Health costs of pollution in India 8 times govt’s fuel subsidy: Study

NEW DELHI: India spent $16.9 billion on oil, gas and coal subsidies in 2013 and 2014 but the health costs to meet the burden of air pollution-linked diseases was eight times more at $140.7 billion, says a report by an European environmental non-profit organisation.

The Health and Environment Alliance (HEAL) assessed the spending of seven economically powerful countries on fossil fuel subsidies, and the health costs associated with fossil fuel subsidies.

The report, ‘Hidden Price Tags’, said India can provide 375 million households with solar lamps or train nearly 32,000 extra doctors for rural areas with its annual spend on fossil fuels subsidies. This was assessed considering that each solar lamp costs about $22.5 and the recent estimate of All India Institute of Medical Science which put the cost of training a doctor at Rs 1.7 crore. The subsidy amount could fund 24% of the total money needed to implement healthcare coverage for all Indians, the report suggests.

Making a case for spending fossil fuel subsidy money on public health instead, the report released on Thursday claimed that G20 governments spent about $444 billion in subsidies to fossil fuel companies in 2014, but the health costs of these subsidies in the form of respiratory and cardiovascular diseases, as well as premature deaths, were as high as $2.76 trillion, six times the subsidy amount.

The report calls for reallocation of fossil fuel subsidies because they increase the price gap between fossil fuels and renewables, which makes fossil fuels seem cheaper and discourages investment in green energy.

HEAL has used a combination of data provided by the International Monetary Fund (IMF), the Overseas Development Institute (ODI) and Oil Change International (OCI) to arrive at their findings. For subsidy estimates, data from ODI and OCI were used for 2013 and 2014, which includes national subsidies delivered through direct spending and tax breaks, investments by state owned enterprises and public finance from government owned banks.

On India’s spending on fossil fuel subsidies, researchers from the Public Health Foundation of India (PHFI), who drafted the India chapter, noted that two-thirds of electricity in India continues to be generated from coal, one of the biggest contributors to air pollution. Liquefied Petroleum Gas (LPG) and kerosene were also subsidised.

The report said not all fossil fuels are bad. In fact, LPG has significant health benefits when used to substitute biomass or coal as cooking fuel. “About 400 million households have been helped to make the switch from burning solid fuels to the healthier LPG option with the help of subsidy schemes since 1980.

But population growth has resulted in over two-thirds of households burning highly carbon-emitting biomass fuels for cooking with resulting health impacts,” the report states. That India has ambitious renewable energy targets of meeting over 50% of installed power capacity with renewable energy by 2027 is encouraging, authors said.

On kerosene, the authors noted that “as much as half of the subsidised kerosene is simply sold on the black market since it can be used in diesel engines.” Kerosene is “poor man’s fuel” used by millions of households in rural India to meet basic lighting needs. Government subsidies make the fuel more affordable. They said kerosene smoke is rich in black carbon and kerosene poisoning among children remains a concern.

China spent about $96.5 billion on fossil fuel subsidies and its associated health costs are $1,785.4 billion, 19 times the subsidy amount.

The report overall mainly recommends reforms in subsidies offered by two fossil fuels which cause significant harm health: coal combustion and pollution from diesel vehicle exhaust pipes.