A common argument from people opposed to acting to prevent/minimize Climate Change, is that action can hurt the economy. Australia is a great example. Australia has an abundance of fossil fuels, especially coal, and it is claimed that these fossil fuels are too cheap and reliable a commodity to be left in the ground. As other countries, and especially other developed countries, continue to use and benefit from the cheap energy created by these fuels, opponents argue that nothing can or should be done.

But the fact is, and whether or not climate change is anthropogenic, the burning of fossil fuels (combined with other pollution) can have massive impacts on our economy. And because this impact is indirect it is not often considered. Thankfully, today the World Bank released a report that highlights the indirect economic costs of pollution.

The World Bank report claims that “environmental degradation” costs the Indian economy Rs. 3.75 trillion a year. This equates to around $80billion USD or 5.7% of GDP. Here is a graph that roughly breaks down the costs of environmental degradation:



A lot of the calculation of the costs of environmental degradation is based on the effect on healthcare costs. Urban air pollution is associated with the annual deaths of 109,000 adults and 7,500 children under 5. Coal generation alone is estimated to cause 650 deaths per year in India. Furthermore, 23% of deaths of children under 5 can be associated with indoor air pollution, and inadequate water supply, sanitation and hygiene, and 2% of adult mortality with outdoor air pollution. Here is some of the breakdown of costs per person and the sources of mortality:






Granted, it is hard to compare the environmental situation in India with other countries. India has more people than any country but China, and it has lax environmental and safety regulations compared to countries like Australia. However, the simple fact is pollution has a real impact on the economy, whether or not Climate Change is real or is anthropogenic. The healthcare burden, and resulting economic burden, of pollution needs to be factored into the debate over environmental policies.