The study, conducted by economists at the universities of Chicago, Harvard and Yale, reveals that India's high air pollution, ranked by the World Health Organization (WHO) as some of the worst in the world, is having an adverse impact on lifespans.

The report, released on February 23 in Economic & Political Weekly, found that over half of India's population - around 660 million people - live in areas where fine particulate matter pollution is above the country's standards for what is considered safe.

If India were to reverse this trend to meet its air standards, those 660 million people would gain about 3.2 years onto their lives. Put another way, compliance with Indian air quality standards would save 2.1 billion life-years, said the report.

The new figures come after WHO estimates last year showed that 13 of the 20 most polluted cities in the world were in India, including the worst-ranked city, Delhi. Moreover, the South Asian nation has the highest rate of death caused by chronic respiratory diseases anywhere in the world.

In a DW interview, Nicholas Ryan, Assistant Professor of Economics at Yale University, says that in order to tackle the issue more effectively, India should begin to adopt a market-based approach toward regulating emissions - like an emissions trading system - and restructure environmental laws and regulations around civil rather than criminal penalties.

DW: How is air pollution affecting India?

Air pollution, especially particulate matter air pollution, has been shown to shorten people's lives, and to have a range of bad effects on the health and productivity of people living. We just consider the effect on lifespans. What our paper does is to take a good estimate of this relationship between pollution and lifespan, which happens to be from a study in China, and apply it to pollution and population data from India.

What we find is that, because the levels of pollution in India are so high and the country is densely populated, there is a loss of 2.1 billion life-years to India's citizens from air pollution. That is, this is a truly massive public health concern for India.

What are the most affected areas of India?

Basically all of North India, the Indo-Gangetic plain, is subject to hazardous levels of air pollution. A strength of our study is that it used satellite-based measures on air pollution, which means that we can measure pollution even outside of the cities, where the ground-based monitors are. And we see that even in rural areas, the levels of particulate matter are off the charts.

What lies at the root of this development?

One can say the causes only in general terms: emissions from transport, from diesel and other petroleum consumption, industrial and power sector emissions from solid fuel consumption, and biomass burning are certainly all contributors.

There are a few studies, by the Central Pollution Control Board, or by Dr. Sarath Guttikunda, that try to break this down precisely, by doing what is called "source apportionment" to say exactly how much of the pollution in the air is due to each source. The results of these studies show that the relative shares of these sources varies widely across locations, and really show how much more of this kind of research is needed.

How is this impacting economic growth?

The links from air pollution to economic growth are complex, but a wave of research in the last decade or so has started to fill these in. First, pollution directly shortens peoples' lives. Second, pollution harms health, for example causing babies to be born at lower weights and earlier in gestation, and causing respiratory ailments in adults. People will not be as productive if they are sick and short-lived.

Third, and more directly, pollution reduces the productivity of people who work in labor-intensive jobs like agriculture. Fourth, people have to spend money and go out of their way to avoid air pollution.

You can see this in Delhi, where, for example, the US Embassy recently bought air purifiers for all its employees. A colleague of mine visiting Delhi from the US said that it was impossible to keep her children healthy there, until they bought one of these devices. All that unneeded expenditure is a burden on growth.

On what data did you base your findings and what do you make of the amount and type of air pollution data currently being collected by the Indian government?

The data comes from three sources. Where the government has pollution monitors, we use data from those monitors, from the Central Pollution Control Board. For areas that are not monitored on the ground, we use satellite-based measures of particulate matter concentrations from Dey et al. (2012), a prior paper that assembled this great data. And for population we use data from the Census of India.

The Indian government is a good source of pollution data, and is expanding its monitoring over time. For example, the Central Pollution Control Board has developed standards for monitoring not just particulate matter in the air, but also monitoring the pollution coming out of factories. But there is still a long way to go as far as getting a comprehensive, robust and accurate monitoring network.

What should they do to regulate emissions more effectively?

People in India are justly skeptical about environmental regulation because it is seen as causing a lot of collateral damage for the economy. The government and regulators need to find ways to address all of the sources of particulate matter emissions at the lowest possible cost. For transport, this may involve accelerating the introduction of more stringent fuel standards.

For industry, we think that market-based regulations, such as emissions trading systems, hold a lot of promise to reduce emissions at a lower cost. The government of India is working on a pilot emissions trading program that would limit particulate emissions from industrial sources in several states, for example. Broadly, we suggest in the paper that moving from just a criminal framework to a civil framework for environmental regulation may make regulations work better and at a lower cost.

Nicholas Ryan is Assistant Professor of Economics at Yale University. He studies energy markets and environmental regulation in developing countries.

The interview was conducted by Gabriel Domínguez.