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India green tax would be breath of fresh air: World Bank

World Bank experts say the benefits would outweigh the tiny cost imposing a green tax would have on India's economy.

Even in the most extreme scenario, taxes to reduce emissions of particulate matter and carbon dioxide by 30 per cent would only diminish India's economic growth rate by between 0.7 and 1.07 per cent, economists say.
Even in the most extreme scenario, taxes to reduce emissions of particulate matter and carbon dioxide by 30 per cent would only diminish India's economic growth rate by between 0.7 and 1.07 per cent, economists say.

NEW DELHI // India could dramatically control air pollution through green taxes at only a modest cost to its economy, according to a report by World Bank economists.

Even in the most extreme scenario, taxes to reduce emissions of particulate matter and carbon dioxide by 30 per cent would only diminish India's economic growth rate by between 0.7 and 1.07 per cent, they said.

In return, India could save as much as Dh385 billion in healthcare costs by 2030. "Taken together, the carbon dioxide reduction and the health benefits are greater than the loss of gross domestic product," the report said.

The projections present a dilemma for India's economic planners, who have argued that shaving even a percentage point off of the growth rate would block efforts to raise millions of citizens out of poverty, said Muthukumara Mani, the paper's Washington-based lead author.

"We agree that growth drives poverty reduction and brings about improved social outcomes, such as better health and education," he said. "But growth has also come largely at the expense of the environment. And environmental damages, in turn, could threaten both growth prospects and the progress achieved in social indicators."

At the present rate, the report projected India would emit 2.77 billion tonnes of carbon dioxide in 2030, up from 1.56 billion tonnes in 2010.

Over the same period, its particulate-matter emissions were projected to rise to 16.81 million tonnes from 8.68 million tonnes.

The findings were welcome news, said S D Biju, who heads a research laboratory at the University of Delhi's Department of Environmental Sciences. "Because, of course, carbon dioxide and particulate matter emissions represent severe threats to people's health," he added.

But finding the political will to implement environmentally friendly measures would prove more of a challenge, he said.

"It's natural for governments to think about development, because that's key for any government's success," he said.

"And, of course, we all need to consider the socio-economic interests of the nation. So unfortunately, there's no simple answer here about whether the government should do this or that. It's never that simple."

ssubramanian@thenational.ae