The growing economic cost of India’s deadly smog

The toxic smog choking the plains of northern India is not only choking the lungs of residents and killing millions of people, but also slowing the country’s economic growth.

India’s capital New Delhi is often ranked among the most polluted cities in the world. Every winter, emissions from vehicles and factories, combined with farm fires in neighboring states, shroud the city in a dark haze.

This month’s acrid smog contained more than 50 times the World Health Organization’s recommended limit of fine particulate matter – dangerous carcinogenic microparticles known as PM2.5 pollutants – that enter the bloodstream through the lungs.

Experts say worsening air pollution in India is having a devastating impact on its economy. One study estimates the loss to be $95 billion a year, or about three percent of the country’s GDP.

The true size of the economic price India pays may be even greater.

“The costs of externalities are huge, and you can’t put a value on them,” said Vibhuti Garg of the Institute for Energy Economics and Financial Analysis.

Bhargav Krishna of Delhi-based research group Sustainable Futures Collaborative said “costs are rising at every stage.”

“From missed work days to the development of chronic diseases and associated health care costs to premature death and the impact that has on a person’s family,” Krishna told AFP.

“Threat to health and well-being”

However, few studies have attempted to quantify the damage.

A report by global consultancy Dalberg concluded that air pollution cost Indian businesses $95 billion in 2019 through “lost productivity, lost jobs and premature deaths.”

This amount represents almost three percent of India’s budget and is approximately double the annual health expenditure.

“In 2019, India lost 3.8 billion work days, costing $44 billion, due to air pollution-related deaths,” says the study, which estimates that toxic air “is responsible for 18 percent of all deaths in India.” .

Pollution has also had a devastating impact on the consumer economy through direct health-related impacts, the study said, leading to decreased foot traffic and $22 billion in annual losses.

The figures are even more staggering for Delhi, the epicenter of the crisis, with the capital province losing up to six percent of its GDP annually due to air pollution.

Restaurateur Sandeep Anand Goyle called smog a “hazard to health and wealth.”

“Health-conscious people are avoiding going out of the house, so we are suffering,” said Goyle, who heads the Delhi chapter of the National Restaurant Association of India.

It has also impacted tourism as the smog season coincides with the period when foreigners traditionally visit northern India, where it is too hot for many during the unbearably hot summer.

“Smog is tarnishing India’s image,” said Rajeev Mehra of the Indian Tour Operators Association.

According to observers, Delhi faces an average of 275 days of unhealthy air per year.

“Premature Death”

Piecemeal government initiatives, which critics call half-hearted, have failed to adequately address the problem.

Academic studies show that its detrimental impact on the Indian economy is increasing.

The World Bank’s 2023 paper states that the “micro-level” impacts of air pollution on the economy are reflected in “macro-level effects that can be observed in annual changes in GDP.”

The newspaper estimates that India’s GDP would be 4.5 percent higher at the end of 2023 if the country had managed to halve pollution over the previous 25 years.

Another study published in the Lancet Health on the direct health impacts of air pollution in 2019 estimated an annual GDP slowdown of 1.36 percent due to “lost output due to premature mortality and morbidity.”

Desperate emergency restrictions, such as school closures to cut traffic emissions and building bans, come with economic costs.

“With work stopped for several weeks every winter, our schedules get thrown off track and we end up going over budget,” said Sanjeev Bansal, chairman of the Delhi chapter of the Builders Association of India.

Unless action is taken, the impact of pollution on the Indian economy is likely to worsen.

With the average age in India expected to rise to 32 years by 2030, Dahlberg’s study predicts that “susceptibility to air pollution will increase, as will the impact on mortality.”

Source: AFP