The Clean Air Fund commissioned CBI Economics to conduct an eight-city analysis of the economic benefits of reducing nitrogen dioxide levels through the implementation of Clean Air Zones.
Air pollution impacts human health and the productivity of the workforce, which in turn impacts the economy. Analysis conducted by CBI Economics in 2020 estimated that clean air in line with the World Health Organisation’s (WHO) guidelines could deliver a £1.6bn boost to the UK economy each year.
Reducing nitrogen dioxide could deliver millions in additional economic value
A major eight-city analysis by CBI Economics in its Breathing Life series found that reducing nitrogen dioxide (NO2) levels in line with legal limits could deliver millions in additional economic value to selected cities in the UK. The introduction of Clean Air Zones (CAZs) was analysed in eight cities, with the economic benefit ranging from £0.5m in Portsmouth to £48m in London depending on the proposed scope of the CAZ, as well as the city’s demography and economy.
For instance, the proposed CAZ for London covers a much larger area than the other eight cities, is more densely populated and has a larger economy. Therefore the resulting economic benefit is larger than for smaller cities where the proposed CAZ covers a smaller area. However, when accounting for the size of the economy in each of the cities, the economic benefit is broadly similar.
This economic benefit is driven by an improvement in health outcomes associated with NO2 exposure. The analysis by CBI economics finds that the CAZ could prevent as many as 600 deaths in the capital and save 150 days spent in hospital in Birmingham. For individuals who work, this means more hours spent in work contributing to the economy.
For the first time, these numbers show how the new Clean Air Zones will be good for the health of residents and the local economy. By targeting the most polluted and neediest areas, the measures will make the city cleaner, greener and better off across the board. This is a great example of locally-led action to deliver on our national commitments to build back better on air quality.— Jane Burston, Executive Director, Clean Air Fund
Reducing nitrogen dioxide can benefit local economies
Vehicles are the largest contributor of pollution at roadsides, contributing 80% of the total. This means higher levels of NO2 are typically focused in high traffic areas within city centres.
Clean Air Zones have been found to be the most effective measure to reduce NO2 levels within the legal limits in the shortest possible time. As a result, the government has mandated several cities to implement CAZs, including London, Bristol, Birmingham and Greater Manchester.
CBI Economics analysis explored how targeted action to reduce NO2 levels by 5 μg/ m³ (10 μg/ m³ in London) could improve the health of the local workforce and add a boost to the economy in eight UK cities:
- Birmingham – could see an annual economic benefit of £2.7m due to increasing workforce participation by over 216,000 working hours.
- Bristol – could benefit from an annual economic gain of £1m and an additional 82,000 working hours due to a healthier workforce.
- Greater Manchester – the city-region could gain an annual economic benefit of £7.1m, including 160 fewer deaths and 350 hospital days saved.
- Liverpool – could see an annual economic benefit of £1.5m and an additional 113,000 working hours, due to a healthier workforce.
- London – an expansion of the current Ultra Low Emission Zone (ULEZ) could deliver an annual economic benefit of £47.7m and prevent 600 deaths and 1,300 days spent in hospital.
- Newcastle – could gain an annual economic boost of £0.6m and 54,000 additional hours of work as a result of fewer deaths and hospitalisations.
- Portsmouth – could benefit from an annual economic gain of £0.5m including an additional 43,000 working hours due to a healthier local workforce.
- Sheffield – could see an annual economic benefit of £1m, by increasing workforce participation by over 97,000 working hours.
This year sees the UK play host to COP26, an event which must act as a global calling card for more countries to target a net zero economy. Businesses have a big role to play, but so do each and every one of us. Acting environmentally responsible as individuals, communities and cities can help minimise our impact. Reducing air pollution is an urgent priority for public health in built up areas, but also over the longer-term, as we create more sustainable cities for the future.— Rain Newton-Smith, Chief Economist, CBI
What it means for business
Cleaner air within our major cities is an aspiration not only central to improving public health, but also a business-critical issue for firms. Congested city streets slow business operations and ultimately puts people’s health at risk. The loss of working hours in these eight cities alone runs into the hundreds of thousands.
This evidence by CBI Economics demonstrates that the implementation of a CAZ has the potential to deliver a large and permanent reduction of NO2 across UK cities, and has the potential to generate important economic benefits to residents.
A small reduction in NO2 levels could provide millions in additional economic value and prevent deaths and hospitalisations in the local workforce. It is evident that lower NO2 levels can be an engine for a healthier and more prosperous city.
