Nithin Kamath, founder and CEO of Zerodha, shared his thoughts on Linkedin over the growing pollution crisis in India and its impact on the country’s luxury real estate market. Referencing Knight and Frank’s Q4 2024 Global Luxury Market Rankings, Kamath pointed out that Delhi, Mumbai, and Bengaluru were among the top 15 cities globally in terms of rising home prices.
However, Kamath emphasised a crucial factor often overlooked in real estate discussions—air quality. “The pricier cities in India have worse air quality,” Kamath wrote in his post. “These are averages for the city; most places have a higher AQI.” His remarks came as a stark reminder of the hidden environmental costs of urban growth.
On a broader scale, Kamath referred to a report from @OurWorldindata, which explains that pollution levels typically follow a U-shaped pattern in a country’s development. Initially, pollution rises dramatically as economies industrialise but tends to fall as countries reach higher levels of development. Kamath noted that this pattern has been observed in the US, UK, and China.
Yet, Kamath pointed out that while pollution levels may naturally decline with development, it doesn’t have to be accepted as an inevitable consequence of growth. He specifically highlighted two major pollutants—sulfur dioxide (SO₂) and nitrogen oxides (NOₓ)—which are tied to the country’s energy and transportation sectors.
SO₂ emissions, primarily caused by burning coal, remain a significant issue in India, as coal still makes up around 70% of the country’s energy mix. Kamath suggested installing scrubbers in power plants as an effective way to capture sulfur emissions, a practice that has already led to a decrease in sulfur emissions in China, despite the country’s continued coal use. However, Kamath noted that India has yet to adopt such measures, and both coal consumption and SO₂ emissions are on the rise.
Similarly, Kamath discussed the role of transportation in nitrogen oxide emissions, which are the largest source of pollution in urban areas. With more people living in densely populated cities, stricter emission standards and electrification of transport fleets could significantly help in reducing pollution levels.
The Zerodha CEO concluded his post with a sobering prediction: the long-term consequences of pollution will inevitably feed into the pricing of goods and services. “Higher pollution means more health issues, and insurance companies are apparently considering increasing health premiums by 10%-15% for people in Delhi,” Kamath said. He went on to emphasise that pollution’s impact on health could create ripple effects, contributing to rising prices and inflation across various sectors.
Kamath’s remarks serve as a call to action for both the government and private sectors to prioritize technological solutions that reduce pollution, not only for the sake of public health but also to mitigate future economic challenges.