It's time to strike balance between development, air pollution to minimise economic losses, health risks

From the ashen streets of the 19th century London to the smog-filled skies of modern-day Beijing, air pollution has been accompanied industrial growth through the centuries. Economic growth, while bringing prosperity to the people, has carried within itself a downside of adversely affecting human life and productivity. The former generally outweighs the latter, but these costs of development are still a cause for concern for developing nations around the world. According to a World Health Organisaion (WHO) report, nine in 10 people on the planet live with poor, even dangerous air. [caption id=“attachment_6757121” align=“alignleft” width=“380”] Representational image. AP[/caption] There are several ways in which air pollution adversely affect an economy: it costs a human life, reduces the worker’s productivity, and has economic costs due to loss of income. And since industrialised nations are more vulnerable to air pollution, more than 90 percent of the air pollution-related deaths occur in low- and middle-income countries, mainly in Africa and Asia. This implies that pollution creates a growing inequality between developing and developed nations. Air pollution is a major health risk in India as it is home to 15 of the 20 most polluted cities in the world. This imposes significant economic costs on its citizens. According to Indian Council of Medical Research database of DALYs (Disability Adjusted Life Years), in India, around 38 million years of healthy life were lost due to air pollution in 2017. DALYs for a disease or health condition are calculated as the sum of the years of life lost (YLL) due to premature mortality in the population and the years lost due to disability (YLD) for people living with the health condition or its consequences.

The economic cost of premature death and disability resulting in loss of income due to air pollution in India is estimated to be around Rs 3 lakh crore annually, which equals to 2.4 percent of the country’s Gross Domestic Product (GDP). The economic cost associated with the total DALY burden is estimated as the value of productivity loss. This is assessed by multiplying Gross State Domestic Product (GSDP) with the total DALY. A significant amount of this burden is borne by the northern and western part of the country with Maharashtra and Uttar Pradesh both accounting for over 20 percent of the country’s loss. Some of the major factors of poor air quality in these regions are coal-burning for thermal power stations, vehicles, waste burning and agriculture stubble burning.

The economic losses due to air pollution vary across the states depending on the level of their economic development. Figure 2 depicts that as states initially become richer, the loss due to air pollution rises. The losses for Maharashtra are higher than Uttar Pradesh, for instance. But as the income of these states rise even further, they experience a fall in their losses. This is visible among high per capita income states like Delhi, Goa, Chandigarh, Sikkim and Haryana. While the states in the country seem to be following an inverted U-shaped path in the economic losses due to air pollution as they develop, the cost of such development is evidently high. This nature of a relationship between economic growth and losses due to it through environmental degradation point to the benefits that can accrue through investments in improving air quality. (Amit Kapoor is Chair, Institute for Competitiveness & Editor of Thinkers. This analysis is presented in association with Institute for Competitiveness)