Make the polluter pay

By Michael Greenstone, Rohini Pande, Nicholas Ryan and Anant Sudarshan

London was once known as “the big smoke”. Osaka, Japan, was the “smoke capital.” Los Angeles was the “smog capital of the world”. And most recently, Beijing gained notice as a major pollution capital. While cities are hotbeds for vibrant culture, economic activity and growth, they too often become air pollution capitals during times of rapid development. Delhi, like many of India’s cities, is no different.

During their time of development, each of these major cities felt the pain of pollution: greater rates of sickness, lost work time and lost loved ones. Each chose to confront this pollution, resulting in measurably cleaner skies and healthier citizens. Now, India faces the same choice. While India’s policymakers will need to find the right balance between improvements in health and costs to industry, history shows that, with the right policies, it can improve its citizen’s health and continue to prosper.

The first step is for India to acknowledge that the heavy smog that too often blankets Delhi and other Indian cities is harming citizens’ health. In a recent study, we found high pollution cuts most Indian lives short by three years. Our study is just one of many linking pollution to health threats. In a study commissioned by the Central Pollution Control Board, scientists from India’s top cancer institutes tracked 11,000 schoolchildren in Delhi and other cities for three years. They found that particulate pollution had likely caused irreversible reduction in the children’s lung function. Now, doctors are telling patients to leave the city before their conditions worsen.

It doesn’t need to be this way. We’ve found that improved compliance with Indian air quality standards for airborne particulate matter would save 2.1 billion life-years for more than half of the population exposed to this deadly pollution. And those standards are weaker than what the World Health Organisation recommends. So, if the standards were stricter, it would be possible to save even more life-years.

There are many useful ideas India could consider that have been successful elsewhere in the world in reducing pollution without high costs. One way to improve compliance with current standards could be for India to increase its use of technology in monitoring air pollution emissions from industrial plants, and to make this data easily accessible to the public (for example, by putting it online). Intermittent sampling of industries, done once or twice a year, is not enough for regulators to get a clear picture of who is polluting the most.

Further, there are not enough monitoring stations for the public to learn about pollution in the air they breathe. As a point of comparison, Beijing has 35 monitoring stations, while Delhi has only 21, and too many Indian cities have even fewer. Increased ambient air monitoring would help researchers and State Pollution Control Boards to identify pollution hot spots and create more public pressure for compliance.

Installing a “polluter pays” system is another way countries have successfully reduced pollution. Currently, India’s flagship environmental laws are built on an outdated criminal system with draconian penalties, such as industry closure, which are costly and difficult to enforce. We do not want to close industry down; we want to clean it up. A greater reliance on civil rather than criminal penalties would provide polluters with an incentive to reduce pollution.

Using a market-based approach, like an emissions trading system, is another proven tool used by the United States, European Union and now China. Such an approach reduces pollution at the lowest possible cost, so as to encourage the economic growth that is vital for India’s future. This approach is flexible enough to work for many pollutants, and on many scales. In the city of Los Angeles, for example, trading systems and tighter fuel standards have played critical roles in cleaning up the air.

Beyond industry, traffic congestion, the burning of waste and other sources also emit pollution into the air. As such, it’s important to consider innovative reforms such as congestion pricing, improved public transit, and more stringent fuel standards. Reducing pollution will be less costly if reductions come from all sources.

We all breathe the same air. Air pollution harms us, whether we are poor or rich; whether we walk, pedal a bike, drive a car, or sit in the back seat to be driven. It seeks out even the most powerful, as is evidenced by the notorious asthmatic cough of Delhi’s own chief minister.

Yet, India does not have to tolerate this threat. Actions to improve monitoring, make polluters pay, and put a price on emissions can be implemented in cost-effective ways so that they are compatible with the economic growth that is vital for India’s future. Great countries and cities throughout history have never stalled by trying in earnest to cut air pollution.

What comes to mind when we think of London, Osaka, and Los Angeles today? Only that they are some of the richest, most vibrant cities in the world.

(Greenstone is Milton Friedman professor in economics and director of the Energy Policy Institute at the University of Chicago. Pande is Mohammed Kamal professor of public policy and director of the Evidence for Policy Design initiative at Harvard University’s Centre for International Development. Ryan is assistant professor of economics at Yale University. Sudarshan is executive director of the Energy Policy Institute at Chicago’s India office)