The debilitating impact of pollution on the economy

Delhi suffered the highest per-capita economic loss due to air pollution last year in India, according to a study published in The Lancet on Tuesday. The economic loss due to lost output from premature deaths and illness attributable to air pollution (outdoor and household) as a percentage of state GDP was 1.08% in Delhi. The highest loss to GDP was recorded by Uttar Pradesh (2.15%), followed by Bihar (1.95%), Madhya Pradesh (1.70%) and Rajasthan (1.70%). Overall deaths and disease due to air pollution, according to The Lancet, is responsible for a loss of 1.36% of the nation’s GDP.

The impact of air pollution on the economy can be deep, yet not immediately obvious. For example, higher rates of asthma, diabetes or chronic respiratory diseases can lead to reduced ability to work and lower participation rates in the labour force. Children susceptible to asthma attacks also miss school days, which can severely impact their learning and subsequently future growth, while health care requirements can result in their parents taking extra time off from work. Deaths of children and young people bring an economic cost through lost contributions to society and the economy, which can be large. Earlier this year, a study released by MIT Sloan said that a large-scale review demonstrates that air pollution is not only detrimental to people’s physiological health, but also their psychological health. It increases depression, and impairs cognitive functioning and decision-making.

In a developing country such as India, there is a continuing debate on carbon-intensive growth versus environment and health. But as The Lancet study shows, increasing pollution load is erasing the very economic and human development gains that the country aspires to achieve. The pollution-related losses will also hit the poorer states with weaker social infrastructure harder, deepening the already existing social and economic inequities further.