By Chirantan Chatterjee and Anirban Gongopadhyay
Northern India’s air pollution problem will soon potentially experience its annual peak with the upcoming Diwali festivities. This would have worried 2018 Nobel Laureate in economics WD Nordhaus, since it seems emerging economies like India have not paid enough attention to his research on a dynamic integrated climate economy model about which he wrote back in 1993.
In fact, Nordhaus and his co-authors in 2011 also proposed how to account for environmental pollution in the national accounts, demonstrating how air pollution emission caused more damage than benefits to the economy. But in India, have we done enough to understand the quantum and sources of air pollution, how they spread and what is the damage they cause?
While one cannot be sure, let’s first dwell on the quantum of the problem. India is home to 15 of the 20 most polluted cities in the world. New Delhi, with a population of over 20 million, is the most polluted capital city in the world.
Air purification products, however, are just a consumer response to demand for clean air. Whenever there are externalities of this sort, economists want to understand the cost from these externalities and how much is the average citizen willing to pay to mitigate these. This helps policymakers penalise polluters or to incentivise the market towards lower pollution.
It seems this is now high in China, as research from Koichiro Ito and Shuang Zhang have found. While the average person in China is willing to pay $5.46 to remove one microgram per cubic metre of pollution from the air s/he breathes for five years, higher income persons can pay as much as $15.
In a recent 2018 paper, Harvard scientist Daniel Cusworth and co-authors show that since at least the 1980s, a shift in North West India to mechanised combine harvesting in agriculture to improve efficiency results in abundant crop residue in the fields, such that burning those residues can attribute somewhere between 7 and 78 per cent to Delhi’s air emission enhancements from PM2.5 levels during the period of 2012 to 2016.
Sensing this apriori in 2016, the University of Chicago’s Energy Policy Institute in their Delhi office launched an innovation challenge and one solution nominated involved greener and more sustainable ways to burn crops and deal with the soil in North West India.
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