Urgent action on air pollution in India makes economic sense

Elisa Lanzi and Rob Dellink, OECD Environment Directorate

©AFP Photo/Prakash Singh

Air pollution in Delhi has been so bad this November that the Indian Medical Association declared a public health emergency. At more than 25 times the WHO recommended level, the pollution peak in India’s capital has been extraordinary. This is becoming increasingly common in Delhi and other cities around the world due to emissions from biomass burning, coal fire plants, agriculture and especially agricultural burning and diesel transport.

Dangerously high concentration levels of air pollutants, and especially of fine particles, cause an increase in asthma attacks and lung conditions. Alarmingly, air pollution is tied to longer-term chronic health problems, such as respiratory and heart diseases, premature and underweight babies, allergies and increasing incidences of cancer. All these lead to a sizable–and increasing–number of premature deaths and illnesses. According to the latest Global Burden of Disease study published in The Lancet, outdoor air pollution caused more than a million premature deaths in India in 2016, whose cost, according to OECD estimates, amounts to more than USD 800 billion. But that is not all: there is a range of other social costs associated with air pollution, such as costs related to pain and suffering, and costs to biodiversity and ecosystems.

Air pollution also exacts costs on the economy with additional health expenditures as well as lost work days, which affect labour productivity. And, agricultural productivity can also be severely affected by air pollution as high ozone concentrations and slow plant growth reduce crop yields with important economic consequences.

Strong policy action must be taken. According to projections by the OECD the population-weighted average concentrations of PM2.5–the finest, most harmful particles–are projected to increase threefold by 2060 if ambitious action is not taken. Premature deaths from being exposed to pollution are projected to increase up to five times. This is a staggering number, and represents up to a third of global projected deaths in 2060. Incidences of illness will similarly worsen. Lost working days will increase significantly, to levels equivalent to more than six million people missing work on a daily basis by 2060.

Market costs to the Indian economy are projected to increase eightfold to over USD 280 billion by 2060–this is more than 7% of India’s current GDP (in 2005 Purchasing Power Parities exchange rates). The social costs from mortality due to air pollution would increase 15 to 33 times, as both the number of premature deaths and the value per death increase.

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Air pollution is a global local problem: it is a global phenomenon with local environmental and human health impacts, particularly in high-density urban areas. As such, public policies to reduce emissions must be undertaken both at the national and local levels. International co-operation on limiting concentrations and implementing the best emission reduction technologies is essential for countries to put into motion solutions and policy tools to bring down air pollution. Urban planning and transport have a central role to play here.

Air pollution is also strongly linked to another global problem: climate change. This week at the 23rd Conference of the Parties to the UNFCCC (COP23) in Bonn, policymakers face decisions on their level of commitment in combatting climate change. Taking a closer look at its link with air pollution could provide impetus for immediate policy action. It would prevent higher numbers of premature deaths, and have a positive impact on the economy too.

References and links

Safi, Michael “Delhi doctors declare pollution emergency as smog chokes city”, 7 November 2017,The Guardian. See: www.theguardian.com/world/2017/nov/07/delhi-india-declares-pollution-emergency-as-smog-chokes-city?CMP=share_btn_link

OECD (2016), The Economic Consequences of Outdoor Air Pollution, OECD Publishing, Paris,
http://dx.doi.org/10.1787/9789264257474-en. See: http://oe.cd/26J

OECD (2017), “The Rising Cost of Ambient Air Pollution thus far in the 21st Century: Results from the BRIICS and the OECD Countries”, OECD Environment Working Papers, No. 124: http://dx.doi.org/10.1787/d1b2b844-en

See the latest Global Burden of Disease at http://www.thelancet.com/gbd

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