Introduction: Over recent decades, climate change and environmental degradation have become major challenges to sustainable development and human well-being. Rising temperatures, more frequent high and low temperature extremes, changing precipitation patterns, and recurrent environmental shocks have altered production systems, labor productivity, and public expenditures across countries. Simultaneously, air pollution (particularly, exposure to particulate matter and ground-level ozone) has increased the disease burden, premature death, and associated welfare costs, creating substantial economic and social pressures. Consequently, the relationship between environmental risks and human development has become a central concern for both researchers and policymakers. Despite their advanced institutional capacity, developed countries remain vulnerable to environmental shocks. Climate-related hazards and air pollution continue to reduce labor productivity, increase health expenditures, and weaken social welfare. However, these effects are not uniform across countries. Differences in economic structure (particularly, between net food-exporting and net food-importing economies) shape the transmission of environmental shocks. While the exporters are generally more exposed to climate-induced disruptions in agricultural production, the importers tend to be more vulnerable to disruptions in global food supply chains. Because conventional economic indicators cannot adequately reflect the health and welfare consequences of environmental risks, Human Development Index (HDI), which integrates health, education, and income dimensions, provides a more comprehensive framework for assessing the long-term effects of environmental pressures on human capital and sustainable development.
Materials and Methods: This study aimed at analyzing 41 developed countries (20 net food exporters and 21 net food importers) over the 2010-2019 period. A single empirical model was estimated to examine the effects of environmental health risks on the growth rate of HDI. The model included welfare costs of premature deaths attributed to high and low temperatures and ambient particulate matter and ozone, disease burden (DALYs), mean annual temperature change, emissions from fossil fuel combustion, environmental protection expenditure, environmental taxes, and out-of-pocket health expenditure. Except for mean annual temperature change, all variables were expressed as growth rates. After diagnostic tests, including the second-generation CIPS unit root test, multicollinearity, and cross-sectional dependence, the final specification was estimated using fixed effects with Panel EGLS and Panel-Corrected Standard Errors (PCSE) in EViews 12 and R, providing robust estimates in the presence of heteroskedasticity and cross-sectional dependence.
Results and Discussion: The estimation results indicated that the environmental health risks were consistently associated with lower growth in HDI, although the magnitude of these relationships varied across country groups; higher growth in the welfare costs of premature death attributable to high and low temperatures and ambient particulate matter and ozone was negatively associated with HDI growth in all three samples, with relatively stronger relationships observed among net food-exporting countries; similarly, increases in the disease burden (DALYs) attributable to climate- and pollution-related hazards were associated with lower HDI growth, although their relative intensity differed across the full sample, net food exporters, and net food importers. The estimated coefficients further suggested that higher mean annual temperatures and rising emissions associated with fossil fuel combustion were negatively associated with HDI growth, indicating that persistent environmental pressures might be associated with a gradual erosion of human capital. By contrast, the environmental protection expenditure and out-of-pocket health expenditure exhibited positive associations with HDI growth, suggesting that greater investment in environmental protection and health might strengthen resilience to environmental risks. Conversely, the growth of environmental taxes was associated with a modest short-term reduction in HDI growth, particularly among net food-exporting countries, reflecting possible adjustment costs during the transition toward greener production systems. Overall, the study findings suggested that the relationship between environmental risks and human development was conditioned by differences in countries’ trade structures, highlighting the importance of differentiated environmental and health policies for net food-exporting and net food-importing economies.
Conclusion and Suggestions: The study findings implied that policy responses should reflect differences in countries’ economic structures and food trade positions. For the net food-exporting countries, priority should be given to weather-indexed insurance, climate-resilient agricultural technologies, and stronger health systems to reduce the adverse consequences of environmental shocks on human capital. For the net food-importing countries, the policies aimed at diversifying food supply sources, maintaining strategic food reserves, and increasing environmental protection expenditure may strengthen resilience against external supply disruptions and pollution-related health risks. In addition, recycling revenues from environmental taxes into investments that improve energy efficiency and support cleaner production technologies may help mitigate their short-term adjustment costs while reinforcing long-term environmental objectives. More broadly, strengthening public health systems, environmental governance, and early-warning infrastructure can enhance countries’ capacity to adapt to climate-related risks. Although this study focused on developed economies, its findings might also provide useful policy insights for countries such as Iran, where improving climate adaptation, environmental governance, and health resilience could contribute to safeguarding human development and supporting long-term economic sustainability.