The environmental cost of water pollution in Chongqing, China

Chongqing is a heavily polluted industrial megacity in China. We have estim ated the environmental cost of water pollution in Chongqing. Limiting our i nquiry to the resource cost, i.e. real resources spent or production possib ilities foregone because of water pollution, our estimate equals 1.2 per ce nt of Chongqing gross product, with a subjective 95 per cent confidence int erval of (0.9-1.5). Damage to agriculture constitutes the largest share of costs, 56 per cent, while damage to health and damage to industry make up 2 0 per cent and 18 per cent, respectively. The cost estimate of 1.2 per cent , which employs the human capital approach, is sensitive to the valuation o f statistical lives. A calculation using willingness-to-pay for avoiding pr emature death sets the total cost at 4.3 per cent of Chongqing gross produc t.