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Business News/ Opinion / Can India think beyond the ‘grow now, pay later’ model?

Can India think beyond the ‘grow now, pay later’ model?

Bureaucrats worry that giving too much importance to sustainability concerns might smother growth

Jairam Ramesh rounded off with a warning about the current climate of opinion in New Delhi’s policy-making corridors, where anyone who raises any environmental concern is immediately branded as a growth-phobe. Photo: Ramesh Pathania/Mint Premium
Jairam Ramesh rounded off with a warning about the current climate of opinion in New Delhi’s policy-making corridors, where anyone who raises any environmental concern is immediately branded as a growth-phobe. Photo: Ramesh Pathania/Mint

Sometimes the irrational becomes so much a part of what passes for common sense that any attempt at rational thinking begins to seem like the intellectual equivalent of a snake eating its own tail. Such has been the case with what has come to be known as the growth versus sustainability debate.

I have never been able to understand, for instance, how there came to be a versus between growth and sustainability. Does it even make any sense to argue for growth that is NOT sustainable? Put like that, the answer is obvious.

And yet, hardly a week goes by in our national capital without some seminar or roundtable or panel discussion herding the best and the brightest minds of the country to expound on the growth versus sustainability conundrum.

Otherwise sane individuals from the corporate sector confabulate on whether sustainability is worth it if it’s going to undercut profits. Bureaucrats worry that giving too much importance to sustainability concerns might smother growth. Studies are conducted to find out whether companies that have signed on to sustainability protocols are more, or less, profitable than those that haven’t.

As for the sustainability advocates themselves, confronted with an economic system premised on the logic of the market on the one hand, and a social system beholden to ever-expanding economic growth on the other, they have been scrambling to demonstrate that sustainability can actually be compatible with high growth as well as high profit. Well, to put it bluntly, that’s a lie. If this was true, it would have happened already.

Instead of fighting the hard intellectual battle to convince and win over companies and policymakers to the reality principle, sustainability advocates—many of whom are themselves opportunistic migrants from the corporate sector who have now found something to do in the non-profit sector—have been executing a typical Trojan horse manoeuvre. In the name of getting a buy-in for sustainability from the corporate lobby, they have instead bought into—or should we say, pathetically surrendered to—the very logic that brought sustainability issues to the global centre stage in the first place.

So, instead of presenting alternatives to the growth-centric model—which entails the highly fraught task of interrogating the received wisdom of the age—they have been trying to rehabilitate growth mania by conjuring sustainability solutions that are compatible with business as usual. The ideological lever through which they accomplish this feat of intellectual contortionism is, of course, technology. And more recently, finance.

So, green technology is supposed to solve our problems of environmental degradation, global warming, deforestation, river pollution, cancer, and so on. And finance will play a role by incentivizing the use of green technology—through a judicious mix of subsidies and taxes—and also through public and private investments in green technology research.

All these arguments were played out at a panel discussion I happened to attend last week. Different speakers held forth on what might be the best ways to bring technology and finance in alignment with environmental concerns so as to produce green growth. Yes, green growth—and it sure wasn’t a reference to growing our forest cover. There were also frequent references to green coal and clean coal. George Orwell might have had an opinion on these terms, but never mind.

One of the speakers at this programme was Jairam Ramesh, former environment minister. Ramesh made a lot of sensible points, as he has been doing ever since he ceased to be the environment minister.

Three of them are worth recapitulating here: one, environmental issues in India, unlike in the West, are not lifestyle issues but livelihood issues—involving access to forest, land, water, common pastures; two, environmental issues are a public health issue, pertaining to various illnesses caused by air pollution, water contamination, carcinogens in the food chain, etc; and three, it is not the people who need to be educated about sustainability but the corporations and policymakers.

Ramesh rounded off with a warning about the current climate of opinion in New Delhi’s policymaking corridors, where anyone who raises any environmental concern is immediately branded as a growth-phobe. But characteristically, he undermined his own central thesis—that India should aim to be an exception to the grow now, pay later model—by failing to present, or engage with, any alternatives to what he himself referred to as growth and technology triumphalism.

Speaking of alternatives, why not aim at equilibrium instead of growth, for instance? Or a steady state? As Adam Smith demonstrates in The Wealth of Nations—arguably the one text most misrepresented by neo-liberal economists—a truly free market economy militates against the concentration of wealth, because profits tend to decline over the long term. And yet, in our current economic paradigm, as political scientist Deborah Boucoyannisputs it, “high firm profits … are treated as a sign of economic success that have to be sustained over time."

In other words, it is in its rendering as natural the structural necessity of sustaining high profits for a select few that the ideological function of free market economic thinking stands exposed—the function, namely, of representing the patent irrationality of infinite growth as a rational pursuit. Technology, then, would resolve the fundamental contradiction where infinite growth would have to be sustained in a world of finite resources, and it would do so by conjuring ever-increasing productivity.

So, before you know it, the question of sustainability—which was originally a question of sustaining life on the planet over the long term, a question of organizing our civilization in such a manner that future generations would also be left with adequate resources to sustain themselves—has morphed into one about sustaining economic growth. And from sustainable economic growth, it is hop, skip and jump to sustainable profits—which is where the general understanding of the concept of sustainability rests today among the business community.

True, companies are more likely to give you a hearing if you talk to them about how they can capture value through sustainability practices that reduce energy costs, or reduce wastage. They are more likely to listen to you if you talk to them about how sustainability concerns integrated into strategic planning could help minimize operational risks due to climate change.

But these little tweaks, while they may help business sustainability, would do little to affect sustainability defined in planetary, or inter-generational terms. It is not that difficult to see why: there really is no sustainable way of extracting bauxite from a mountain; no sustainable way of submerging a forest so that a big dam could be erected; and no sustainable way of storing radioactive nuclear waste.

And yet, none of the so-called green growth advocates are willing to challenge the assumptions behind a growth-centric economic system hostile to sustainability on a planetary level. This failure on their part is all the more baffling because India, perhaps more than any other nation of equivalent size, is extremely vulnerable to the deleterious consequences of the grow now, pay later model.

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Published: 25 Jun 2014, 12:27 PM IST
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