"Breathing Economics: Unveiling the Impact of Air Pollution on India's Growth Story"

The detrimental effects of air pollution extend beyond environmental and health concerns, penetrating into the economic fabric of nations. Recent research illuminates the direct link between air pollution and economic consequences, with a notable focus on India. This blog elucidates the multifaceted impacts of air pollution on GDP, per-capita income, and various sectors of the Indian economy.

Understanding Air Pollution:

Definition:
- Contamination of the environment by chemical, physical, or biological agents, modifying the natural characteristics of the atmosphere.
- Major pollutants include PM2.5, PM10, carbon monoxide, ozone, nitrogen dioxide, and sulphur dioxide.
Sources:
- Household devices, motor vehicles, industrial facilities, and natural events like forest fires contribute to air pollution.

Economic Impacts of Air Pollution:

RBI's Climate Change Report:
- Up to 4.5% of India's GDP at risk by 2030 due to lost labor hours from climate change-related issues.
- 50% of India's GDP is exposed to heat, as opposed to less than 25% in Europe.
Greenpeace Research:
- Estimates air pollution's economic impact in China at $900 billion and $600 billion for the US.
- In 2018, air pollution cost 6.6% of Chinese GDP, 5.4% of India's GDP, and 3% of US GDP.
World Bank Paper (June 2023):
- Micro-level impacts on health, productivity, and labor supply aggregate to macro-level effects observable in GDP changes.
The Lancet Planetary Health:
- Large inter-state variations in economic loss in India, ranging from 0.67% to 2.15% of state GDP.

Diverse Economic Implications:

Labor Productivity:
- 1.3 billion working days lost in India in 2019 due to absenteeism.
- $6 billion cost incurred, with 98% in northern and eastern regions.
Consumer Footfall:
- 1.3% reduction in consumer spending in 2019, costing $22 billion.
- Impact on India's strength as a large consumer economy.
Premature Mortality:
- 18% of all deaths in India attributed to air pollution.
- India lost 3.8 billion working days in 2019, costing $44 billion.
Sector-Specific Impacts:
- IT sector incurred $1.3 billion or 0.7% of GDP loss.
- Tourism sector saw a 1% decline in GDP, costing $2 billion.

Challenges and Government Initiatives:

Annual Pollution Cycles:
- Recurrent pollution cycles in key hubs like Delhi NCR and Mumbai.
- Delhi faces severe air quality issues, with PM2.5 levels 10 times higher than WHO targets.
Government Measures:
- National Clean Air Programme (NCAP) targeting a 40% reduction in PM10 concentration by 2025-26.
- Concept of LiFE and circular economy introduced at COP26.
- Updated Nationally Determined Contributions (NDCs) to reduce emissions intensity and enhance non-fossil fuel-based energy.
Commission for Air Quality Management:
- Establishment for improved air quality management in the National Capital Region and adjoining areas.
Graded Response Action Plan (GRAP):
- Emergency measures to prevent further deterioration of air quality in Delhi-NCR.

Way Forward:

Industry Collaboration:
- Industry leaders urged to adopt green practices, renewable energy, and ambitious pollution policies.
- Collaboration between public and private sectors for sustainable solutions.
Economic Transformation:
- Shift from viewing air pollution as an inevitable cost to actively mitigating its impact.
- Adoption of eco-friendly business practices, supply chain greening, and technological advancements.
Public Awareness:
- Fostering awareness about the economic toll of air pollution.
- Encouraging public participation in sustainable practices.

Conclusion: Air pollution is not just an environmental or health challenge; it is an economic adversary. Recognizing the intricate links between air quality and economic well-being is crucial for devising effective strategies. As India navigates its growth trajectory, a concerted effort towards cleaner air promises not only a healthier populace but also a more robust and sustainable economy.