Tuesday, December 18, 2012

ENVIRONMENT AND ECONOMIC DEVELOPMENT: A CORRELATION

Environment and economy are interdependent and need each other. Development that ignores its repercussions on the environment will destroy the environment that sustains life forms. What is needed is sustainable development which will allow all future generations to have a potential average quality of life that is at least as high as that which is being enjoyed by the current generation.

The term ‘sustainable development’ was popularized in Our Common Future, a report published by the World Commission on Environment and Development (WECD) p.43”development which meets the needs of the present without compromising the ability of future generations to meet their own needs”. Acceptance of the report by the United Nations General Assembly gave the term political salience and in 1992, leaders set out the principles of sustainable development at the United Nations Conference on Environment and development in Rio de Janerio, Brazil.

Sustainable development means convergence between the three pillars i.e. economic development, social equity and environmental protection. Sustainable development is a fluid concept and various definitions have emerged over the past two decades. Despite an on-going debate on the actual meaning, a few common principles tend to be emphasized. The irst is a commitment to equity and fairness As such priority should be given to improving the conditions of the world’s poorest and decisions should account for the rights of future generations. The second is a long-term view that emphasizes the precautionary principle, i.e., “Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”. Third, sustainable development embodies integration, and understanding and acting on the complex interconnections that exist between the environment, economy, and society. This is not a balancing act or a playing of one issue off against the other, but recognizing the interdependent nature of these three pillars.

Many papers have been written on the relationship between economic growth and environmental preservation since R.C. d’Arge published his Essay on economic growth and environmental quality in 1971. The main questions arising before the environmentalists are: Is long-run economic growth compatible with environmental preservation? Is sustainable growth viable? What would be the effect of greater concern for the environment over economic growth? How do environmental externalities influence growth rate, and thus, what is the effect of environmental policy on economic growth?

These questions have been analyzed in many of these papers in the framework of stationary models and exogenous growth models. In this type of models, either there is no long-run growth or if there is long –run growth it is exogenously determined, so that environmental quality may have a negative effect on capital accumulation or no effect on the growth rate. In addition, in this literature the emphasis has been put on analysis of the efficient growth path without paying much attention to growth based on market equilibrium. Sincce the appearance of the new theory of growth at the end of the eighties and the start of the nineties, a series of papers has been published in which these questions are addressed in the framework of endogenous growth models.

Many studies have explored the development – environment relationship. The Environment Kuznet Curve (EKC) is one hypothesis that has elicited much attention (Arrow et al.1995). The EKC concept was put forward in early 90s by Grossman and Krueger (1991) as well as in World Development Report (Shafik and Bondyopadhaya 1992). This hypothesis establishes an inverted U-shaped relationship between economic growth and environment degradation. It assumes that environmental gradation increases when per capita income reaches a certain point, or the turning point.

Relationship between Environmental Kuznet Curve and Economic Development:

In the early stages of economic growth, the awareness of environmental problems is low or negligible and environment friendly technologies are not available. Environmental degradation increases with growing income up to a threshold level beyond which environmental quality improves with higher capita income (Dinda 2004).

Kuznet (1955) predicted that the changing relationship between per capita income and income inequality is an inverted U-shaped curve. As per capita income increases, income inequality also increases at first and then starts declining after a turning point (TP). So the distribution of income becomes more unequal in early stage of income growth and then the distribution moves towards greater equality as economic growth continues (Kuznet 1955). After 1990, the Kuznets curve got a new existence i.e. the level of environmental degradation and per capital income follows the same inverted U – shaped relationship as does income inequality and per capita income. The inverted U-shaped relationship between economic growth and measured pollution indicators) environmental quality) is known as EKC. Kuznet’s name was attached to the inverted U-shaped relationship kuznet curve which ascertains the relationship between income inequality and economic development. However, Panayotou (1993) first coined it as the Environmental kuznet Curve. The relationship can be shown by an inverted U – shaped EKC. The EKC establishes a long term relationship between environmental impact and economic growth. As economic development speeds up with the intensification of agriculture and other resource extraction, at the take-off stage, the rate of resource depletion begins to exceed the rate of resource regeneration and waste generation increases in quantity and toxicity.

At higher levels of development, structural change towards information-intensive industries and services coupled with increased environmental awareness, enforcement of environmental regulations, better technology and higher environmental expenditures results in leveling off and gradual decline of environmental degradation. As income increases, there is transition in the economy. Economy moves from natural process of economic development i.e. from a clean agrarian economy to a polluting industrial economy, and again to a clean service economy (Arrw et al. 1995)

Economic development can be traced back to the industrial revolution and to the industrial development in the modern world. The industrial revolution irreversibly changed the nature of labour, consumption, family structure, social structure and the thought processes of the individuals. The amazing thrust in the field of production, power, science and technology brought along with it even the bad effects of environmental degradation. Development may b defined as double-edged sword, which has far reaching effects on the environment. The ill effects of development are many but unlike the benefits, they are not visible and are camouflaged.

The following ill effects of development had been discussed in agenda 21 of the Rio Conference of 1992:

Atmospheric Pollution: includes (i) Smog caused by chemical reactions between pollutants derived from different sources, mainly automobile exhaust and industrial emissions, acid rain occurs when pollutant like sulphuric acid combines with droplets of water in the air, the water becomes acidified. (ii) Acid rain kills strees and harms animals, fishes and other wild life, green house effect or global warming is a common fact of atmospheric pollution. (iii) Global warming is increasing due to increase in carbon dioxide content in the air . This carbon dioxide builds up a blanket and traps the heat from going out which causes unusual heat in the earth’s surface. (iv) Ozone depletion is the major trouble of the development rather industrial development. Our earth is surrounded by layers of atmosphere, ozone gas which protects harmful ultra violet rays from coming in the earth’s surface is found in the stratosphere. The release of chlorofluorocarbons (CFCs) from aerosol cans, refrigerators, air conditioners etc. are continuously harming ozone layer causing holes and allowing the radiation to reach the earth.

Air pollution effects health in many ways, may be short or long term short term effects include irritation of eyes, nose, throat such as bronchitis pneumonia.

Marine Pollution:

Oceans are the largest ecosystem on earth. Seventy five percent of sea pollution is based on land activity.

Some major types of contamination are:

(i) Oil spills which primarily effects marine mammals and reptiles like turtles that need surface to breathe and breed. Adult fishes living near shore waters and juveniles in shallow water nursery and birds who live ear shorelines are vulnerable to adverse effects of oil pollution.

(ii) Sewage adds to suspended particles in the water column. This sewage is hard to detect in open coast but in semi-enclosed areas, their effects are devastating.

(iii) Garbage has huge effect on ocean life. Litters on land find their way to the oceans being carried by the wind; as a result tons of plastic bags, cigarette buds, bottles etc. are always floating in the sea. Sea turtles often mistake plastic bags with jelly fish which blocks their digestive system and finally leads to death.

(iv) Radioactive wastes – the world’s oceans have been dumping ground for radioactive wastes since 1944. Dumping of high radioactive wastes in the ocean is no longer permitted but low level wasters are still dumped in deep sea. May be in near future its devastating effect will be seen by our coming generations.

(v) Thermal pollution only affects the communities adjacent to the discharge. Electrical generating plants along the coastlines use marine waters for cooling purposes which leads to heated water being expelled in the marine environment, tropical areas are affected by thermal discharge. For e.g. mangrove trees in a heated bay will not reproduce.

(vi) Eutrophication means release of extra nutrients into coastal waters. Fertilizers used on land are washed into the ocean through rivers: streams etc. Which may lead to the birth of phytoplankton blooms as red tides, yellow or green foams, a higher frequency unhealthy eco system. Toxicity of the recent blooms are increasing which has direct effect on the organisms that feed upon them.

DEFORESTATION :

means permanent destruction of indigenous forests and woodlands. Forests are home for many important species, they also play a major role in ecosystem. Forests produce huge amount of oxygen ,tend to help replenish nutrients in land and prevent desertification. Forest are also a main source of timber. If people exhaust their supply of forests, they will no longer be able to continue using them as the source of building materials, heating fuels and paper (Bragaw, 1999)

Desertification:

“Land degradation means reduction or loss, in arid, semi-arid and dry sub-humid areas, of the biological or economic productivity and complexity of rainfed cropland, irrigated cropland, pasture, range, forests and woodlands resulting from land uses or from a process or combination of processes include soil erosion caused by wind or water, deterioration of the physical, chemical and biological or economic properties of soil degradation is defined as human – induced phenomenon, which lower the current or future capacity of the soil to support human life . In drylands, soils are especially vulnerable to degradation due to the slowness of their recovery from a disturbance (“Desertification”, 2001)

Hazardous Wastes:

The generation of hazardous wastes is one of the major consequences of development. As defined by the High powered Committee Report, hazardous wastes refer to “ any substance, whether solid , liquid or gaseous form, which has no foreseeable use and which by reasons of any physical, chemical, reactive, toxic, flammable , explosive, corrosive, radioactive or infectious characteristics causes danger or id likely to cause danger to health or environment, whether alone or when in contact with other wastes or environment, and should be considered as such when generated, handles, stored transported, treated and disposed of.” Hazardous wastes are generally a by-product of the industrial operations which involve the use of heavy metals such as arsenic, cadmium, lead, mercury and processes which utilize different categories of oil and petrochemicals. The main difficulty is recycling of hazardous waste is itself very hazardous and is more toxic in concentration that the material recycled.

Climate change:

“ If temperature rise by almost 6 c over the next 100 years, then the rising sea levels, shifting weather events could cause massive traumas both for human populations and for nature” says intergovernmental panel on climate change (IPCC). A blanket of water vapour and other green house gases ( Carbon dioxide, methane, nitrous oxide) traps some of the sun’s radiation from going back causing warming of the atmosphere. The main cause of this global warming is carbon dioxide which is produce by burning of fossil fuels and another is methane which traps heat 30 times more than carbon dioxide. Methane emissions came from cultivation of rice , pipeline leaks, the flatulence of cattle and forest fires . It is predicted hat if global warming keeps on following the same pattern then a day will come when the glaciers and ice-caps will melt and cause the sea level to rise and tropical diseases like malaria will spread in the tropical climates.

Decline in the Bio diversity:

Biodiversity is often thought of as the variety of organisms on the earth. It also includes factors like ecological diversity ( the variety of ecosystem and ecological communities) and genetic diversity (the range of genetic difference found within and between species). All the three aspects are crucial for the success and development of life on the earth. Since environmental conditions are constantly changing, only diversity can ensure that some individuals and species will be able to adapt to the changes ( Biodiversity ,2001). All these have profound value for human beings. The value of biodiversity lies not only on direct use of the nature’s product but also the vast range of products prepared from these ranging from the food , medicines, fibres and materials. Biodiversity also guarantees a permanent source of new genetic materials for future breeding programmes. Life on the earth is currently undergoing a sixth mass extinction event. Its extent is only vaguely known, species are only recorded as extinct after their last individual has also died.

But from this we cannot draw a conclusion that development has only led to the degradation of the environment. Every coin has another side. It has been proved by many researches that development in technology has led to the saving of the environment in many ways. “ The invention of new technology is not necessarily a threat to the environment; rather it is usually the best hope of environmental improvement”(Ridley2002).

The world development report , 1992 linked the economic development with the environment. The main message of the report was the need to integrate environmental considerations into development policy making. The report argued that continued and accelerated economic and human development is sustainable and can be consistent with improving environmental conditions.

A more fruitful analysis of the relationship between economic development and environmental impact depends upon several factors as :

Specific Effects:

There are large differences in state level per capita emissions due to the enforcement of pollution laws and the use of outdates industrial technology . Low income states are still sources of emissions because of land conversion through burning and replanting of tree crops while high income states are emitting increasing emissions because of industrial and municipal wastes.

Production Structure:

Developed countries have fairly stable production structures, whereas rapidly industrializing and developing countries have unstable production structure. A change in the composition of consumption has resulted in a downturn in pollutants (Rothman,1998).

Industrial change:

Along with the economic development , societies advance with their social, legal and fiscal infrastructure that are essential to enforce environmental regulation (Bhattarai and hamming , 2001). Institutional changes triggered by citizens’ demand for cleaner environments are more likely to occur in democratic countries 9Shafik and Bandyopadhyay,1992).

Technological Progress:

Technological progress leads to greater efficiency in the use of energy and materials . Thus, a given amount of goods can be produced with successively reduced burden of natural resources and environment. One aspect of the progress can be better and more efficient reuse and recycling of materials, which (Coupled with greater efficiency in use) can yield large resource saving.

Research and development:

As income grows , people can adopt better and efficient technology that provide cleaner environment. This preferential behaviour of people should be reflected through their income elasticity. The income elasticity of public research and development funding for environment protection is positive (Komen et al., 1997).This indicates the key role of such public investments for environmental improvements in reducing environmental degradation. As income levels rise, decreasing relationship are found for some pollution indicators in developed countries. This effect of economic growth on pollution/emission differs substantially among high income countries. This also depends on the adoption of new technology.

Innovation and Adoption:

New technologies, unambiguously, improve productivity but create potential dangers to the society such as new hazardous wastes, risk and other human problems. These externalities are unknown in the early phase of diffusion of technology; in later stages regulation becomes warranted to address it . Once the technology is regulated , this may stimulate the gradual phase out of existing technology. So , a cyclical pattern arises in technologies, which first diffuse, then become regulated and finally are phased out by next generation of technologies (Smulder and Bretschger, 2000).

Technological and Organisational change:

Improved technology not only significantly increases productivity in the manufacture of old products but also the development of new products. There is a growing trend among industries to reconsider their production processes and there by take environmental consequences of production into account. This concern not only traditional technological aspects but also the organization of production as well a the design of products. Technological changes associated with the production process that may also result in change in the input mix of materials and furls (landmark,2002). The economy-wide reforms often contribute simultaneously to the economic, social and environmental gains ( Anderson and Cavandish, 2001; pasche,2002). Developing countries could learn from the experience of industrialized nations, and restructure growth and development (Munasinghe, 1999)-thereby avoiding going through the same stages of growth that involve relatively high (and even irreversible) levels of environmental harm.


Conclusion:

We find that although there is inverse relationship between development and environment the developing (low and middle income ) countries of today have a unique opportunity to learn from the past history and thereby avoid some mistakes from earlier growth experiences. With increased awareness of environmental hazards and the development of new technologies in recent years that are cleaner than ever before , we might hope to see the developing countries turn their attention to preservation of the environment at earlier stages of development than has previously been the case.

Source: KURUKSHETRA

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