Paying the price

The cost of environmental degradation is rising steeply in India, says the World Bank

Published: Sunday 15 November 1998

-- (Credit: Graphic Simulation: Suparna Da)INDIA loses about US $80 billion every year on account of sickness and death from pollution and economic costs attributable to resource degradation, says the World Bank's annual Environmental Review. The loss due to poor environment is pegged in excess of US $20 billion a year by conventional calculations, and nearly US $80 billion in purchasing power parity (PPP) terms, the report says.

Environmental degradation in the region continues to worsen driven by the familiar factors of increasing industrial pollution in urban areas and degeneration from the unsustainable use of land, forest and water resources in rural and coastal areas.

According to the Human Development Report 1998, a conservative estimate in 1996 of environmental damage in India had put the figure at more than US $10 billion a year or 4. 5 per cent of the GDP in 1992. If higher estimates are used, the total environmental cost at that time was around US $13. 8 billion. A breakdown of the conservative costs estimate had shown that urban air pollution cost India US $1. 3 billion a year. Water degradation led to health costs amounting to US $5. 7 billion every year, nearly three-fifths of the total environmental costs.

The 1998 annual review, entitled Environment Matters, elaborates that stand-alone environmental projects amounting to US $902 million, and agriculture, water and urban development projects with a strong environmental focus totalling US $590 million were approved in the fiscal year 1998. Cumulative active environmental projects - including investment projects to reduce pollution, protect ecosystems, and to build environmental management capacity - levelled off in 1998 after years of sharp increases. The levelling off in the cumulative active portfolio reflects environmental projects approved in earlier years that have reached completion. This is expected to continue as many earlier projects are completed.

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