Air pollution cost India 8.5% of its GDP in 2013: study

A World Bank study shows that welfare costs and lost labour income due to air pollution amounted to 8.5% of India’s GDP in 2013


The report ranks air pollution as the fourth biggest fatal risk factor in the world. Photo: Mohd Zakir/ Hindustan Times
The report ranks air pollution as the fourth biggest fatal risk factor in the world. Photo: Mohd Zakir/ Hindustan Times

New Delhi: Measures to safeguard the environment are often considered to be economic spoilers as they entail putting restrictions on economic activity such as shutting a polluting factory or scrapping old vehicles. What is not taken into account while making these calculations is the cost imposed on people living in regions where pollution and environmental degradation is higher.

The cost of air pollution: strengthening the economic case for action, a joint study by World Bank and University of Washington, released on Thursday, might be useful in dispelling such a blinkered view on costs of controlling pollution.

According to the report, total welfare losses between 1990 and 2013 because of premature deaths from air pollution increased by 94%. Of this, damages from ambient PM 2.5 air pollution rose by 63% during this period to $3.5 trillion, while damages from household air pollution from cooking with solid fuels jumped almost four-fold to $1.5 trillion, adjusted to the purchasing power parity (PPP) in 2011.

In terms of welfare losses because of air pollution, India ranks second after China at $505.1 billion, or 7.69% of its gross domestic product (GDP), in 2013. Premature deaths due to air pollution in 2013 cost the global economy about $225 billion in lost labour income, or about $5.11 trillion in welfare losses, worldwide, according to the report.

India reported the highest loss in labour output in 2013 owing to air pollution globally at $55.39 billion (2011 PPP-adjusted), or 0.84% of its GDP. China followed close behind with $44.56 billion, or 0.28% of its GDP, lost due to forgone labour output.

Adding welfare costs and costs of lost labour due to air pollution puts India’s GDP loss at more than 8.5% in 2013. India’s GDP growth at constant prices was less than 7% in 2013-14. So air pollution alone might be offsetting the Indian economy’s growth efforts.

As is to be expected, increasing air pollution also entails large-scale suffering. The report ranks air pollution as the fourth biggest fatal risk factor in the world. Air pollution kills more people than tobacco, alcohol or drug use or unsafe sex in most countries. At 10.1% of total deaths globally, air pollution ranked fourth among the leading fatal health risks after metabolic risks, dietary risks and tobacco smoke.

For poorer countries, the impact of bad air quality has been worse. Low- and middle-income countries account for 93% of the deaths and non-fatal illness each year from air pollution. India and China also accounted for the highest number of deaths due to air pollution in 2013. But while China reported an increase of only 7% between 1990 and 2013, deaths due to air pollution in India during the same period increased by 34.5%.

The number of deaths due to air pollution was also higher for children and older people. In 2013, the mortality rate due to air pollution was 18 deaths per 100,000 people under age 5, which increased to 397 deaths per 100,000 in people over age of 70, according to the report. Disability-adjusted life years, too, were higher for young children and among adults aged 60-64 years. Disability-adjusted life year is a measure of overall disease burden, expressed as the number of years lost due to ill-health, disability or early death.

For young children, the majority of deaths resulted from lower respiratory infections, while for the older age groups, heart and pulmonary diseases were the major causes.

The report recognizes that lack of adequate information and data might be hampering the global battle against air pollution. It calls for using satellite-level data along with ground-based information to get a holistic picture of the extent of air pollution in a given region, while focusing on the importance of information at sub-national levels and beyond big cities. Many countries outside the developed world are also taking a lead on these issues. For example, the report cites a study which estimates deaths due to various sources of pollution such as industrial coal, traffic, biomass burning etc. in China. Whether or not automobiles are an important source of pollution was a much debated issue in India when the Delhi government brought in its odd-even scheme.

The long-term answer to such questions lies in putting in place a robust mechanism to understand air pollution and its sources.

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