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Business News/ Opinion / Views | The environment vs growth debate

Views | The environment vs growth debate

The newfound World Heritage Site status of the Western Ghats seems to have reignited the growth-versus-environment debate in India


The newfound World Heritage Site status of the Western Ghats seems to have reignited the growth-versus-environment debate in India

The Western Ghats are considered to be the most ecologically sensitive region in the country after the Eastern Himalayas, and act as the water tanks of peninsular India. The Ghats stretching across roughly 1500 kilometres of India’s western coastline houses some of the world’s richest biodiversity hotspots, and the heritage status could help conserve a few of these sites.

Environmentalists are unhappy as the heritage tag is mostly for patches of the Ghats that are already protected, and because the move will do little to check mining in other sensitive areas of Maharashtra and Goa, which threaten the ecological balance of the region.

The mining lobby has slammed the same move as ‘anti-development’. It fears that the new status and international attention could make it difficult to get clearances in the mineral-rich region. There is also the fear that the heritage status could lend legitimacy to the report of the Western Ghats Ecology Expert Panel (WGEEP) chaired by eminent ecologist Madhav Gadgil. The panel has recommended certain no-go zones for industry and local consultations before any industry is set up in other zones.

photoThe battle for the Ghats is part of the larger battle for resources in the country, with competing and sharply diverging claims on the best way to ‘develop’ those resources, a battle that is likely to get fiercer as the demands of a growing economy and rising population take a toll on our natural capital.

As with several contentious issues, there seems to be greater sound and fury than light in the debate. One of the key reasons for this seems to be the difficulty in measuring the costs and benefits of the various alternatives on the table. For long, economists have struggled to accurately compare the benefits that an industry offers in a region with the costs it might impose on local habitats. A recent United Nations report on inclusive wealth prepared under the guidance of one of the pioneers in this field, Partha Dasgupta, seems to show a way out of this problem.

The inclusive wealth report, despite what its name may suggest is not about inequality but is inclusive in the sense that it computes for the first time, the aggregate capital base of 20 top economies by adding up their economic or manufactured capital (such as roads and factories), human capital (the population’s education and skills) and natural capital (such as forests and mines). The UN wealth report thus provides, for the first time national balance sheets that give us an indication of how sustainable a country’s growth path is. India is somewhere in the middle among these nations with an average per-capita growth rate of 0.9% in inclusive wealth between 1990 and 2008.

The major achievement of the wealth report is that it turns the conflict between the uses of different resources into an asset-management problem. Thus, a country might lose some amount of manufactured or natural capital and still make up for it through higher investments in human capital or infrastructure.

To be sure, there are two important caveats to the report. First, there are several gaps in the data (for instance, the exclusion of natural goods such as clean air, which are literally priceless) and so the database is only an indicative one. Second, all kinds of natural capital (for instance, ecosystem services of forests that help regulate rains) may not be substitutable.

Nonetheless, the wealth report does underline the flawed nature of the growth-versus-environment debate. The two ends need not be in conflict when a comprehensive metric such as inclusive wealth is used to guide policy making, the authors of the report note. Dasgupta himself is chairing a committee appointed by erstwhile environment minister Jairam Ramesh to compute an alternative national accounting system for India, on the lines of the inclusive wealth report.

In the long run, such accounts will put development policy on a sounder footing. In the near term, the government’s approach to the Gadgil report will be a test of its commitment to protect our natural wealth.

Whatever be the fate of its other recommendations, the government should heed the Gadgil report’s advice on engaging in the widest possible public consultations. In the absence of accurate measurements, all policy alternatives must be debated openly so that there is some consensus on the gains and losses from a policy choice, if not on the choice itself.

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Published: 05 Jul 2012, 06:20 PM IST
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