Economic Impacts Of Air Pollution
Source: What is the impact of air pollution on economic growth?, Indian Express, November 4, 2023
- Lower Productivity and Consumer Activity: Air pollution affects the economy by making workers less productive. It also keeps people from shopping and using services that drive the economy.
- Increased Health Costs: It costs more money to take care of people’s health because of pollution. The government and families spend more on medical needs, which can reduce money available for other things.
- Risks to Major Cities: Cities like Delhi and Mumbai face severe pollution. This has harmful effects every year, hurting these cities’ economies.
- Overall Economic Slowdown: In conclusion, air pollution does not go hand in hand with growth. It can actually slow down the economy significantly
Economic Impact of Air Pollution in India
- GDP Reduction Due to Pollution: Air pollution not only harms health but also affects the economy. A report from the World Bank in June 2023 discusses how air pollution’s negative effects on health and work result in GDP decreases.
- Data from Indian Districts: The report’s findings come from examining data across approximately 550 districts in India. These districts make up about 90% of India’s real GDP. The study found that these effects can be seen in yearly GDP changes, echoing the known individual impacts.
- Variations in Economic Losses: Research published in The Lancet Planetary Health in 2021 revealed that economic losses due to air pollution vary across India’s states. The economic loss as a percentage of state GDP ranges from 0.67% to 2.15%. States with lower per-capita GDPs like Uttar Pradesh and Bihar experience the highest losses.
- Comparison with Outdoor Work GDP Contribution: Regarding GDP makeup, sectors that involve outdoor work make up about 50% of India’s GDP, according to RBI data. This is in stark contrast to Europe, where the European Central Bank reports less than 25% of GDP comes from such sectors.
Six Ways Air Pollution Affects the Economy
A study by Dalberg Advisors, in partnership with Clean Air Fund, Blue Sky Analytics, and the Confederation of Indian Industry highlights six main effects:
- Workers are less productive.
- Fewer customers shop.
- Assets, like solar panels, work less effectively.
- Health expenses rise.
- People’s overall well-being suffers.
- Lives are cut short due to pollution.