The cost of environmental damage associated with ecosystem degradation and biodiversity loss is about Rs 6.7 billion (Rs 670 crore) annually, while the cost of health effects due to poor environment is estimated at Rs 6.2 billion (Rs 620 crore), it says.
The total figure of Rs 1,290 crore is about ten per cent of Sundarbans GDP in 2009.
Released here recently, the report 'Building Resilience for Sustainable Development of the Sundarbans' is prepared by the World Bank in collaboration with the West Bengal government.
"The losses stem from a combination of factors associated with unsustainable and inefficient economic activities ? for example, mangrove destruction, impact of cyclones, reduced agricultural yields and unsustainable fisheries as well as destruction of ecosystem services," the report says.
Sundarbans is an archipelago of 54 islands and is home to about 44 lakh people. A UNESCO World Heritage site, it is hit hard by an increase in floods, storms, salinity and erosion caused by rising sea-levels and global warming.
Damage costs from cyclones were found to be the highest in the research at Rs 2.9 billion and include damages to houses, agriculture, human injuries and fatalities.
UN's Intergovernmental Panel on Climate Change (IPCC) projects an increase in sea level and intensification of present climatic variability.
In its report, the World Bank has also taken into account the cost of shrimp losses, carbon sequestration losses associated with degradation of mangrove forest, soil salinity in terms of impact on rice yields, loss of biodiversity and agricultural land due to sea level rise.
Villagers in Sundarbans also suffer from poor health outcomes and increased vulnerability as a result of environmental degradation in the form of adverse natural events, such as cyclones and storms and increases in soil salinity, it says.
The main environmental health risks in the Sundarbans are inadequate water supply, sanitation and hygiene, and household air pollution from use of solid cooking fuels.
These risk factors contribute considerably to mortality and morbidity, particularly among women and children.
The report estimates nearly 80 per cent of the health cost is from health effects among children under five years.
They have calculated that poor environmental conditions are responsible for 3,800 premature deaths and 1.9 million cases of illness every year, mainly among young children and adult women.
"Less than 10 per cent of households recently surveyed in eight blocks and subdivisions in the Sundarbans used appropriate drinking water treatment methods, such as boiling or filtering. Nearly 20 per cent strained water through a cloth and 70 per cent did not treat water prior to drinking," it says.
The World Bank has suggested that benefits of interventions like embankment realignment, mangrove restoration and modernisation of aquaculture practices, controlling household pollution, improving water, sanitation and hygiene will significantly outweigh the costs.