Economics: The 150 Billion Dollar per Year Problem
by Donald P. Rozenberg, Ph.D., July 2006

One can argue that the costs of particulate pollution due to woodsmoke exceed $150 billion dollars per year. This page will develop that argument.  

The argument was inspired by the assertion that the the Clean Air Act of 1970 saves $650 billion dollars per year that appeared on page 504 of "Collapse" by Jared Diamond2. He arrived at that figure by taking the estimated number of lives saved as a result of the Clean Air Act and multiplying by $5 million which is the figure he uses for the "Value of a Single Life" (VSL).

Using that methodology, one could say that particulate pollution in the form of wood smoke costs $150 billion dollars per year from lost of life.

The above calculation is based on (1) the estimate by Joel Swartz that 60,000 premature deaths  in the United States are caused by Particulate Pollution per year,  (2) the estimate that approximate 50% of the the Particulate Pollution is wood smoke, and (3)  the suggestion by Swartz the effects of Particulate Pollution is linear, i. e., increase the amount of pollution by x percent and the number of deaths increase by x percent.  That yields 30,000 premature deaths in the US per year traceable to wood smoke.  Multiply that figure by the $5 million, the VSL.

There are, of course, many studies suggesting ways to estimate VSL and not surprisingly there is a wide range of figures that result.  In fact, I have seen numbers ranging from $1 million to $8 million.  See Brannon1 for a very intelligible survey (pdf 112KB).A section of his paper entitled "Is there a Consensus" he notes (1) Kip Viscusi of Harvard, one of the leading authorities in the field concluded that the number was closer to $7 million, (2) Leeth and Ruser estimate a VSL in the range of $2.6 to $4.7 million, and (3) The Environmental Protection Agency currently uses a mean value of $6.3 million for its cost-benefit analysis,  and  (4) Every regulation issued by the EPA that spent less than $8 million to save a life has been approved.

Note that the above argument does not take into account any costs associated with medical expenses or lost wages due to illness induced by the pollution For a look at some of those issues see Societal Costs.

An interesting side observation is that Diamond's figure of 130,000 deaths per year due to air pollution suggests that Particulate Pollution accounts for 46% and wood smoke accounts for 23%.  Those cozy evenings in front of the fire with a glass of wine are indeed killer evenings.

1.  Brannon, James Isaac, "What is a Life Worth?" . Regulation, Vol. 27, No. 4, pp. 60-63, Winter 2004 ,

What is a Life Worth?
University of Wisconsin - Oshkosh
An unpleasant but necessary job of policymakers is to place a value on saving a human life. Because society has limited resources that it can spend on health and safety improvements, it should obtain the greatest benefit for each dollar spent, and ascertaining an appropriate value is necessary to that effort. As one would expect, the correct numerical value to place on a life, typically called the value of a statistical life, or VSL, is a matter of great controversy. Hundreds of analysis using widely varying methodologies have been conducted to determine this value. Despite their differences, most of the studies center on one basic idea: The VSL should roughly correspond to the value that people place on their lives in their private decisions.

2.  Diamond, Jared. Collapse How Societies Choose to Fail or Succeed.  New York: Viking, 2005

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