusive of academic journals and lead opinion pieces in media, Some of his works have been selected for inclusion by the International Library of Critical Writings in Economics in the UK as well as received favourable reviews in such leading journals as Economic Journal, Journal of Economic Literature, and the Journal of Labour Economics. His work on air pollution has also been cited by The Lancet.
His textbook with E.J Mishan, now in its 6th edition (Routledge, UK, 2020), is regarded as a classic text in this subject and used by many universities and governments. It was listed for reference by the US Office of Management and Budget, and by the US Department of Transportation. His Asian edition of the textbook, Principles of Economics (3rd edition, Cengage 2021) with Gregory Mankiw continues to be a best seller.
Professor Quah was listed in Google Scholar Profiler since 2020 as among the top ten most highly cited university economists in cost-benefit analysis in the world. Formerly vice dean of the Faculty of Arts and Social Sciences at the National University of Singapore and headed the economics departments at both Nanyang Technological University and the National University of Singapore, Professor Quah has been and continues to be advisor to many government ministries in Singapore. Professor Quah chaired the School of Humanities and Social Sciences at NTU. He is a member of the Social Sciences Research Council of Singapore, board member of the Competition and Consumer Commission of Singapore, and board member of the Market Surveillance and Compliance Committee of Singapore’s Energy Market Company.
He had consulted for Pricewaterhouse, World Bank, Asian Development Bank, Canadian International Development Agency, Gentings International, and Takeda Pharmaceuticals, among others. He also served as a Review Panel Member for the Bill and Melinda Gates Foundation for the project hosted by the Overseas Development Institute of London, UK, a Technical Reviewer for the National Research Foundation (Singapore), Humanities and Social Sciences Research Council (Canada ), and the Australian Research Council.
In addition to being a former president of the Asian Law and Economics Association, and elected member of the prestigious European Academy of Sciences and Arts, Professor Quah had been an invited or plenary keynote speaker for functions hosted by Stanford University, Princeton University, the USA Inter-Pacific Bar Association, US Society of Benefit-Cost Analysis, World Wide Fund for Nature, UNESCAP, Earth Institute of Columbia University (Asian Meetings), Nagoya University, Kobe University, Korea University, Zhejiang University, ADB and ADBI. Often interviewed and cited by CNA, Straits Times, Business Times, BBC, and foreign presses in France, Taiwan, Thailand, Malaysia, Philippines, and Denmark, Professor Quah is one of the most highly cited and influential academic economists in Singapore. In 2020, Professor Quah was awarded the Public Administration Medal (Silver) on Singapore’s National Day.
Key Takeaways from the Event
- The sources of air pollution in Malaysia come from power generation, industrial manufacturing, vehicles and open burning activities
- Transboundary haze (especially from Indonesia), including indoor air pollution makes the overall situation even worse
- Air pollution affects health and rising economic cost due to healthcare spending, loss of income and loss of productivity
- Estimated annual economic cost: MYR 303 billion or 20% of GDP in 2019
- Economic growth and development leads to higher level of air pollution but on the other hand, for developed countries, that means a preference or demand for better quality of life (lower level of air pollution)
- Air pollution imposes 3 impacts on society: socio-economic, environment and public health
What Can We Do?
It depends on the types of air pollution; there is no one-size-fits-all solution:
- Adaptation: Face masks, air purifiers, reduction of time spent outdoors
- Advocacy of media and NGOs (changing behavior/mindset)
- Regulation of companies producing fireworks and incense
- Come up with creative solutions regarding cultural practices
- Infrastructure investment (subsidisation of cleaner production methods)
- Adaptation: Provision of information, fire-fighting, cloud-seeding
- Mitigation: Face masks, air purifiers, reduction of time spent outdoors
- Sustaining high excise taxes for tobacco products
- Differential charges and disincentives
o Command and control: regulations, quantity control, stricter monitoring
o Carbon pricing: carbon tax, cap-and-trade
- Air pollution is serious. We know the causes. We know the costs. We know the remedies. Political will is important.
- Optimal level of air pollution:
- Instruments: carbon tax, tradable permits
- Need to reduce both cost of damages from air pollution and cost of controlling air pollution
- Different types of air pollution require different solutions
o CBA to evaluate cost of air pollution and factors affecting the optimal level
o MDF: environmental change, pollutant accumulation, type of pollutants, population exposed
o MAC: abatement technology, enforcement cost, taxes, subsidies, mode of policy
o VOSL by WTP (CVM), revealed preference (hedonic pricing)
o Also need to calculate intangible costs (visibility losses, recreation, leisure, and discomfort)
Questions Raised by Participants:
1. Why not focus on addressing big energy-generator companies who are major contributors of air pollution?
Euston: Carbon tax are usually aimed at the big energy emitters. The question is whether these companies pass on this tax incidence to the other downstream users and causes the cost of inflation to go up. But it is true that if you want to control carbon emissions, you start with high emitters and I think every country identify these high emitters and tax them.
2. We have our localized haze during the harvesting season. The government is against this type of pollution especially during the hot and dry season, but during harvesting time, it goes on. So how can we mitigate that?
Prof Dato’ Zulfigar: Harvesting season is a cultural thing that we need to overcome. People have been doing it for a long time. To them, that is the most efficient and fastest method to return nutrient into the soil. There had been alternative suggestion to do composting but it takes a long time for huge farms, maybe 1.5 years before its composted on that scale. If we do not return nutrient to the soil, comes rainy season, we get problems especially from the Muda river when nutrient flow into the sea and you get a eutrophication and fishes got killed. That perhaps do not seem important to the land and paddy farmers but it affects other sectors like the fishing industry. We need to look at things on a bigger scale and across sectors.
3. Composting seems the most viable method but then who wants to take the lead? It should be the government (through their agencies like MARDI). Maybe they can set up the composting plant to help farmers that will benefit everyone?
Prof Dato’ Zulfigar: I totally agree with you with respect to Kedah itself and also by looking at some of the ways that paddy planting is being practiced now and the type of paddy that we are using, to develop strains that are more efficient in term of composting. I agree that MARDI should be looking at some of these issues. I think Malaysia government should look at it overall.
Euston: Maybe Penang Institute can have a workshop on cultural practices and changing mindset, the role of government (policy). There are some cultural practices that we are only touching on the surface, but there are actually many more. We can gather all these things and have a good discussion and see whether the government is aware of such thing and if they are aware, are they doing something, what are those things and are they effective or not, and are there new directions that we can think of.