Working paper

How much does Europe pay for clean air?

Despite major progress, the cost of air pollution is still huge for the European Union

Publishing date
20 June 2024

Despite significant progress, air pollution still causes €600 billion in losses each year in the European Union – equal to 4 percent of its annual GDP. These costs stem from productivity losses such as increased absenteeism, the reduction of in-job productivity and harm to ecosystems. Air pollution costs are disproportionately high in eastern Europe and Italy, where losses are projected to remain above 6 percent of GDP until 2030. The EU’s 10 percent most-polluted regions suffer 25 percent of the burden of mortality attributable to air pollution. Measures against air pollution should be prioritised, not delayed, in these regions.

Promoting clean air boosts economic growth by €50 billion to €60 billion every year. The EU’s increasing commitment to cleaner air is reflected by a threefold increase in the funds allocated to promoting clean-air policies, from €7 billion annually for the period 2014-2020 to €25 billion annually for 2021-2027, notably supported by the Recovery and Resilience Facility (RRF). EU financial support must continue beyond 2026 when the RRF terminates.

The EU Ambient Air Quality Directive sends a strong signal but leaves loopholes: exceptions and postponements may jeopardise overall progress on cleaner air. Fossil-fuel consumption is one of the main obstacles to achieving clean-air targets. Yet fossil fuels subsidies were fourteen times higher than EU clean-air funds between 2014 and 2020, and are projected to remain five times higher for the years ahead. Ammonia, an important precursor of fine particulate matter mainly stemming from agriculture, is insufficiently regulated.

Effectiveness of clean-air policies is context-dependent. Identifying concrete actions for each region and quantifying the potential gains are required to accelerate the transition to cleaner air. Phasing out coal use in residential heating is most profitable in eastern Europe, while reducing industrial and agricultural emissions would reap more benefits in the north of Italy.

We gratefully acknowledge financial support from the Clean Air Fund ( for this research workstream.

To access the online annex for this working paper, please click here.

About the authors

  • Miquel Oliu-Barton

    Miquel Oliu-Barton is a non-resident fellow at Bruegel. He is also an associate professor of economics at Paris-Dauphine University. 

    Game theorist by training, Miquel has led numerous policy and scientific publications (Lancet, Lancet Global Health, Nature Communications, BMJ) that were cited in leading international media including CNN, Financial Times, New York Times and Le Monde. His work builds on multidisciplinary collaborations between scientists and policy-makers from different countries. At Bruegel, he is part of Europe’s governance team.

    Miquel graduated from the Ecole normale supérieure in mathematics, holds a Ph.D. from Sorbonne University, and was recently a visiting Professor at Yale University. He is fluent in English, French, Spanish and Italian.

  • Juan Mejino Lopez

    Juan is a Research assistant at Bruegel. He studied Economics (BSc) at the University of Salamanca, with one year Erasmus exchange at KU Leuven. He was granted a scholarship from Ramón Areces Foundation to pursue a MSc in Economics at the University of Warwick. In his MSc thesis he studied the relation between automation and offshoring in Spain, as well as automation impacts on the Spanish labour market.

    Prior joining Bruegel, Juan worked as economist at Cambridge Econometrics carrying economic analysis for different institutions such as ILO, UN or the European Commission. He also worked as research assistant at the University of Salamanca, creating a database to analyse institutional transaction costs. Juan was a football referee for 7 years in Spain.

    Juan is a native Spanish speaker and is fluent in English. He is currently learning French and Dutch.

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