The air contamination caused by pollutant emission has to be regarded as welfare decreasing, leading to social costs.
Consequences are health damages that lead to health costss, material damages (e.g. concerning buildings) and valued damages of vegetation, including damage to forests, crop failure and effects on biodiversity.
Since these are external effects, they are usually not included in commodity prices and lead to efficiency and distribution problems.
Since 1991, the emissions of these air pollutants and the related damages could be reduced significantly. This remarkable success could be achieved through resolute environmental policy including legal requirement and other measures (e.g. mandatory use of air filters and catalysts, funding programs for new technologies).
In the course of the financial and economic crisis, emissions from air pollutants decreased particularly in 2009 compared to the preceding years. However, in 2010 economic activity caught up again leading to the only increase of costs in the entire observation period.
However, since then, no prominent reduction of pollutants has been achieved, and, therefore, only a minor reduction of the damage costs.