The key environmental challenges that the country faces relate to the nexus of environmental degradation with poverty in its many dimensions, and economic growth. These challenges are intrinsically connected with the state of environmental resources, such as land, water, air and their flora and fauna.
The key environmental challenges that the country faces relate to the nexus of environmental degradation with poverty in its many dimensions, and economic growth. These challenges are intrinsically connected with the state of environmental resources, such as land, water, air and their flora and fauna. The proximate drivers of environmental degradation are population growth, inappropriate technology and consumption choices, and poverty, leading to changes in relations between people, ecosystems and development activities such as intensive agriculture, polluting industry and unplanned urbanisation.
However, these environmental challenges give rise to environmental degradation only through deeper causal linkages, in particular, institutional failures, resulting in lack of clarity or enforcement of rights of access and use of environmental resources, policies which provide disincentives for environmental conservation (and which may have origins in the fiscal regime), market failures (which may be linked to shortcomings in the regulatory regimes), and governance constraints. Environmental degradation is a major causal factor in enhancing and perpetuating poverty, particularly among the rural poor, when such degradation impacts soil fertility, quantity and quality of water, air quality, forests, wildlife and fisheries. The dependence of the rural poor, in particular, tribal societies, on their natural resources, especially biodiversity, is self-evident.
Women in particular face greater adverse impacts of degradation of natural resources, being directly responsible for their collection and use, but rarely for their management. The commitment of time and effort in the collection of these resources has a direct impact on the capacity of rural women to devote time to raising and educating children, enhancing their earning skills, or participating in gainful livelihoods.
The poor are also more vulnerable to loss of resilience in ecosystems. Large reductions in resilience may mean that the ecosystems, on which livelihoods are based, break down, causing distress. The loss of the environmental resource base can result in certain groups of people being made destitute, even if overall, the economy shows strong growth. Further, urban environmental challenges and degradation, through lack of (or inappropriate) waste treatment and sanitation, industry and transport related pollution, adversely impacts air, water, and soil quality, and differentially impacts the health of the urban poor.
This, in turn, affects their capability to seek and retain employment, attend school and enhances gender inequalities, all of which perpetuate poverty. Poverty itself can accentuate environmental degradation, given that institutional failures persist. For the poor, several environmental resources are complementary in production and consumption on other commodities (e.g. water in relation to agricultural production, fuel wood in relation to consumption of food), while a number of environmental resources are a source of income or food (e.g. fisheries, non-timber forest produce). This is frequently a source of cumulative causation, where poverty, gender inequalities, and environmental degradation mutually reinforce each other.
Poverty and environmental degradation are also reinforced by, and linked to population growth, which in turn, depends on a complex interaction of diverse causal factors and stages of development. Stabilisation of population is a necessary condition for sustainable development. Economic growth, in its turn, bears a dichotomous relationship to environmental degradation. On the one hand, growth may result in “excessive” environmental degradation through the use of natural resources and generation of pollution aggravated by institutional failures.
If impacts on the environmental resource base are neglected, an incorrect picture is obtained from conventional monetary estimates of national income. On the other hand, economic growth permits improvement in environmental quality by making available the necessary resources for environmental investments and generating societal pressures for improved environmental behaviour, and institutional and policy change. Unsustainable consumption patterns, particularly in industrialised countries also have serious adverse impacts on the environment, both local and global. The global impacts are largely manifest in developing countries and further, accentuate poverty.
It is increasingly evident that poor environmental quality has adversely affected human health. Environmental factors are estimated as being responsible in some cases for nearly 20 percent of the burden of disease in India, and a number of environment-health factors are closely linked with dimensions of poverty (e.g. malnutrition, lack of access to clean energy and water). It has been shown that interventions such as reducing indoor air pollution, protecting sources of safe drinking water, protecting soil from contamination, improved sanitation measures, and better public health governance, offer tremendous opportunities for reducing the incidence of a number of critical health problems.
It is also evident that these environmental protection measures would be difficult to accomplish without extensive awareness raising, and education, on good practices with respect to public and private behaviour. Institutional failures, referring to unclear or insufficiently enforced rights of access to and use of, environmental resources, result in environmental degradation because third parties primarily experience impacts of such degradation, without cost to the persons responsible for the damage. Such rights, both community based and individual, are critical institutions mediating the relationships between humans and the use of the environment. Traditionally, village commons water sources, grazing grounds, local forests, fisheries, etc., have been protected by local communities from overexploitation through various norms, which may include penalties for disallowed behaviour.
These norms, may, however, be degraded through the very process of development, including urbanization, and population growth resulting from sharp reduction in mortality and also through state actions which may create conditions for strengthening of individual over communitarian rights, and in doing so allow market forces to press for change that has adverse environmental implications. If such access to the community resources under weakened norms continues, the resources would be degraded, and the livelihoods of the community would suffer. Policy failures can emerge from various sources, including the use of fiscal instruments, such as explicit and implicit subsidies for the use of various resources, which provide incentives for excessive use of natural resources. Inappropriate policy can also lead to changes in commonly managed systems, with adverse environmental outcomes.
Another major set of challenges arises from emerging global environmental challenges such as climate change, stratospheric ozone depletion, and biodiversity loss. The key is to operationalize the principle of common but differentiated responsibility of countries in relation to these problems. Multilateral regimes and programmes responding to these global environmental issues must not adversely impact the development opportunities of developing countries. Further, the sharing of global natural resources must proceed only on the basis of equal sharing per-capita across all countries.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.