The Solvable Challenge of Air Pollution in India

Abstract

More than 660 million Indians breathe air that fails India’s National Ambient Air Quality Standards. Research suggests that meeting those standards would increase the average life expectancy in India by one year. Going further and meeting the international benchmarks of the World Health Organization is estimated to add 4.7 years to the life expectancy. Notwithstanding these large benefits, successfully implementing policies that deliver clean air has proved difficult. This paper reviews a breadth of empirical evidence from within and outside India, as well as new data from Delhi’s recent program to ration driving, and industrial emissions in Gujarat and Maharashtra. It distills three lessons for designing effective reforms: (a) ensuring that regulatory data is reliable and unbiased, (b) framing regulations that are both economically efficient and incentive-compatible across the range of actors affected, and (c) introducing a culture of piloting and evaluating new policies as a scientific route to achieving better outcomes. It makes the case that market-based policy instruments may solve several problems with existing regulation in India, and have the potential to reduce air pollution and cut compliance costs at the same time. This work is part of the Private Enterprise Development in Low Income Countries (PEDL) programme