Air pollution seen reducing China's economy 2.5% by 2060

[LONDON] Air pollution may reduce the size of China's economy as much as 2.5 per cent by 2060 by extending worker sick days, damaging crops and increasing health care costs, according to a new report that urges governments to enact tougher environmental laws.

Pollution cost about US$21 billion in 2015 globally, a figure that's set to rise more than eight-fold to US$176 billion because of growth in countries including China and South Korea, according to the Organization for Economic Cooperation and Development.

The potential impacts of poor air quality "are very significant and underscore the need for strong policy action," said the Paris-based OECD, which advises more than 30 developed nations.

China, India and Uzbekistan are set to suffer some of the worst losses, since they have growing cities where people are increasingly exposed to power plant and traffic emissions, the report said.

China's economy will be hit harder than India's by pollution because of differences in household savings rates and demographics, which will have a greater impact on productivity and health spending, the organization said.

Globally, the number of sick days caused by air pollution will more than triple to 3.7 billion in 2060, from 1.2 billion in 2015, according to the report.

BLOOMBERG