Tag Archives: air pollution

The Externalities of Urban Development

Should urbanization and development be always greeted with open arms? Here’s a personal account of the externalities of urban development.

Early this morning as I try to enjoy the refreshing light of dawn in our porch and wait for the sun to shine, I expected to breathe the fresh air to fill my lungs and get ready to face another day. But I was greeted by the putrid smell of methane, presumably coming from a neighbor’s pig business, a block away from home. They buy and hold a large number of pigs and cows to be butchered in nearby market that supplies the increasing meat demand of a growing population in the city. Occasionally, someone surreptitiously leaves a herd of goats to graze at the vacant lot next to our house, taking advantage of the fresh grass shoots that spring up whenever I have somebody mow down the tall cogon grasses that easily burn when withered and dry. In the past, I have to frantically douse the grass fire that pose hazard to our house. And the buffer of mowed area of about five meters lessens the risk. But then again, this herd of goats add stench to the already foul air because of their excrements. Their persistent, irritating calls to each other is a distraction to my writing mood.

This scenario is quite different when we settled in this place 15 years ago. The place was quiet and generally rural. I can breathe fresh air and have a good sleep in the sleepy afternoon – deep slumber in a quiet environment. Only the sweet sound of chirping birds are audible. I long for this kind of atmosphere, but here I am suffering the externalities of so-called urban development.

Indeed, now we have piped-in water, electricity that powers up different appliances that provide information and entertainment, can easily access a mall where I spend a large sum of hard-earned money, modern communication gadgets that rapidly get outmoded as new, more pricey ones arrive with better designs or more ringtones than the previous one, a washing machine that replaced manual clothes washing, an air conditioner to cool off hot, humid days in a concrete house, among others. All these “conveniences” become desired targets of what I call the “active scavengers” – people who come to your house and pick anything they want when you’re away. Once, these guys were rarely a complaint.


As more people came in and populate the city, the poorer the quality of life had become for me. I, therefore, list down the price of increased urbanization to the general environment below based on this musing:

  1. Poor air quality
  2. Noise pollution
  3. More expenses to keep up with the demands of modern living
  4. Increased threat to life and property

This list of the externalities of urban development should be long but just to put the point across,  these things made a major impact to the way I live. Are there things I could do to mitigate the effects of these externalities that lower the quality of life in the once peaceful place I used to live? As a thinking animal, adaptation takes the form of fight or flight. I can do something actively to change the environment, or escape the undesirable situation. Correspondingly, the ill effects of externalities listed above can be mitigated thus:

  1. Petition that the livestock holding station be located somewhere else, away from the residential houses
  2. Have my room fitted with sound proofing
  3. Buy only what I really need or live simply
  4. Secure the property area with burglar proof fences

Once, a professor from a British university visited our place. He talked about pollution. What really caught my attention was when he said that in many cities in England, they would like to step back in their development because of the high levels of lead found in the hair of young children. They were exposed to large levels of lead from petrol in the air because of a busy thoroughfare.

Where does this take us? This just means that urban planners must see to it that optimal conditions, not maximal, are maintained for the citizen’s greatest benefit. Urbanization and development must be taken with caution and good planning.

© 2013 December 15 P. A. Regoniel

Economic Valuation: What is Change in Income Technique?

One of the interesting topics of environmental economics is economic valuation. What is economic valuation and how does it work? What is change in income technique? This article explains these concepts.

The Meaning of Economic Valuation

Economic valuation entails imputing monetary value to natural and environmental resources that were once regarded free. This is because everyone thought that natural and environmental resources are inexhaustible.

Background on the Rise of Environmental Economics

It was not until around the 1960s, during the height of the industrial revolution, when people realized that natural resources like clean air has value attached to it. Although air may be inexhaustible, its quality can be compromised. Polluted air is associated with various diseases of the respiratory system thus entail cost.

Air is consumed by everyone, and anything that is being consumed is a good. A good can be represented by money.  But the amount of money that corresponds to, say, a liter of fresh air, is not easily determined. Unlike other goods found in the market, air is neither sold nor bought. But we know for sure that clean air is a valuable resource that, just like any resource that we consume, provides benefit to everyone. Clean air is one important good that man could not do without.

The air people consume (by inhaling it in their lungs and deriving oxygen to burn food hence release energy), just like any good, exists at various levels of quality. Air of good quality provides greater benefit to people than air of poor quality. Air of poor quality or polluted air can cause different kinds of illnesses. Thus, a good of excellent quality provides greater benefit to consumers than a good that is of inferior quality.

Why is it necessary to assign monetary value to clean air? The main purpose of assigning value is to be able to manage this important natural resource.  Unless monetary value is given to it, people tend to undermine its importance as anyone could get it free. At best, the value of a consumed good like clean air can only be estimated. This can be done through indirect means.

In environmental economics, one of the tools used in valuing natural resources such as air is the change in income technique. How is this economic valuation tool used?

Change in income technique is discussed in greater detail below using air as an example to demonstrate how this valuation technique works.

Change in Income Technique

In today’s civilized cities, it is expected that some degree of air pollution exists. The value of the ambient air, therefore, lies within a range of air quality, i. e., clean air to highly polluted air. Correspondingly, clean air will be valued more by people than polluted air; but how much will that be?income

Since the value of clean air could not be directly measured, this can be valued indirectly by looking into the change in people’s income due to loss of work from ill health, premature illness or death resulting from polluted air. If the quality of air is improved, there will be improvement in health, illnesses are reduced or avoided, and premature death is prevented.

Therefore, the value of air improvement is equal to the difference in income between people living in a polluted air environment and in another location or state of  better air quality. It is assumed that more income will be gained by people due to better health achieved in a locality with cleaner air. Cleaner air environment is associated with healthier people who are able to do more work, thus more income gained.

Use of the Valuation Technique: Comparing Costs and Benefits

How can the quality of air be improved so that people will gain more income?

This can be done by formulating and implementing pollution control regulations to limit, reduce or eliminate the source of pollution. But the implementation of pollution control regulations entail cost in terms of the personnel required to implement it, equipment to monitor emissions, advocacy through information and education campaign, among others.

If income increases after implementation of pollution control regulations, then it is now possible to compare the cost and the gains. A cost-benefit analysis can then be made. If benefit (B) in terms of increased income far outweigh the cost (C) of implementing pollution control regulations, then the cost of implementing pollution control regulations is justified.

These scenarios may be represented by the generalized equations of cost and benefit below.




It will be desirable to attain condition 2 but the outcome may depend on a given time frame of assessment. It is possible that either condition 1 and 3 may be that outcome during the early stage of implementation of pollution control regulation.

Change in income therefore is a useful economic valuation tool that can be used to measure the relative value of air quality. Its application is straightforward, although a strong link must be established between air quality and health and vice-versa.

Related Reading

What is the value of natural resources?

What is environmental economics?

© 2013 January 31 P. A. Regoniel