Greenomics: Livelihood and development as a composite whole

Over the past few months, Indian government has witnessed major commotion on grounds of environmental stability and economic growth. The government has been striving to come to a consensus between the dilemma of focusing on developmental goals and simultaneously maintaining ecological balance. There is an incessant tension between those who support development and those who fight for environment protection. The two groups do not look eye to eye and with every passing day, the gap seems to be widening. Jairam Ramesh, Minister of Environment and Forests, Government of India very aptly puts it:

“Choices need to be made about large projects that are considered central to the economic progress, but are detrimental to the environment. Let us all accept the reality that there is undoubtedly a tradeoff between growth and environment.”

Forests: Nature at Your Service
Forests: Nature at Your Service

Global host of the World Environment Day, India, reiterated the need to approach the issue of environment, livelihood and development as a composite whole. Today our country is challenged by losses of natural areas, ecosystem degradation and the related problems of increasing water scarcity, soil erosion and biodiversity losses. As forests cater multiple benefits to society and the economy, their losses are particularly concerning. However, these “ecosystem services” are often taken for granted by those who use them daily, and therefore decline at an alarming rate.

According to the current understanding of the green economy concept, one of the main elements which support the transition to a more sustainable macro approach is- preservation and sustainable use of existing natural resources. This element recognizes the importance and economic value of natural resources, such as freshwaters, forests, soils, coral reefs and ecosystem services provided by functional and healthy ecosystems.

“Ecosystem Services”are often taken for granted
“Ecosystem Services”are often taken for granted

Forest envelop is responsible for, agricultural soil conservation, water recharge, flood and drought control, climate stability and the overall ecological balance; yet, very little money is committed in its conservation compared to what is spent for other essential components of the nation’s development such as mining, energy, industries etc. Just as public investment in infrastructure is needed, so also public investment in “ecological infrastructure” is necessary for agriculture, human health, and livelihoods.

One way to attract more investments into ecosystem protection- is to appraise the economic value of the services they provide and integrate it into the national wealth accounts, a technique referred to as “Green Accounting”.

While India’s policy makers have their eyes engrossed- on reaching a double-digit GDP growth, supporters of green accounting question the relevance of GDP itself as an adequate indicator of economic development. They claim that it is too constricted, as it does not account for changes in the value of its natural assets. By allowing nature its well-deserved visibility in national and state accounts, one of the main decision-support instruments of national political economy, their purpose is to equip India with a better scope to navigate the troubled waters of the 21st century.

Inger Andersen, Vice President, World Bank recently stated

“Without taking care of the environment we are shaving digits off GDP and, therefore, limiting our very potential for the future.”

"Green Accounting": A way to attract more investments into ecosystem protection
"Green Accounting": A way to attract more investments into ecosystem protection

Strategies to achieve greener growth are needed. If we want to make sure that the progress in living standards we have seen these past fifty years does not grind to a halt, we have to find new ways of producing and consuming things, and even redefine what we mean by progress and how we measure it. The current changing patterns of growth, consumer habits, technology, and infrastructure are a long-term project, and we will have to live with the consequences of past decisions for a long time. This “path dependence” is likely to intensify systemic environmental risks even if we were to get policy settings right relatively swiftly.

Author: Abhishek Ranjan
Abhishek is a Business Journalist in the making. He blogs at simplifyingbusiness.wordpress.com

Greenomics is a 6 part series which will be published every Friday. The next part to this series will be published on the 17th of June.

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