Sunday, September 6, 2009

What on Earth is it with Growth and Economics?

Many people (hopefully!) are aware of climate change. Some of them know about the Kyoto Protocol (and its failure) and even fewer about the ongoing negotiations leading up to the COP15 summit (a situation that is thankfully changing, with people committed to the environment making their voices heard). But nobody can plead ignorance to global recession, “India Shining” (supposedly) and the GDP….which brings me to the crux of the matter: economic growth and the GDP. The nations of the world are locking horns against each other. The developed nations (read USA, etc) who have made such great economic progress, quite a bit at the expense of the climate, refuse to make substantial cuts in their emissions and provide a suitable amount of assistance to the developing nations (read India and China), who are in the process of making more than substantial growth at the cost of Earth (which as we all know is buckling under this gargantuan pressure).

I confess that I’m not an economist. What I am is not a little curious about why GDP is the yardstick of growth. Why does growth have to be defined in the terms of currency? If growth and the climate (as we knew it a while back) could coexist peacefully, the nations of the world would not be at loggerheads with each other. So why can’t we have one, not at the cost of the other? Why can’t we change our mindsets and think instead of a “Green economy”. I don’t mean isolated pockets of environment friendly industries (hmm, environment friendly and industries…they don’t gel well together, do they?). What I mean is a change in our paradigm of growth. As Stephen Harding (2008) put it, “We will seriously destabilize the Earth by continuing to increase the flow of her wild molecules through our economic machine”.

Stephen Harding puts forth the concept of suicidal growth (the one we are pursuing at the moment) and intelligent growth. In his own words, suicidal growth “involves the conversion of Nature’s highly ordered surface with its rich, deeply convoluted geological domain and its teeming biosphere into the appalling disorder of a destabilized atmosphere and the piles of rusting, discarded industrial products that are accumulating on our landfill sites and waste dumps”. Where as intelligent growth recognizes that “as climate change and peak oil begin to bite, we need to rapidly grow ecologically knowledgeable industries such as ones that generate renewable energy; we need to exploit geothermal power”. It also involves the growth and recovery of soil and the restoration of free nature, which provides climate stabilization, soil retention and the recycling of nutrients. I’ve provided a link to his article at the end.

Arun Shourie couldn’t have put it better when he said “obsession with growth rates obscures what is growing at these rates. India produces more and more automobiles today; and that is growth. As a result, traffic moves slower and slower in its cities, burning up more and more petrol; that is even higher growth. Pedestrians and passengers inhale the fumes; they contract respiratory ailments; as a consequence, they spend more on doctors and medicines — thereby they contribute doubly to growth. If, as a result of illnesses and expenses, their marriages come under strain and fall apart, they make another contribution to growth by the amounts they spend on lawyers and courts... Assume for a moment that the persons in question are industrialists and, driven out of their minds by these traumas, they wind up their establishments in Delhi and set up industries in the NorthEast. They cut down all the trees, and start shipping the processed timber back to Delhi — that is growth thrice over: the destruction of wealth, the forests, does not count; the value they collect for the timber, including the amounts expended on transporting it all that distance, is what counts, and the value of buildings which the timber would have facilitated.

"Is this the “growth” that India will be celebrating twenty years from now?


Stephen Harding (2008) Intelligent growth; Resurgence; No. 247

By Nistara Randhawa

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