Meghan Hodges
Indonesia is facing a pollution crisis, with severe air pollution and water pollution affecting the health and well-being of its citizens. The country's rapid industrialization, coupled with limited waste management infrastructure and regulatory frameworks, has led to a significant increase in waste generation and pollution levels. Jakarta, the capital city, has been ranked as one of the most polluted cities in the world, with air pollution levels reaching hazardous levels. The economic cost of pollution in Indonesia is substantial, with estimates ranging from USD 96.4 billion to USD 220 billion, or 3.5% to 6.6% of the country's GDP. The human cost is even more concerning, with over 10,000 premature deaths and more than 5,000 hospitalizations attributed to air pollution each year in Jakarta alone.
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What You'll Learn
The economic impact of air pollution in Jakarta
Indonesia's air pollution is mainly caused by forest fires, coal-fired power plants, the transportation and energy production sectors, and emissions from household and industrial sources. The country's rapid economic development, increasing domestic consumption, and expanding manufacturing and service sectors have led to a significant increase in waste generation, further contributing to pollution.
Jakarta, the capital of Indonesia, has been consistently ranked as one of the most polluted cities in the world, with air pollution levels worsening in recent years. The economic impact of air pollution in Jakarta is significant, resulting in substantial health and financial burdens.
A study conducted in Jakarta quantified the health and economic impacts of fine particulate matter (PM2.5) and ground-level ozone (O3), which exceed local and global air quality standards. The study found that air pollution in Jakarta leads to over 7,000 adverse health outcomes in children, more than 10,000 premature deaths, and over 5,000 hospitalizations annually. The economic loss due to PM2.5 and O3-related deaths and illnesses is estimated to be around 2% of Jakarta's provincial GDP, amounting to approximately USD 2943.42 million annually. The costs include treatment expenses and productivity losses due to inpatient care.
The impact of air pollution on childhood development is particularly concerning, with East Jakarta bearing the highest costs stemming from childhood stunting, asthma, respiratory diseases, low birth weight, premature births, and infant mortality. The permanent health impacts of air pollution contribute to the economic burden, with the value of productivity loss and premature deaths comprising a significant share of the total cost.
The Indonesian government has faced criticism and legal action from citizens demanding stricter policies and improved monitoring of air pollution. Jakarta's air pollution is also influenced by emissions from neighbouring provinces, highlighting the need for coordinated action and transboundary solutions.
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The cost of treating stunting in Jakarta
Indonesia has been facing severe pollution problems for years, with forest fires being the main source of air pollution. During October 2015, there were nearly 5,000 simultaneous fires across forests and peatlands, producing approximately 80 million metric tonnes of carbon dioxide in just one day. The country's pollution problem is further exacerbated by emissions from the transportation and energy production sectors, with coal-fired power plants and road dust contributing significantly. The impact of pollution on Indonesia's population is profound, with residents of Jakarta experiencing a reduction of 2.4 years in life expectancy due to poor air quality.
Now, let's focus on the costs associated with treating stunting specifically in Jakarta:
Stunting, a condition caused by inadequate nutrition, results in reduced height for age in children and has wide-ranging health and economic consequences. In Jakarta, the costs associated with treating stunting are significant and multifaceted. Firstly, there are the direct healthcare costs of treating the various health issues associated with stunting, including a weakened immune system, increased susceptibility to diseases like diabetes and cancer, and adverse effects on brain development. These treatments may include inpatient care, medications, and long-term management of chronic conditions. The costs of inpatient care are substantial, and productivity losses during hospital stays further contribute to the economic burden.
Community health workers (CHWs) play a crucial role in stunting management in Jakarta. Over 1.5 million CHWs are involved in monthly growth monitoring and counseling, providing essential support to affected individuals. However, challenges such as unclear recruitment processes, the non-professional status of CHWs, and funding constraints hinder their full potential. The cost of training and supporting these workers is an important component of the overall expense of tackling stunting.
The economic impact of stunting extends beyond healthcare costs. Stunted individuals have been found to achieve lower educational levels and earn 20% less as adults, impacting their income and, by extension, the country's economy. The Indonesian government has set ambitious economic goals, aiming to become the fifth-largest economy globally by 2045. However, if stunting prevalence remains unchanged, a significant portion of the workforce will be less productive, hindering the nation's growth prospects.
The cost of preventing stunting is also a critical consideration in Jakarta. Preventative measures include promoting proper nutrition, such as balanced diets for pregnant women and exclusive breastfeeding for infants. The Tanoto Foundation, for example, has initiated a Stunting Awareness Month to educate the community about stunting prevention and treatment. Additionally, innovative methods such as combining fish farming with rice farming (Minapadi) have been successful in improving diet diversity and increasing household income.
While the exact figures for the cost of treating stunting in Jakarta may not be readily available, it is evident that the financial burden is substantial, encompassing healthcare expenses, productivity losses, and economic growth impediments. The Indonesian government and various organizations are actively working to address stunting through initiatives focusing on nutrition, community engagement, and healthcare worker training and deployment.
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The cost of water pollution in Indonesia
Indonesia is the world's largest island nation and the fourth most populous country, with 275 million people. The country faces unique waste management challenges due to its decentralised populations, steady population growth, and limited governmental frameworks.
The main sources of water pollution in Indonesia include untreated municipal wastewater, industrial discharges, agricultural runoff, and mismanaged solid waste. Deforestation and palm oil expansion further deteriorate water quality. Increased domestic consumption and the growth of the manufacturing and service sectors have led to higher waste generation. Due to inadequate waste collection, transportation, and disposal practices, much of this waste is left uncollected, resulting in extensive plastic waste leakage into water sources.
The impact of water pollution on human health can be significant, causing acute illnesses such as diarrhoea and chronic diseases such as cancer, organ damage, and degenerative conditions. According to UNICEF, a quarter of all children under five in Indonesia suffer from diarrhoea, the leading cause of child mortality in the country. Open defecation and untreated wastewater contaminate water supplies, facilitating the spread of waterborne diseases.
The true extent of harm caused by water pollution in Indonesia is unknown due to insufficient water quality monitoring. However, it is estimated that about 85% of the population is exposed to fecal coliform pollution in water sources, and more than half of Indonesia's rivers are heavily polluted. Two of the country's major river systems are among the most polluted in the world.
While the cost of water pollution in Indonesia has not been specifically quantified, the economic impact of pollution in the country is substantial. The World Bank estimated the economic loss due to health damages related to PM2.5 air pollution in 2019 to be USD 220 billion (6.6% of Indonesia's GDP). This figure reflects the combined costs of treatment, productivity losses, and the value of premature deaths.
To address water pollution, Indonesia is working to improve access to safe water and sanitation. Efforts include developing affordable financing options, implementing cost-effective solutions, and partnering with financial institutions and service providers. Additionally, UNICEF supports the Indonesian government in accelerating access to safely managed water supply, sanitation, and hygiene through advocacy, policy alignment, and behaviour change initiatives.
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The impact of forest fires on Indonesia's economy
Indonesia's forests are essential for biodiversity, economic development, and the cultural practices of Indigenous communities. However, forest fires pose a significant threat to these invaluable ecosystems. Indonesia's forests have been ravaged by fires, with the 2015 fire season being particularly devastating, burning over 2.6 million hectares of land, including rich biodiversity and habitats of endangered species. The economic costs of the 2015 forest fires were staggering, estimated at more than US$16 billion, and claiming over 100,000 premature deaths.
Forest fires in Indonesia are largely human-induced, with fire being a common tool for land clearing, managing semi-forested areas, and preparing land for agriculture. The use of fire is particularly prevalent in rural and less developed villages, where it is a low-cost method for land preparation. The economic growth in these regions has been linked to the increased use of fire, suggesting a complex relationship between development and environmental degradation. Additionally, the creation of new districts has been found to exacerbate the frequency and impact of fires.
The palm oil industry, a critical sector for Indonesia's economy, has also driven widespread deforestation. Indonesia is the world's largest producer of palm oil, and the conversion of land for oil palm plantations has had a profound impact on the nation's forests. While providing significant economic contributions, concerns have been raised about the sustainability of this industry and its long-term effects on forest conservation. The complex interplay between economic growth, traditional land preparation methods, and environmental degradation presents a challenging scenario for Indonesia's future economic and ecological trajectory.
To address the impact of forest fires and mitigate future occurrences, the Indonesian government has implemented fire suppression measures and explored biophysical and technological solutions. However, addressing the underlying causes of forest fires, such as providing economic incentives for land preparation without burning, remains a critical yet less frequently addressed aspect of the country's fire prevention strategy. The economic and ecological challenges posed by forest fires in Indonesia necessitate a comprehensive approach that balances development needs with sustainable land management practices.
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The cost of air pollution on Indonesia's healthcare system
Indonesia's air quality has been heavily polluted for years, with most of the pollution stemming from forest fires, the transportation sector, and energy production. In October 2015, nearly 5,000 fires burned across forests and peatlands, releasing approximately 80 million metric tons of carbon dioxide in a single day—five times more than the entire US economy. The nation's air quality is gradually worsening, with the air quality in Jakarta, the capital, being particularly poor.
The economic burden of air pollution in Jakarta, Indonesia, is significant. Studies have estimated that the economic loss due to PM2.5 and O3-related deaths and illnesses is around 2.2% of Jakarta Province's GDRP, equivalent to USD 2943.42 million for 2019. This figure is lower than national estimates calculated by the World Bank, which put the economic loss of PM2.5-related health damages in 2019 at USD 220 billion (6.6% of Indonesia's GDP). The OECD estimated a lower economic loss of USD 96.4 billion (3.5% of Indonesia's economy) in 2015.
The costs of treating health issues caused by air pollution in Indonesia are substantial. Studies have found that air pollution in Jakarta leads to over 7,000 adverse health outcomes in children, more than 5,000 hospitalizations for cardio-respiratory diseases, and over 10,000 deaths annually. The total treatment costs for each disease are estimated by dividing the yearly treatment costs by the number of hospitalizations for that disease, then multiplying by the number of cases attributed to air pollution. Additionally, patients undergoing inpatient care incur non-healthcare costs due to productivity losses during their stay.
The permanent health impacts of air pollution, such as reduced life expectancy, also contribute significantly to the overall cost. According to the 2019 Pollution and Health Metrics report by the Global Alliance on Health and Pollution (GAHP), Indonesia ranks fourth globally for premature pollution-related deaths. Air pollution reduces the life expectancy of Indonesians by almost 1.2 years, and up to 2.3 years in Jakarta, relative to what it would be if the WHO guideline of 5 µg/m³ for PM2.5 was met.
To address the issue of air pollution and its impact on healthcare, Indonesian citizens have formed a coalition to take legal action against the government. They demand stricter policies, improved monitoring, and the implementation of the right to clean air guaranteed by the 1945 Indonesian Constitution and the 1999 Law on Environmental Protection and Management.
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Frequently asked questions
A 2023 study found that over 7,000 adverse health outcomes in children, more than 10,000 premature deaths, and over 5,000 hospitalizations per year can be attributed to Jakarta's poor air quality. The economic loss due to PM2.5 and O3-related deaths and illnesses is around 2% of Jakarta's provincial GDP, amounting to $791 million in 2019.
Measured in terms of life expectancy, particulate pollution is among the top three greatest threats to human health in Indonesia, reducing life expectancy by almost 1.2 years. In and around Jakarta, residents are expected to lose 2.4 years of life expectancy due to poor air quality.
The World Bank estimated the economic loss of PM2.5-related health damages in 2019 to be USD 220 billion, which is 6.6% of Indonesia's GDP. The OECD found the economic loss to be USD 96.4 billion (or 3.5% of Indonesia's economy) in 2015.
The total treatment costs per year for each disease were divided by the number of hospitalizations for the respective disease to estimate the unit costs of treatment per case per disease. The unit costs were then multiplied by the number of attributable cases calculated for each outcome to obtain the total treatment cost due to air pollution.
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