Development sans environmental preservation is a mirage.
Hence, India must calculate its “Green GDP” to factor in the value of the environment in its growth.
What are the environmental impacts of development?
A recent World Bank report states that it cost India about $550 billion amounting to about 8.5% of its GDP, due to air pollution.
Experts have also vouched that the cost of externalities due to water pollution and land degradation were possibly far higher.
Our disregard for environment in pursuit of advancing economic development is raising the risk of desertification and land degradation significantly.
Not surprisingly, estimates are that our food production could see a loss of 10-40% if these trends continue unabated.
While natural capital like water and clean air is self regulating, it needs to be handled sustainably in order to avoid depletion.
For this, it is crucial to understand the environmental footprint of our economic activities, which also needs to be accounted in our GDP.
How can environmental footprint be accounted in GDP?
Natural capital can cover entire ecosystems such as fisheries and forests, besides multiple other hidden and overlooked ecological services.
Regeneration of soil, nitrogen fixation, nutrient recycling, pollination and the overall hydrological cycle are all components of natural capital.
Valuing such ecosystem services is challenging as these aspects can’t be monetised directly, but their depletion does reduces productivity.
Giving a monetary value to this depreciation to natural capital is also not exactly possible as the numbers are interpretative in nature.
To address these issues, concepts like “environmental Kuznets curve” that plots “per capita GDP” against “Sulphur dioxide concentration” in the local air have been put forward.
What are the possible dangers?
India routinely suffers from high levels of air pollution that impose costs on local transport, health and liveability in urban and rural areas.
When economic growth leads to the destruction of forests, wetlands, mining or even urban expansion, it is typically the poorest who suffer.
Full-scale ecological collapse is already visible in the Darfur region of Sudan and countries in the Horn of Africa.
Indian people and policy makers need to act immediately and coherently to arrest such rapid socio-economic decline.
What have been the significant efforts taken thus far?
India’s current national accounts already do incorporate such environmental considerations in a limited fashion but it is not comprehensive.
In this context, it was planned in 2013 to release a comprehensive “Green GDP” estimate in 2013, and the various departments started working on it.
But lack of micro level data on natural capital formation (and destruction), proved a major constrain and the exercise never saw completion.
The 12th Five Year Plan undertook groundwater resource mapping at the national level, which was indeed a significant exercise
Similar comprehensive exercises are now essential for data on land usage, forests and mineral wealth.
