That’s about 3.3% of global gross domestic product, or $2.9 trillion per year, according to a report from Greenpeace Southeast Asia and Center for Research on Energy and Clean Air.
China, the US and India bear the highest economic cost of soaring pollution, at an estimated $900 billion, $600 billion and $150 billion a year, respectively.
Air pollution continues to harm billions of people on a daily basis, despite efforts by some countries and companies to push for greater use of renewable energy and cleaner fuels.
Particles thrown off by fossil fuel use account for 4.5 million premature deaths each year around the globe, including 1.8 million in China and a million in India, the researchers found.
“Every year, air pollution from fossil fuels takes millions of lives, increases our risk of stroke, lung cancer and asthma, and costs us trillions of dollars," said Minwoo Son, clean air campaigner at Greenpeace East Asia. “But this is a problem that we know how to solve, by transitioning to renewable energy sources, phasing out diesel and petrol cars, and building public transport."
Phasing out existing coal, oil and gas infrastructure and transitioning to renewable energy is required to avoid the worst impact of climate change, Greenpeace said. In the absence of efforts to curb greenhouse gas emissions, the earth could warm by 2 degrees Celsius by 2050, cutting global GDP by 2.5% to 7.5%, Oxford Economics said in a November report.
The financial cost of dealing with polluted air is the result of respiratory and non-communicable diseases, as well as an economic valuation of the years of life lost through premature death, Greenpeace said. Deaths of children and young people bring an economic cost through lost contributions to society and economy, which can be large, it said.
Compared to other pollutants such as ozone and nitrogen dioxide, the PM 2.5 leads to the greatest health impact and cost due to increased work absences, while nations with large populations typically have a heavier absolute cost burden, according to the report. In 2019, about 91% of the global population lived in places where levels of air pollution exceeded guidelines set by the World Health Organization.
The global cost for 2018 was $2.9 trillion, the report estimated.
The 44-page report breaks down the global burden of fossil fuel-driven air pollution—measured in economic costs and premature deaths—by type of pollutant and by country.
Each year the global economy takes $350 billion and $380 billion hits from nitrogen dioxide (NO2)—a byproduct of fossil fuel combustion in vehicles and power plants—and ozone, respectively, according to middle-ground estimates.
By far the most costly pollutant is microscopic fine particulate matter, which accounts for more than two trillion dollars per year in damages, measured in health impacts, missed work days and years lost to premature death.
The global breakdown for premature deaths each year was 500,000 for NO2, one million for ozone, and three million for PM 2.5.
Some 40,000 children die every year before their fifth birthday due to PM 2.5, which also leads to two million preterm births annually and twice as many cases of asthma.
PM 2.5 particles penetrate deep into the lungs and enter the bloodstream, causing cardiovascular respiratory problems.
In 2013, the World Health Organization classified it as a cancer-causing agent.
Middle-range estimates of the number of premature deaths stemming from fossil fuel pollution include 398,000 for the European Union, 230,000 for the United States, 96,000 for Bangladesh, and 44,000 for Indonesia.
Also among the countries taking the biggest economic hit each year are Germany ($140 billion), Japan ($130 billion), Russia ($68 billion) and the UK ($66 billion).
Globally, air pollution accounts for 29% of all deaths and disease from lung cancer, 17% from acute lower respiratory infection, and a quarter from stroke and heart disease, according to the WHO.
The new report used global datasets for surface-level concentrations of the three main pollutants analysed, and then calculated health and cost impacts for 2018.
Estimates of PM 2.5 and NO2 concentrations were based on Earth observation instruments on two NASA satellites that monitor aerosols in the atmosphere.
Deaths, years of life lost and years lived with disability due to PM 2.5 exposure are drawn from the Global Burden of Disease, published in 2018 by PNAS.