Measuring global monetary damages from particulate matter and carbon dioxide emissions to track sustainable growth

An integrated framework that tracks global stocks and flows of natural capital is needed to assess sustainable economic growth. Here, we develop a set of globally comprehensive monetary damages from particulate matter air pollution and greenhouse gas emissions in 165 countries from 1998 to 2018. Our results show that pollution intensity began to rise after a decade during which the global economy became less pollution-intensive from the late 1990s until the Great Recession. Larger economic production shares and higher pollution intensity in China and India drove this change. Deducting pollution damage from output from the late 1990s until the Great Recession yields higher growth estimates. After the Great Recession, this adjustment for pollution damage attenuated growth. We show that modeling monetary damages instead of physical measures of environmental quality affects inferences about sustainable development. Further, the monetary damages from exposure to particulate emissions peak earlier in the development path than damages due to carbon dioxide emissions. Monetary damages peak later than physical measures of both pollutants. For carbon dioxide, per capita emissions maximize at just over 60,000 dollars while monetary damages peak at nearly 80,000 dollars. In 2018, all but two countries were below this income level. Our results suggest that the global economy is likely to exhibit rising damages from particulates and carbon dioxide emissions in the years to come as nations grow and develop. Monetary damages from exposure to particulate matter and carbon dioxide emissions peak later on countries' development path than total emissions and concentration and may, therefore, make better sustainability metrics according to an analysis of air quality and economic data of 165 countries.