Publication: The Impact of Water Quality on GDP Growth: Evidence from Around the World
Loading...
Published
2019-12-10
ISSN
Date
2019-12-23
Author(s)
Editor(s)
Abstract
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.
Link to Data Set
Citation
“Desbureaux, Sebastien; Damania, Richard; Rodella, Aude-Sophie; Russ, Jason; Zaveri, Esha. 2019. The Impact of Water Quality on GDP Growth: Evidence from Around the World. © World Bank. http://hdl.handle.net/10986/33071 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Quality Unknown(Washington, DC: World Bank, 2019-08-20)Water quantity—too much in the case of floods, or too little in the case of droughts—grabs public attention and the media spotlight. Water quality—being predominantly invisible and hard to detect—goes largely unnoticed. Quality Unknown: The Invisible Water Crisis presents new evidence and new data that call urgent attention to the hidden dangers lying beneath water’s surface. It shows how poor water quality stalls economic progress, stymies human potential, and reduces food production. Quality Unknown examines the effects of water quality on economic growth and finds upstream pollution lowers growth in downstream regions. It reveals that some of the most ubiquitous contaminants in water, such as nitrates and salt, have impacts that are larger, deeper, and wider than has been acknowledged. And it traces the damage to crop yields and the stark implications for food security in affected regions. An important step toward tackling the world’s water quality challenge is recognizing its scale. The world needs reliable, accurate, and comprehensive information so that policy makers can have new insights, decision making can be evidence based, and citizens can call for action. The report calls for a paradigm shift that emphasizes safer, and often more cost-effective remedies that prevent pollution by combining smarter policies with newer technologies. A key message of Quality Unknown is that such solutions exist and change is possible.Publication The Nitrogen Legacy(World Bank, Washington, DC, 2019-12-10)The fallout of nitrogen pollution is considered one of the largest global externalities facing the world, impacting air, water soil and human health. This paper presents new evidence that nitrogen pollution in water is an important determinant of variations in human capital. Data from the Demographic and Health Survey dataset across India, Vietnam, and 33 African countries are combined to analyze the causal links between pollution exposure experienced during the very earliest stages of life and later-life health. Results show that pollution exposure experienced in the critical years of development from the period of birth up until year three – is associated with decreased height as an adult, a well-known indicator of overall health and productivity, and is robust to several statistical checks. Because adult height is related to education, labor productivity, and income, this also implies a loss of earning potential. Results are consistent and show that early-life exposure to nitrogen pollution in water can lower height-for-age scores during childhood in Vietnam and during infancy in Africa. These findings add to the evidence on the enduring consequences of water pollution and identify a critical area for policy intervention.Publication Salt of the Earth(World Bank, Washington, DC, 2019-12-10)Salinity in surface waters is on the rise throughout much of the world. Many factors contribute to this change including increased water extraction, poor irrigation management, and sea-level rise. To date no study has attempted to quantify impacts on global food production. In this paper we develop a plausibly causal model to test the sensitivity of global and regional agricultural productivity to changes in water salinity. To do so, we utilize several local and global datasets on water quality and agricultural productivity and a model which isolates the impact of exogenous changes in water salinity on yields. We then train a machine learning model to predict salinity globally in order to simulate average global food losses from 2000-2013. These losses are found to be high, in the range of the equivalent of 124 trillion kilocalories, or enough to feed over 170 million people every day, each year. Global maps building on these results show that pockets of high losses occur on all continents but can be expected to be particularly problematic in regions already experiencing malnutrition challenges.Publication Salt of the Earth(World Bank, Washington, DC, 2020-02)Salinity in surface waters is on the rise throughout much of the world. Many factors contribute to this change, including increased water extraction, poor irrigation management, and sea-level rise. To date no study has attempted to quantify the impacts on global food production. This paper develops a plausibly causal model to test the sensitivity of global and regional agricultural productivity to changes in water salinity. To do so, it utilizes several local and global data sets on water quality and agricultural productivity and a model that isolates the impact of exogenous changes in water salinity on yields. The analysis trains a machine-learning model to predict salinity globally, to simulate average global food losses over 2000-13. These losses are found to be high, in the range of the equivalent of 124 trillion kilocalories, or enough to feed more than 170 million people every day, each year. Global maps building on these results show that pockets of high losses occur on all continents, but the losses can be expected to be particularly problematic in regions already experiencing malnutrition challenges.Publication The Nitrogen Legacy(World Bank, Washington, DC, 2020-02)The fallout of nitrogen pollution is considered one of the largest global externalities facing the world, impacting air, water, soil, and human health. This paper combines data from the Demographic and Health Survey data set across India, Vietnam, and 33 African countries to analyze the causal links between pollution exposure experienced during the very earliest stages of life and later-life health. The results show that pollution exposure experienced in the critical years of development—from birth until age three—is associated with decreased height as an adult, a well-known indicator of overall health and productivity, and is robust to several statistical checks. Because adult height is related to education, labor productivity, and income, this also implies a loss of earning potential. The analysis begins within an assessment in India, where the data are more available, and is then extended to geographic settings including Vietnam and 33 countries in Africa. The results are consistent and show that early-life exposure to nitrogen pollution in water can lower height-for-age scores during childhood in Vietnam and during infancy in Africa. These findings add to the evidence on the enduring consequences of water pollution and identify a critical area for policy intervention.
Users also downloaded
Showing related downloaded files
Publication Digital Progress and Trends Report 2023(Washington, DC: World Bank, 2024-03-05)Digitalization is the transformational opportunity of our time. The digital sector has become a powerhouse of innovation, economic growth, and job creation. Value added in the IT services sector grew at 8 percent annually during 2000–22, nearly twice as fast as the global economy. Employment growth in IT services reached 7 percent annually, six times higher than total employment growth. The diffusion and adoption of digital technologies are just as critical as their invention. Digital uptake has accelerated since the COVID-19 pandemic, with 1.5 billion new internet users added from 2018 to 2022. The share of firms investing in digital solutions around the world has more than doubled from 2020 to 2022. Low-income countries, vulnerable populations, and small firms, however, have been falling behind, while transformative digital innovations such as artificial intelligence (AI) have been accelerating in higher-income countries. Although more than 90 percent of the population in high-income countries was online in 2022, only one in four people in low-income countries used the internet, and the speed of their connection was typically only a small fraction of that in wealthier countries. As businesses in technologically advanced countries integrate generative AI into their products and services, less than half of the businesses in many low- and middle-income countries have an internet connection. The growing digital divide is exacerbating the poverty and productivity gaps between richer and poorer economies. The Digital Progress and Trends Report series will track global digitalization progress and highlight policy trends, debates, and implications for low- and middle-income countries. The series adds to the global efforts to study the progress and trends of digitalization in two main ways: · By compiling, curating, and analyzing data from diverse sources to present a comprehensive picture of digitalization in low- and middle-income countries, including in-depth analyses on understudied topics. · By developing insights on policy opportunities, challenges, and debates and reflecting the perspectives of various stakeholders and the World Bank’s operational experiences. This report, the first in the series, aims to inform evidence-based policy making and motivate action among internal and external audiences and stakeholders. The report will bring global attention to high-performing countries that have valuable experience to share as well as to areas where efforts will need to be redoubled.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication The Container Port Performance Index 2023(Washington, DC: World Bank, 2024-07-18)The Container Port Performance Index (CPPI) measures the time container ships spend in port, making it an important point of reference for stakeholders in the global economy. These stakeholders include port authorities and operators, national governments, supranational organizations, development agencies, and other public and private players in trade and logistics. The index highlights where vessel time in container ports could be improved. Streamlining these processes would benefit all parties involved, including shipping lines, national governments, and consumers. This fourth edition of the CPPI relies on data from 405 container ports with at least 24 container ship port calls in the calendar year 2023. As in earlier editions of the CPPI, the ranking employs two different methodological approaches: an administrative (technical) approach and a statistical approach (using matrix factorization). Combining these two approaches ensures that the overall ranking of container ports reflects actual port performance as closely as possible while also being statistically robust. The CPPI methodology assesses the sequential steps of a container ship port call. ‘Total port hours’ refers to the total time elapsed from the moment a ship arrives at the port until the vessel leaves the berth after completing its cargo operations. The CPPI uses time as an indicator because time is very important to shipping lines, ports, and the entire logistics chain. However, time, as captured by the CPPI, is not the only way to measure port efficiency, so it does not tell the entire story of a port’s performance. Factors that can influence the time vessels spend in ports can be location-specific and under the port’s control (endogenous) or external and beyond the control of the port (exogenous). The CPPI measures time spent in container ports, strictly based on quantitative data only, which do not reveal the underlying factors or root causes of extended port times. A detailed port-specific diagnostic would be required to assess the contribution of underlying factors to the time a vessel spends in port. A very low ranking or a significant change in ranking may warrant special attention, for which the World Bank generally recommends a detailed diagnostic.Publication Global Economic Prospects, January 2025(Washington, DC: World Bank, 2025-01-16)Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.Publication Global Economic Prospects, June 2025(Washington, DC: World Bank, 2025-06-10)The global economy is facing another substantial headwind, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the ability to boost job creation and reduce extreme poverty has declined. Key downside risks include a further escalation of trade barriers and continued policy uncertainty. These challenges are exacerbated by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable international trade environment and scale up support for vulnerable countries grappling with conflict, debt burdens, and climate change. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To accelerate job creation and long-term growth, structural reforms must focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. Countries in fragile and conflict situations face daunting development challenges that will require tailored domestic policy reforms and well-coordinated multilateral support.