The Impact of Water Quality on GDP Growth
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World Bank, Washington, DC
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Declining water quality can impact the
economy in various ways. Impacts can be found in the health
sector, where labor productivity can be affected, in
agriculture, where the quality and quantity of food produced
can be reduced, and in tourism, real estate,
aquaculture/fisheries and other sectors which rely on
environmental quality and ecosystem services. Despite these
well-known impacts, finding economy-wide affects of water
quality on economic activity can be elusive. In this paper
we attempt to fill this gap by using a conventional
empirical approach in contemporary environmental economics
and new data on economic activity and water quality for
nineteen countries from 1990-2014. The authors find that
when rivers become very heavily polluted, regions downstream
see reductions in economic growth, losing between 0.8 and
2.0 percent of economic growth. These losses imply that in
many places, the costs of environmental degradation are
severely under-estimated and well above efficient levels.
Palabras clave
WATER QUALITY, ECONOMIC GROWTH, WATER POLLUTION, WATER RESOURCE MANAGEMENT, AGRICULTURAL PRODUCTIVITY, BIOLOGICAL OXYGEN DEMAND, AQUACULTURE, TOURISM