Correlation between Air Pollution and Economic Growth

GS Paper III

News Excerpt: 

Delhi-NCR's air quality has deteriorated and breached the danger mark, reaching alarming levels. Numerous studies have shown a direct and severe impact of air pollution on GDP growth and per capita income levels.

Background:

  • The Graded Response Action Plan (GRAP) has already been enforced due to the rising pollution.
  • GRAP is a set of emergency measures that kick in to prevent further deterioration of air quality once it reaches a certain threshold. 
  • For this, the Commission for Air Quality Management (CAQM) relies on air quality and meteorological forecasts by the Indian Institute of Tropical Meteorology (IITM) and the India Meteorological Department (IMD).

Relation to Economic Growth:

India is an emerging economy with some of the most stable macroeconomic parameters among its peers. Thus, there is widespread concern about the impact of its deteriorating environmental conditions on the health of its economy.

Environmental Kuznets Curve (EKC):

  • It explains the relationship between Economic Growth (determined by per capita income) and Environmental Pollution.
  • It is based on an inverted U-shaped curve created by Kuznets in 1955.
  • The curve consists of 3 phases:
    • Intensive use of resources and a rapid increase in environmental degradation.
    • The turning point is reached when a certain income level is achieved and a change in the pollution trajectory occurs.
    • This phase leads to environmental improvement and mitigation of pollution through clean technology.

Traditionally, air pollution is seen as an inevitable by-product of economic growth. And thus, a policy response to it is extremely slow. 

Effects on Economic Growth:

The total cost includes both market and non-market costs.

  • Market costs are associated with biophysical impacts directly affecting economic activity as measured in the national accounts and GDP. 
  • Non-market costs include the monetised welfare costs of mortality (premature deaths) and the disutility of illness (pain and suffering).

The costs of poor air quality were manifested in these ways:

(i)  Lower labour productivity: 

  • Reserve Bank of India’s Currency & Finance 2022-23 that up to 4.5% of India’s GDP could be at risk by 2030 due to lost labour hours from climate change issues, including extreme heat and humidity. Adding the impact of pollution to this makes the lost labour hours much more significant. 
  • It is a concern, especially in developing countries such as India, where employment generation is still primarily linked to economic activities involving the outdoors: agriculture and construction are among the biggest employment avenues, while delivery services and security agency work account for the bulk of employment generation options in the urban areas. 

(ii) Lower consumer footfall: 

  • Fewer people prefer to step out when the air quality is worse. 
  • It is a matter of concern because the services sector accounts for more than 50% of the Indian GDP.

(iii) Increased health expenses: 

  • Nearly all Indian children (98%) breathe unsafe air that exceeds WHO guidelines, leading to an increasing number of respiratory and cardiovascular diseases.
  • Air pollution has been linked to millions of deaths globally and more than 100 million disability-adjusted life years (DALYs) annually.
  • DALYs measure health burdens, including reduced life expectancy and diminished quality of life.

(iv) Premature mortality: 

  • A 2018 report titled ‘Air Pollution and Child Health Prescribing Clean Air ’ released by the World Health Organisation (WHO) revealed that India records the highest number of premature deaths among under-5 children due to toxic air.

(v) Lower crop yields affect agricultural production: 

  • High levels of concentration of pollutants, mainly ozone, reduce crop yields and thus affect agricultural productivity.

Way Forward:

Micro-level impacts of air pollution on health, productivity, labour supply, and other economically relevant outcomes are well documented. 

  • Article 21 (Right to Life) of the Constitution of India guarantees the right to a clean and healthy environment, including clean air and water as a fundamental right.
  • Sustainable Development Goals (SDGs), which the world needs to achieve by 2030 and are of particular relevance to ambient air pollution, include:
    • SDG target 3.9.1, which calls for substantially reducing deaths and illnesses from air pollution. (SDG 3: Health)
    • SDG target 11.6.2, which aims to reduce the environmental impact of cities by improving air quality  (SDG 11:Cities)
  • The potential economic consequences of both the market and non-market impacts of outdoor air pollution are significant and underscore the need for decisive policy action. Governments and civil society need to work in collaboration to take steps to be able to achieve these SDGs as well as provide a healthy and prosperous world to future generations.

Mains PYQ

Q. Describe the key points of the revised Global Air Quality Guidelines (AQGs) recently released by the World Health Organisation (WHO). How are these different from its last update in 2005? What changes in India’s National Clean Air Programme are required to achieve revised standards? (UPSC 2021)

Q. Mumbai, Delhi and Kolkata are the three Mega cities of the country but the air pollution is much more serious probelm in Delhi as compared to the other two. Why is this so? (UPSC 2015)

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