| This paper is a part of the project of the Shanxi Air Pollution Control Master Plan which is a cooperation project between Shanxi EPB(Environmental Protection Bureau)and NILU( Noway Air Research Institute) and is supported mainly by Norway. The aim of this paper is to analyze the damages caused by air pollution and to estimate the economic losses. In this paper, the damage mechanism of several pollutants is expounded in detail. The losses for health, vegetation, building materials and cleaning cost, the losses in Shanxi province are evaluated economically. The conclusion that the economic losses in Shanxi caused by air pollution are quite huge can be drawn out, in which the health losses is the main part. The total losses value is 7,583 million, which is 5 percent of Shanxi's GDP. Thus controlling the air pollution is not only an issue of the environment, but also of economic development. This paper would help people to comprehend the general extent of air pollution in Shanxi province and to provide a reference for the police makers and production managers for a harmonious development between nature and human being.
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