How Air, Water, and Plastic Pollution Affect the Economy

Dealing With the Rising Costs of Pollution

Plastic bottles and polystyrene pollution floating in the water

Rosemary Calvert / Getty Images

The two biggest pollution problems impact air and water resources. Pollution cause billions in damage to the environment and health. One growing problem is pollution from plastics, which is damaging our food supply and even the air we breathe. 

Air Pollution

Air pollution kills seven million people each year, according to the World Health Organization. In 2013, those deaths cost the global economy $225 billion in lost labor. Around the world, nine out of ten people breathe highly polluted air.

In the United States, air pollution caused $131 billion in damages in 2011. It was less than the $175 billion in 2002. Those who become sick from pollution bear the most of the cost. In 2015, 133.9 million people suffered from unhealthy levels of air pollution. They are at greater risk of developing asthma, lung cancer, and respiratory problems. Research in 2018 found it's also linked to Alzheimer's and dementia. 

The costs also fall on school and work performance. A study found that air pollution lowered the productivity of pear packers in Northern California. Another study found that high pollution days made Chinese call center workers take more breaks. A third study found that high carbon monoxide levels led to more absences in Texas school districts.

The leading cause of air pollution is power generation. Coal-generated plants are the worst offenders. These are followed by oil refineries, oil and gas extraction, and coal mining. Other sources involve processes in industrial, chemical, and agricultural production. Ammonia and methane emitted from fertilizer and livestock combined with vehicle emissions to create airborne particulates. A 2016 study found that these agricultural emissions topped those from any other human-made source. 

The top air pollution components are sulfur dioxide, nitrogen oxides, ammonia, volatile organic compounds, and fine particulate matter. The most damaging is sulfur dioxide.

Climate change is worsening air pollution. Climate change exacerbates wildfires, which cause high particulate counts, by increasing drought conditions. In August 2018, smoke from western wildfires made Seattle and Portland the most polluted cities in the world.

In 1955, the federal government was concerned about combatting pollution. One of the most salient laws was the Clean Air Act of 1970, which allowed states to control motor vehicle emissions. Congress established the U.S. Environmental Protection Agency to implement these requirements. In 2009, President Barack Obama used the auto bailout to force automakers to improve fuel efficiency standards. In August 2015, the Obama administration launched the Clean Power Plan. The EPA set custom goals for each state to cut power plant emissions.

Unfortunately, the Trump administration is weakening the Clean Power Plan by allowing localities to set their standards. On March 23, 2018, the EPA announced that it would relax vehicle efficiency rules. On March 26, 2018, seven environmental groups sued the EPA for relaxing those standards.

Water Pollution

The EPA warns that 46% of U.S. streams, 21% of lakes, 18% of coastal waters, and 32% of the nation’s wetlands are polluted. Common contaminants are bacteria and heavy metals, such as phosphorus, mercury, and nitrogen.


Water pollution is caused by four major factors: untreated sewage, agricultural practices, global warming, and ocean acidification.

In August 2018, red algae bloomed off the southwest coast of Florida and created a state of emergency. The state has promised $1.5 million in emergency funding. Between 2004 and 2007, red tide clean-up efforts cost the state between $11,114 and $250,000 per event. The vapors increase hospital admissions by 50%.

Agricultural by-product runoffs pollute rivers, lakes, and oceans and cause algae blooms. Global warming raises water temperatures, creating ideal conditions for red algae to thrive in huge numbers.

Water pollution is costing the U.S. economy in these four key areas:

  1. Public health—Because of algae blooms, the cost to treat water from the Great Lakes in Minnesota, for instance, has risen by almost $4.00 per 1,000 gallons.
  2. Tourism—Almost $1 billion in tourism revenue is lost annually. Local economies that receive billions from tourists who like to visit reefs or engage in aquatic activities are being threatened by coral bleaching, algal blooms, and contaminated waters.
  3. Fisheries—Pollution and ocean acidification are damaging the $100 billion shellfish industry on America's West Coast. Coral bleaching has increased nearly fivefold in the past 40 years. The National Marine Fisheries Service estimates the commercial value of U.S. fisheries from coral reefs is more than $100 million.
  4. Real Estate—The EPA found that values of waterfront properties near polluted waters dropped by as much as 25%, compared to those situated by clean water.

To combat water pollution, the government must:

  1. Update the 1972 Clean Water Act and other local and state laws to reflect current conditions.
  2. Impose Pigouvian taxes.
  3. Increase funding for research into water pollution solutions, such as bioremediation. 

Plastic Pollution

Plastic pollution costs $13 billion in economic damage to marine ecosystems per year. This includes losses to the fishing industry and tourism, as well as the cost to clean up beaches. 

Plastic is popular because it is flexible, lightweight, and sustainable. If the plastic waste problem can be solved, plastic would be a superior form of packaging to cardboard, metal, or paper.

Plastic doesn't biodegrade. Instead, it disintegrates into microparticles that fish eat. When we eat fish, we eat the plastic as well. Scientists estimate that there are more microplastic particles in the sea than there are stars in the Milky Way.

Plastic leaches chemicals, including dyes, metals, and flame retardants. These are toxic to oxygen-producing micro-organisms, which produce 10% of the oxygen on the planet. When they die, they create dead zones that suffocate sea life.

Plastic pollution is caused by inadequate waste disposal. Globally, more than eight billion metric tons of plastic have been produced since its first large-scale use in the 1950s.  About 6.3 billion metric tons of that became waste. Only 9% has been recycled, and 12% has been incinerated. The rest has gone into landfills, rivers, and oceans. There, its durability, an asset in packaging, becomes a liability. It takes hundreds to thousands of years for plastic to degrade. 

On January 1, 2018, China stopped accepting used plastic for recycling. Most of the recyclables were contaminated, overwhelming China’s recycling facilities. As a result, many governments have simply ended their recycling programs. This will only make the plastic pollution problem worse.

Without China, recycling is too expensive for most cities. The European Commission urged its member countries to approve bans on single-use plastics. Worldwide, 127 countries have banned some, but not all, kinds of plastics.

The U.S. has proposed legislation that would put the responsibility for plastic waste management on producers. The law, if enacted, would establish a national Pigouvian tax on carryout bags and refund customers who return beverage containers. 

Many European countries are burning plastic in a growing number of waste-to-energy (WTE) plants. The plants use the heat to make steam to generate electricity. 

Frequently Asked Questions (FAQs)

How do you stop pollution?

Reducing or eliminating pollution requires a commitment to change on all levels of society: government policies, individual and household habits, and especially corporate and agricultural practices. The EPA has a set of suggestions for how to tackle pollution in several areas, including energy production, agriculture, and manufacturing.

How is heat a source of water pollution?

Higher-than-normal water temperatures cause pollution by straining the natural ecosystem. This kills fish and other organisms that aren't adapted to those temperatures; it also promotes the growth of parasites. These higher temperatures, which are known as "thermal pollution," can be caused by dams, water treatment centers, logging, and other industrial activities.

What is the leading cause of water pollution in the United States?

According to the Natural Resources Defense Council, agriculture is the leading cause of pollution in rivers and streams. It's also the second leading polluter of wetlands and the third-leading source of pollution in lakes. Major agricultural pollutants include pesticides, fertilizers, and animal waste.

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