PM2.5 Pollution: Health and Economic Effect Assessment Based on a Recursive Dynamic Computable General Equilibrium Model

Abstract

At present particulate matter (PM₂.₅) pollution represents a serious threat to the public health and the national economic system in China. This paper optimizes the whitening coefficient in a grey Markov model by a genetic algorithm, predicts the concentration of fine particulate matter (PM₂.₅), and then quantifies the health effects of PM₂.₅ pollution by utilizing the predicted concentration, computable general equilibrium (CGE), and a carefully designed exposure–response model. Further, the authors establish a social accounting matrix (SAM), calibrate the parameter values in the CGE model, and construct a recursive dynamic CGE model under closed economy conditions to assess the long-term economic losses incurred by PM₂.₅ pollution. Subsequently, an empirical analysis was conducted for the Beijing area: Despite the reduced concentration trend, PM₂.₅ pollution continued to cause serious damage to human health and the economic system from 2013 to 2020, as illustrated by various facts, including: (1) the estimated premature deaths and individuals suffering haze pollution-related diseases are 156,588 (95% confidence intervals (CI): 43,335–248,914)) and six million, respectively; and (2) the accumulated labor loss and the medical expenditure negatively impact the regional gross domestic product, with an estimated loss of 3062.63 (95% CI: 1,168.77–4671.13) million RMB. These findings can provide useful information for governmental agencies to formulate relevant environmental policies and for communities to promote prevention and rescue strategies.