Many contemporary Indian economists emphasize on a high-growth oriented economic policy for India. Examination of the government’s expenditure, on the other hand, points to an unwarranted rise in expenses due to natural calamities. Read on, as our contributor delineates a link between the two.
Bill McKibben, the path-breaking American environmentalist, journalist and author, once said:
“Climate change is the single biggest thing that humans have ever done to this planet. The only thing that needs to be bigger is our movement to stop it.”
The recent months have seen an explosion of initiatives in the direction of mapping the way of growth and development in a world facing the brunt of climate change. A resulting aspect of it is the reflection of the deteriorating health of our environment, as seen in the steep rise in natural calamities and disasters around the world. To put things into perspective, a 2019 report by the international think tank Germanwatch has brought to light some particularly bad news for India. It says that between 1998 and 2017, India lost, on an average, 3,660 people every year because of extreme weather events. Moreover, during the same time, the global losses due to climate change related natural calamities were pegged at a whopping $3.47 trillion with an estimated amount lost in India to be more than a few hundred billion dollars.
Back home, we are facing a slumping economy with poor employment and growth rates. The former Deputy Governor of the Reserve Bank of India (RBI), Dr Rakesh Mohan, (Senior Fellow at the Jackson Institute for Global Affairs, Yale University and Distinguished Fellow at Brookings India), in his economic address regarding the current Indian growth trajectory titled ‘Moving India to a New Growth Trajectory’, emphasized the need of an employment-oriented growth policy for India and a shift of attention to higher growth rates in industries that are labour-intensive and in the organised sector. Dr. Mohan opines that increasing savings and ensuring the growth of the manufacturing sector along with high exports is the key to achieving a growth rate of at least eight percent per annum and that it must be understood that effective distribution is necessary but we can’t distribute unless we grow. In order to achieve this, it is crucial to encourage domestic savings, step up tax collection and invest in building the necessary infrastructure.
On the other hand, an independent report by the Earth Security Group shows that despite a steady framework in place, India lags significantly behind countries such as the US and China in building resilience to natural hazards. These hazards cost us $9.8 billion a year, either through the National Disaster Management Authority (NDMA), the National Disaster Relief Fund (NDRF), the State Disaster Relief Funds (SDRF) or other means. This is also reflected in the conclusions of risk analysis company Verisk Maplecroft, whose latest hazard risk indices have ranked India’s population first in a list of those most exposed to natural hazards, as reported by the Guardian.
In addition, the country’s dependence on agriculture leaves it highly susceptible to the aftermath of extreme weather events. India derives a greater proportion of GDP (17%) from agriculture than the global average (4%) and the sector employs 47.2% of the population, compared to the global average of 30.7%. Hence, India must find solutions to make its economy less exposed. This may be traced back to Dr Mohan’s policy changes that encourage the working population to switch to manufacturing rather than pursuing an agrarian source of income. In context, manufacturing is not immune to these effects, for as a sector it constitutes a large proportion of direct carbon emissions, and is indirectly responsible for additional carbon emissions through electricity use. Furthermore, for manufactured goods which are powered (such as appliances, electronics and automobiles), carbon emissions are also created from product use, not their manufacture. Considering this greenhouse gas footprint, it is clear that manufacturing will be significantly impacted by any future climate change regulatory policy changes, and must now, as a sector, begin to confront the risks and opportunities that climate change poses. This includes factoring the darts that aim at curbing climate change into core business strategies as well as creating a solid framework for the sector as a whole. Game-changing strategies that propel companies to jump ahead of competitors by creating new markets as well as innovating in the field of technology by means of reshaping policy are beginning to emerge.
Corporate giants such as the General Electric Company (GE) in the United States of America (USA) and BP PLC in the United Kingdom are working together to develop up to 15 clean-burning fossil-fuel based power plants that will separate and burn hydrogen while capturing and piping the resulting carbon dioxide into either deep geologic formations or existing oil wells to boost petroleum production. At the same time, BP is also partnering with DuPont in the USA to produce bio-butanol, a biologically-derived, lower carbon transportation fuel that could replace ethanol for a wide-range of applications in the economy for significant market segments. Another side to the story is the need of the hour to focus on the approach to the issue of climate change. Instead of having to resort to the ‘response, rehab, rebuild’ model, we should be striving to make long-term and broad-impact changes in our economy to reduce the negative impacts of growth on the environment. This is the only way to break the vicious-trap of destruction and redevelopment. In this context, the newly formulated Jan Shakti Mantralaya of the government can prove to be one of the path-breaking endeavours. India is under pressure to mitigate climate change by controlling carbon emission rise but at the same time we will also need to adapt to and be prepared to respond to increased water scarcity, droughts, floods, cyclones and other natural disasters. An approach that is water-tight in economical, ecological and social sense is the way forward.
References:
BBC News
The Guardian
Down to Earth Climate Change Report
Dr. Rakesh Mohan’s Website
The Better India
Centre For Climate and Energy Solutions, USA.
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