India’s green GDP is improving, but the government faces tough choices to ensure environmental protection

tReports and comments about subsidence of soil in the pilgrim town of Joshimath in the Garhwal mountains of the Himalayas, damage to homes and the evacuation of people in danger rightly indicated the neglect of earlier warnings.

The dispatches also mentioned the environmental risks involved in undertaking ambitious railways, waterways and other projects in a part of the Himalayas already prone to landslides and related disasters due to large-scale deforestation.

Joshimath and the media coverage it sparked comes with greater concern about the environment: poor winter air quality in cities and towns across the northern plains; the mountains of rubbish that have accumulated over the years in urban agglomerations; the wasteful use of a vital but increasingly scarce resource such as water; damage already caused by climate change, such as the melting of Himalayan glaciers; the extent of untreated industrial effluents; and so on.

The message it runs through is that concern about these issues is not translating into effective action to reduce, let alone repair, the damage done to the country’s air, water, land and the land’s natural wealth (forests) over several decades. As under it (minerals as well as water).

Since this is the general embarrassment, it may come as a surprise to most readers that “green accounting” – which calculates sustainable growth by combining traditional calculations of Gross Domestic Product (GDP) with estimates of damage to the natural environment in the pursuit of GDP growth. Shows steady improvement in India’s overall green score. That was the message in a research paper published last October in the Bulletin of the Reserve Bank of India, but it received little media attention.

In fact, it is said that there is a steady closing of the gap between traditional GDP and green GDP. This means that the green GDP is growing faster than the traditional GDP. In other words, India is regaining lost ground.

If you think this contradicts the observed reality, the paper highlights a number of government initiatives that have led to improvement. Among them: the ambitious push for renewable energy, lower material consumption per unit of GDP, lower energy intensity achieved through initiatives such as widespread adoption of LEDs and mandatory energy audits for energy-intensive activities, increased material recycling, and better waste management. Solid through Swachh Bharat Initiative, Namami Gange Program, etc. The paper’s authors acknowledge that some of the improvement in recent years may be due to better data availability.

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tTo the inexperienced eye, the report in the RBI bulletin is only a first shot at assessing green GDP. The methods used to measure it, as well as the available data – and thus the conclusions – would improve if more minds worked on the calculations, and perhaps the definitions too.

While the positive message in the paper is undeniable, the key question is whether green GDP (which is by definition associated with activity flow) also reflects what happens to natural capital stock, in terms of a balance sheet approach. Correct measurement is always the beginning of coherent corrective action. So why not have traditional GDP estimates coupled with the release of green GDP figures? Sustainable development can then be understood and discussed in its appropriate context.

Meanwhile, there are some choices that need to be made and questions that need to be addressed. While construction has been halted for the time being in areas near Joshimath, how does the country avoid making the future repeat the past by neglecting environmental warnings in the Himalayas and elsewhere? Should rice and sugarcane, both water-intensive crops, be grown in water-scarce regions such as Haryana and parts of Maharashtra? Since agriculture is by far the largest consumer of water, could farmers be encouraged not to deplete groundwater at the current unsustainable rate through pricing disincentives and other initiatives such as promoting a less water-intensive method of growing rice? Can the relationship between the engineer and the construction industry be broken? Can we have stronger regulatory and related institutions that will ensure environmental protection?

If not, the impact of Joshimath’s shock would last no more than a week.

By special arrangement with Business Standard

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