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15 Jan 2019

Thai Economy

Economic Costs of Bangkok Air Pollution Preliminarily Estimated to be at Least THB2.6 Billion (Current Issue No.2955)


             Greater Bangkok was last hit by the high level of hazardous dust particles at the end of 2017 through to the beginning of 2018. Air pollution blanketed capital again in January 2019, with the prospect of prolonged unhealthy air quality levels[1]. This problem and the impacts of global warming or climate change are important issues that warrant close monitoring. Although it is relatively difficult to assess their impacts on the Thai economy, we at KResearch have attempted to do so, based on a number of assumptions, as follows:

          KResearch view that impacts of the high level of hazardous dust particles in Greater Bangkok are seen in the following:

  1. Opportunity cost incurred from health issues:  This includes treatment expenses for an allergic reaction and respiratory diseases, as well as air pollution masks. Although such expenses will benefit related businesses, consumers will incur opportunity cost because they could have used those expenses for something else.
  2. Opportunity cost incurred from changes in travel plans of foreign tourists: Foreign holiday makers intending to visit Bangkok may change their travel plans to other destinations in Thailand. This scenario may not affect our tourism overall, but if the air pollution problem persists, such international tourists may decide to spend their holidays in other countries instead. In this case, Thai tourism might be adversely affected.  Bangkok is one of Thailand's most important tourist destinations, welcoming approximately 5 million Thai and foreign tourists/month and generating about THB80 billion/month in revenues for travel-related businesses.

              Based on a calculation timeframe of not more than one month, beginning at the end of 2018, we have preliminarily assessed that such opportunity costs have reached at least THB2.6 billion, though the entire magnitude of their impacts depends on the duration and severity of air pollution and remediation actions. The government has already introduced mitigation measures to tackle the air pollution problem at hand, though short-to long-term solutions may require a concerted effort from all parties.

[1] According to the Pollution Control Department, fine particular matter with a diameter of less than 2.5 micrometers (PM2.5) exceeded the safe level of 50 micrograms/cubic meter of air. ​