The cost of pollution: $80 billion a year in India

Environmental degradation is costing India the equivalent of 5.7 percent of its GDP.
Written by Tyler Falk, Contributor

Air pollution is reducing life expectancy in China by five years and around the world it kills 2.4 million people each year. But air pollution isn't just costing lives, it's hurting the economy.

The World Bank estimates in a new report that environmental degradation is costing India $80 billion per year, or 5.7 percent of GDP. Air pollution contributes the most to the costs at 3 percent of GDP, while the rest is a result of the lack of access to clean water supply, sanitation and hygiene, and natural resources depletion.

“Grow now and clean up later will not be environmentally sustainable for India in the long run,” said Muthukumara S. Mani, a senior environmental economist at the World Bank and the lead author of the report. “We believe that a low-emission, resource-efficient greening of the economy is possible at a very low cost in terms of GDP growth.”

In the study, the World Bank modeled the cost of reducing air pollution and the benefits it would bring. If, by 2030, India is able to reduce air pollution by 10 percent it would cost 0.3 percent of GDP. The savings from reduced health damages would come to $24 billion. If India decided to be more aggressive at reducing pollution, it could reduce air pollution by 30 percent by 2030 at a greater cost to GDP of 0.7 percent. But that scenario would also lead to substantially higher health savings of $105 billion.

As India's economic growth forecast was reduced to 5 percent today, it would be wise to take into account the impact pollution has on the economy. Of course, short-term solutions are tempting when GDP numbers drop, but, in the long term, fixing the pollution allows for sustained long-term growth and longer lives.

Read more: World Bank

Photo: Flickr/mrbula

This post was originally published on Smartplanet.com

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