Abdullah, A. M.

Abdullah, R.

Alias, M. A.

Awang, M.

Hassan, M. N.

Muda, A.

Othman, J.

Othman, M. S.

Universiti Putra Malaysia Institutional Repository

FOR Category F20100: Social SciencesTHE ECONOMIC EVALUATION OF AIR POLLUTIONIMPACTS AND CONTROLM.N. Hassan, M.Awang, R. Abdullah, M.S. Othman,1. Othman, M.A. Alias, A.M. Abdullah and A. MudaFaculty of Science and Environmental StudiesUniversiti Putra Malaysia, 43400 UPM, Serdang, Selangor,MalaysiaKeywords: air pollution, haze, damage costs, abate-ment, optimality, policy.IntroductionSouth East Asian countries were badly' affected by smokehaze caused by land and forest fires from July to October1997. Since 1980, six major haze episodes were officially re-ported (Hassan et al. 1998a). The 1997 haze episode was theworst ever experienced by the country. The worst hit areawas in Kuching during the periods of 16 to 28 August and 11to 26 September 1997. For the country as a whole, the worsthaze occurred during 11 to 26 September 1997. The haze be-gan to retreat and the intensity has reduced from around 2October for Sabah, 29 October for Sarawak and 30 October1997. The severity and extent of the smoke haze pollutionwere unprecedented, affecting some 300 million peopleacross the region. Among the important sectors severely af-fected were air and land transport, shipping, construction,tourism and agro-based industries. The haze pollution had.also resulted in considerable health impacts to the people andthe long-term health effects are yet to be determined. Thisproject provides some preliminary estimates on the economiccosts of haze-related damages to Malaysia.Materials and MethodsThe study reviews existing methods of quantifying and- evaluating the damage cost of air pollution and assessing theapplicability of these on the Malaysian environment. Theevaluation was based on the concept of Total EconomicValue (TEV) of a resource. TEV consists of use value (UV)and non-use value (NUV). Use values can be broken downinto direct use value (DUV), indirect use value (IUV), andoption value (OV) or potential use value. Various methodshave been used to estimate the damage costs of air pollutionparticularly those that are related to exposure of high level ofsuspended particulate matter (Hassan et al. 1998a, b, c).Results and DiscussionEffect on Health:. One practical measure related to the effecton production is the value of human output lost due to illhealth or premature death. Those people exposed to the hazeface health threatening impacts. The signs and symptoms ofthe adverse effects of the haze include itchy sensation in thethroat, and coughing, difficulty in breathing and nasal con-gestion, painful and watery eyes, runny noses and cold at-tacks, itchy skin, and chest pain. The approach used to obtainthe quantitative health damages is by using a dose responsefunction which was developed earlier by Ostro to provide arelationship of how much illness does a given dose of hazepollution cause impacts to health. The health effects due tohaze or suspended particulate matter that were assessed in-clude respiratory hospital admission,emergency room visit,restricted activity day, bronchitis in children, asthma attacksfor adults and children, and chronic bronchitis. Preliminaryassessment has shown that the total health effects due to the1997 haze episode were estimated to be around RM129 mil-lion with a lower bound estimate of RM36 millions andhigher estimate of RM258 millions.Effect on Production: The haze can result in various produc-tion losses of economic activities including a reduction incrop yields resulting from reduced sunlight; a reduction infishing effort due to reduced visibility; a reduction in indus-trial and commercial activity due to delays in transportinginputs and outputs; loses incurred by the tourism industry;and losses incurred from airport closures due to poor visibil-ity.Aggregate Economic Value of the Impacts of Haze: The es-timated value of the haze damage to Malaysia during themonths of July to October 1997 was estimated to beRM794.3 million. Some of the estimates were undervaluedand thus have been reassessed. These include the estimateson the impacts of haze on health, aviation industry and theabatement costs incurred. The new estimate on the impacts of1997 haze was around RM913.91 millions. These includeshort-term health damages (RM129 million), industrial pro-duction losses (RM393.5 million), tourism industry losses(RM318.5 million), airline and airport losses (RM21.81 mil-lion), fishing decline (RM40.6 million), and expenditure onabatement in terms of cloud seeding, fire fighting facilitiesand extra surveillance by monitoring agencies (RMlO.5 mil-lions).ConclusionsPreliminary assessment has found that air pollution in Ma-laysia is increasingly transboundary in nature. The 1997 hazewas a clear case of the effects of forest fires from a neigh-bouring country. This is a classical external effects in whichthe activity of one country gives an effect to another countryin which that effect was not accounted for in the pollutingcountry. This study has shown that the external costs of airpollution due to haze was significant. Preliminary estimatesof the 1997 haze impacts were around RM794 million. Thisstudy has provided a higher value of around RM913 million.These estimates are still preliminary and subject to a morethorough and rigorous evaluation.ReferencesHassan, Mohd Nasir, Muhamad Awang, Mohd Shahwahid HajiOthman, Mohd Azahan Alias and Jamal Othman. 1998(a). Thedamage costs of haze episodes in Malaysia - concepts and em-pirical studies. In: Proceedings of the National Symposium on theImpact of Haze, 21 April 1998 (ed: Sheikh Omar Abdul Rahman,Muhamad Awang, Fatirnah Yusoff, Mohd Nasir Hassan, MohdShahwahid Hj. Othman and Nordin Mohamed Mustapha). Uni-versiti Putra Malaysia. p. 8.1-8.41.Hassan, ~.N., Awang, M., Abdullah, R., Othman, M.S.H., Othman,J., Alias, M.A., Kuang, D., Abdullah, A.M., Muda, A. andChong, T.L. 1998(b). The Damage Costs of Haze Episodes inMalaysia - Concepts, Empirical Studies and Improvement Poli-cies. The Regional Workshop on Transboundary Pollution fromFires: Haze Impacts on Health. 27 October 1998. Universiti Pu-tra Malaysia, Serdang.Hassan, M.N., Awang, M., Abdullah, R., Othman, M.S.H., Othman,J., Alias. M.A.. Kuang, D., Abdullah, A.M., Muda, A. andChong,. T.L. 1998(c). The Damage Costs of Haze Episodes in~alaysla - Concepts, Empirical Studies and Improvement Poli-cies. NElTLAP Regional Workshop on Multimedia Training Re-sources. IS - 17 December 1998. Bangkok, Thailand.Supported by IRPA Grant 08-02-04-0070347

The economic evaluation of air pollution impacts and control

http://psasir.upm.edu.my/43141/1/The%20economic%20evaluation%20of%20air%20pollution%20%20impacts%20and%20control.pdf

The economic evaluation of air pollution impacts and control

Abstract

Similar works

Full text

Available Versions

Universiti Putra Malaysia Institutional Repository