Cost = USD$80 billion / year
“The survey concluded that India has
the worst air pollution in the entire world, beating China, Pakistan, Nepal and
Bangladesh. Also, according to another recent WHO survey, across the G-20
economies, 13 of the 20 most polluted cities are in India,” says a World Bank study
India: Green Growth - overcoming
India's environment challenges to promote development
Towards a Green India
- Although the past decade of rapid economic growth has brought many benefits to India, the environment has suffered, exposing the population serious air and water pollution.
- A new report finds that environmental degradation costs India $80 billion per year or 5.7% of its economy.
- Green growth strategies are needed promote sustainable growth and to break the pattern of environmental degradation and natural resource depletion. Emission reductions can be achieved with minimal cost to GDP.
Background
and Context
Over the last decade, India’s
strong growth has increased employment opportunities and allowed millions to
emerge from poverty.
India’s remarkable growth record,
however, has been clouded by a degrading environment and growing scarcity of
natural resources. Mirroring the size and diversity of its economy,
environmental risks are wide ranging and are driven by both prosperity and
poverty.
In a recent survey of 132 countries
whose environments were surveyed, India ranked 126th overall and last in the
‘Air Pollution (effects on human health)’ ranking.[1]
The survey concluded that India has the worst air pollution in the entire
world, beating China, Pakistan, Nepal and Bangladesh. Also, according to
another recent WHO survey, across the G-20 economies, 13 of the 20 most
polluted cities are in India. . Simultaneously, poverty remains both a cause
and consequence of resource degradation: agricultural yields are lower on
degraded lands, and forests and grasslands are depleted as livelihood resources
decline. To subsist, the poor are compelled to mine and overuse the limited
resources available to them, creating a downward spiral of impoverishment and
environmental degradation.
But does growth – so essential for development
– have to come at the price of worsened air quality and other environmental
impacts?
Findings
Three striking findings emerge from
this review:
First, Environmental sustainability
could become the next major challenge as India surges along its projected
growth trajectory
Second, A low-emission,
resource-efficient greening of the economy should be possible at a very low
cost in terms of GDP growth. While a more aggressive low-emission strategy
comes at a slightly higher price tag for the economy it promises to deliver
greater benefits.
Third, For an environmentally
sustainable future, India needs to value its natural resources, and ecosystem
services to better inform policy and decision-making
While the overall policy focus
should be on meeting basic needs and expanding opportunities for growth, they
should not be at the expense of unsustainable environmental degradation. 
Muthukumara Mani
Senior Environmental Economist
Senior Environmental Economist
Key
Findings
Green growth is necessary. With cost of environmental degradation at 5.7% of GDP,
environment could become a major constraint in sustaining future economic
growth. Further, it may be impossible or prohibitively expensive to clean up
later.
Green growth is affordable. Model simulations suggest that policy interventions such
as environmental taxes could potentially be used to yield positive net
environmental and health benefits with minimal economic costs for India.
Green growth is desirable. For an environmentally sustainable future, India needs to
value its natural resources, and ecosystem services to better inform policy and
decision-making especially since India is a hotspot of unique biodiversity and
ecosystems.
Green growth is measurable. Conventional measures of growth do not adequately capture
the environmental costs, Therefore, it is imperative to calculate green Gross
Domestic Product (green GDP) as an index of economic growth with the
environmental consequences factored in.
What can be done?
A low-emission, resource-efficient
greening of the economy should be possible at a very low cost in terms of GDP
growth. A more aggressive low-emission strategy comes at a slightly higher
price tag for the economy while delivering greater benefits
Emissions reduction would have a
minimal impact on GDP which would be offset by savings through improving health
while substantially reducing carbon emissions.
- A 10% particulate emission reduction will lower GDP only modestly. GDP will be about $46 billion lower in 2030 due to interventions, representing a loss of 0.3 % compared to business as usual.
- A 30% particulate emission on the other hand reduction will lower GDP by about $97 billion, or 0.7 %.
- GDP growth rate will be negligibly reduced by about 0.02 to 0.04% in both scenarios. There will be significant health benefits under both scenarios which will compensate for the projected GDP loss.
- The savings from reduced health damages will range from $105 billion in the 30% case and by $24 billion with a 10% reduction.
- Under both the scenarios, another important benefit would be a substantial reduction in CO2 as a co-benefit which has a potential of being monetized.
[1]The
annual study, the Environmental Performance Index, is conducted and written by
environmental research centers at Yale and Columbia universities with
assistance from dozens of outside scientists.
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