Growth neglects environment

The Financial Chronicle , Thursday, February 10, 2011
Correspondent : Praful Bidwai
The government is sending out extre¬m¬¬¬ely negative signals on ecological protection just wh¬en India’s environment is imperilled by the reckless promotion of industrial, mining, power and residential projects. These signals emanate from different functionaries, including prime minister Manmohan Singh himself. Singh said the other day that “incentives” must encourage “all economic decision makers” to act in “environmentally benign” ways. But “it is also necessary to ensure that these regulatory standards do not bring back the licence-permit raj”, which he dismantled in the 1990s.

Jairam Ramesh, in charge of the ministry of environment and forests (MoEF), has also pleaded for a system of “incentives” and “rewards” to encourage responsible environmental conduct. On January 24, he told reporters that he had requested finance minister Pranab Mukherjee to devise such a system of incentive and penalty — essentially some sort of tax concessions. This is weird. Complying with environmental regulations is a duty of project promoters, just as paying taxes is. This does not deserve rewards. Such pleas only serve to detract from the legal obligation to follow environmental norms.

The normally cautious Reserve Bank of India (RBI) too has joined the chorus on “excessive” environmental regulation in India. In its quarterly review of the economy, RBI says Ramesh’s “environment-sensitive policies” are driving foreign direct investment (FDI) away from India. Noting that FDI has declined by “almost 36 per cent” during April-September 2010 over the same period in 2009, RBI says that this is due to the environmental policies pursued, “as manifested in the recent episodes in the mining sector, integrated township projects and construction of ports”.

This apparently referred to Vedanta’s mining project, Lav¬asa Lake City and Posco’s captive port in Orissa. But only one of these projects has been re¬fused an environmental cle¬a¬rance — Vedanta, for extr¬emely strong reasons related to the non-implementation of the Forest Rights Act and threats to the survival of the “primitive” Dongria Kondhs tribals, and to a precious ecosystem. The others have been cleared. Posco’s captive port has received approval based on largely vacuous “conditions”. And Lavasa is being let off with a ludicrously paltry penalty — although it involves serious illegalities and environmental destruction.

Logically, all construction, which violates the Forest Act and Environmental Protection Act, should be demolished on the same principle that the MoEF applies to Mumbai’s Adarsh housing society.

RBI reached its conclusion not on the basis of empirical evidence of investor shyness owing to environmental regulation, but through comparison with other emerging eco¬nomies like China, Brazil and Mexico. The method defies reason. There could be other India-specific factors at work, including low performance of core-sector industries, a falling stock market, and poor infrastructure. A major assumption underlies this assessment: Inherent incompatibility between environmental protection, and rapid gross domestic product (GDP) growth. This is an antediluvian view, which makes little sense in the age of climate change. The true environmental cost of rapid growth and reckless industrialisation is not fully understood. But it could be as high as 7 per cent of GDP annually, says The Energy and Resources Institute, which is no radical think-tank.

Even if this estimate is high, it brings out an essential dual truth. India is undergoing serious environmental degradation. The proposition that we are creating an “environmental licence-permit raj” is totally mistaken. In reality, more than 90 per cent of all projects that apply for an environmental clearance are approved, usually on the basis of extremely sloppy and flawed environmental impact assessment reports.

Typically, as in the case of Posco, Jaitapur and Navi Mu¬mbai airport, the MoEF grants clearances by stipulating “conditions” as an afterthought or face-saving device. Most such conditions don’t address the concerned project’s basic flaws. For instance, asking the Nuclear Power Corporation to commission a biodiversity stu¬dy around the Jaitapur nuclear station site won’t prevent destruction of endangered species or biodiversity loss. Nor will such “conditions” re¬medy nuclear power’s basic problems, including radiation releases, potential for catast¬rophic accidents, or long-acting hazardous wastes.

Ramesh himself admits: In the past decade, “we must have approved about 7,000 projects …, each [with] conditions and safeguards. But unfortunately, we do not have a system of monitoring compliance.”

Singh is plain wrong. India badly needs effective environmental licensing and system of strictly enforceable permits. Or else, our environment will be destroyed. Some of our unique ecosystems like virgin rainforests, vulnerable coastlines and mountain ranges will be irreparably wrecked.

 
SOURCE : http://www.mydigitalfc.com/op-ed/growth-neglects-environment-149
 


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