Our growth path is environmentally unsustainable

The popular narrative on India’s economic development continues to focus on trends in GDP growth. Its consequences on long term economic development is scantly discussed in contemporary literature. This gap in literature calls for a wider debate on whether India’s remarkable achievement in economic growth has reflected in its environmental outcomes? Whether India’s pursuit of economic growth is founded on the principle of sustainable development?

If one traces carefully the growth path of the Indian economy in two different time periods — before and after economic liberalisation — growth before 1991 was comparatively slow but the economy was on the path of strong sustainability in relation to conserving natural capital, both renewable and non-renewable resources. Indians produced less environmental footprint and were endowed with relatively better per capita natural resources, reflected in better health outcomes in major cities before 1991.

In contrast, after liberalisation, the economy moved onto high growth rate but is on the path of weak sustainability, with serious environmental degradation and negative externalities reflected in the increasing health costs due to rising air pollution in major cities of the country. This is evident with the loss of biodiversity, degradation of virgin forests, increasing impacts of climate change, pollution of land, water and air, and dominance of invasive species.

Misguided economic policies, such as “grow first, clean later” has already endangered the environment and human well-being in India. The National Mission for Clean Ganga, with a whopping project cost of Rs 20,000 crore, is an example of the environmental costs of myopic economic growth. The National Green Tribunal has declared the mission a failure, saying, “Not a single drop of water of the Ganga has been cleaned”.

The environmental degradation is the by-product of unsustainable trends in consumption and production patterns of neo-liberal policy, which basically relies on a weak view of sustainability that assumes that natural capital and man-made capital are essentially substitutable and there are no fundamental differences between them for generating well-being. It assumes that the only necessary condition is that the total value of aggregate stock of capital should be at least maintained, if not increased, for the sake of future generations. This view suggests that natural resources can be substituted or interchanged with manufactured goods and services.

For example, utilisation of forests, fossil fuels, iron ore, coal, etc., produces environmental pollution but this is not seen as a problem as long as the stock of machinery, roads and ports are built in compensation. The wealth generated
by exploiting natural resources is assumed to counterbalance environmental degradation.

The weak sustainability view relies on two other assumptions: the first is that, as the economist John Maynard Keynes asserted, “in the long run, we are all dead”. Therefore, economic development should be realised in our life-time; and the second assumption is based on the Environmental Kuznets Curve Hypothesis, which states that environmental degradation increases up to a certain level of economic growth and then, as income goes up further, it decreases.

At what cost?

Paradoxically, the rapid economic growth we have had in a short span of time has endangered the quality of human wellbeing and the quality of environment in the 21st century. There is no scientific evidence to show restoration or improvement in environmental quality despite higher economic growth and rising personal incomes.

The per capital availability of fresh water, both in quality and quantity, has gone down drastically, making India a water-scarce country. The air in major cities of India is carcinogenic. The health costs associated with the environmental burden of diseases such as bronchitis are steadily increasing. This begs the question: economic growth at what cost, whose cost?

The blatant rejection of the recommendations of the Kasturirangan Committee report on the conservation of Western Ghats by the Karnataka government is a classic example of myopic economic growth and our movement against the principle of strong sustainability.

There is an urgent need to recognise the environmental limits and non-substitutability of natural capital. Already, the Western Ghats are endangered due to the wanton destruction of forests, losing key native flora and fauna, and the death of many perennial rivulets and rivers, which cannot be reversed. It is time to make economic growth more sustainable by understanding how the environment functions.

Sustainability is a precondition for human wellbeing, because there are many provisions of essential ecological services and processes such as the production of oxygen, water, climate, virgin forests, soil formation, biodiversity, etc., that underlie its critical functioning. Further, the present generation has no right to impose high environmental costs on future generations by exploiting all the natural capital for our current wellbeing. The future generations have every right to live on earth with adequate supply of nature’s essential ecological services.

Therefore, there is an urgent need to incorporate all ecological services of nature or biodiversity in economic accounts. The current system of GDP accounting does not value these ecosystem services and resources and their degradation and depletion. This suggests that harvesting of forests, fish and depletion of minerals show a positive gain in terms of GDP but without accounting for the commensurate decline in natural assets or wealth.

A ‘Green GDP’ would help account for environmental degradation in GDP growth and to manage the economy along with environmental sustainability. Reversing unsustainable development in India essentially hinges on securing environmental quality while growing economically and ensuring just distribution of wealth and natural resources between the present and future generations.

(Krishna Raj is Professor and Dhananjaya PhD Scholar, CESP, Institute for Social and Economic Change, Bengaluru)