Air, land, and water pollutants and public health expenditures: Empirical data from selected EU countries in the transport sector

Abstract

The increase in economic activity, particularly in transport, leads to a significant increase in emissions of pollutants, such as ammonia, arsenic and cadmium, at the European Union (EU) level. This can seriously impact human health and, consequently, public health spending. Based on data from 15 European Union countries from 1992 to 2020, a panel co-integration approach is used to study these pollutants' short- and long-term co-movements and per capita health expenditure. The results show a long-term relationship between ammonia, arsenic and cadmium emissions and per capita health spending, as they are panel-cointegrated. Ammonia and cadmium emissions exert a statistically significant positive effect on health expenditure in the short run, and arsenic emissions have a statistically significant positive impact in the long run. The forecast assessment of reductions in health spending resulting from policies to reduce emissions of air, land and water pollutants, such as ammonia, arsenic and cadmium, from the transport sector supports investments in its policies that reduce pressure on health spending. The reduction in annual healthcare expenditure is greater when these reductions are made sooner and more severely. Indeed, varying the reduction in emissions for each pollutant by 10% and 100%, respectively, from the first year for all countries over a 3-year period results in an average annual reduction in health spending of 2.05% and 51.02%, respectively. However, if we wait until the third year, the annual reduction is only 0.77% and 17.63% respectively.

Keywords: Health expenditures; Panel co-integration; Pollutants; Public policies.