Yogi Aggarwal Business Times 13 Jan 11;
MANAGING the often-conflicting demands of fast economic growth and safeguarding the environment is hard. It involves tough choices between protecting forests and rivers on the one hand and industrialists and miners on the other; large investments that generate employment and yet may displace local populations and lead to loss of existing livelihoods.
In an economy such as that of India, which is hoping to achieve a consistent growth of over 9 per cent, these choices boil down to policy and investment decisions that often involve enforcing existing laws, or ensuring that profitable opportunities aren't missed.
The clearest statement of the environmental point of view is in a United Nations document that says: 'Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.'
The difficulty lies in putting economic numbers onto a concept like this one. The World Bank has a metric that measures the rate of savings in an economy after taking into account investments in human capital, depletion of natural resources and damage caused by pollution.
In India's case, according to the World Bank data, the gross national saving as a per cent of gross domestic product (GDP) was around 34.3 in 2008, but because of depletion in natural resources and pollution-related damage, the loss was 10 per cent and 'adjusted net saving' was just 24.2 per cent.
Partha Dasgupta, a professor at Cambridge University who is a leading authority in this field, has calculated that against the estimated growth rate of India's per capita GDP of 2.96 per cent during 1970-2001, the growth rate after taking into account environmental costs works out to 0.31 per cent per year.
The costs are even higher when mining for minerals or coal is involved. Much of the mineral resources are found in states such as Jharkhand, Orissa and Chhatisgarh. These states account for 70 per cent of India's coal reserves, nearly 80 per cent of high-grade iron ore and 60 per cent of bauxite.
They are also heavily forested and many of them are also inhabited by tribal people (aborigines) - the original inhabitants of the sub-continent. As a result, large parts of the mineral-bearing areas are being deforested, and because of displacement and poor rehabilitation policies these places face a Maoist insurgency.
Deforestation and the rebellion of displaced aborigines is a major reason that the several stalled projects are on forest land. A six-million-tonne-per-annum steel plant by Tata Steel and a 12-million-tonne-per-annum steel plant by South Korea's Posco in Orissa have been blocked. Both of these could be cancelled.
The Environment Ministry has also scrapped plans by the Vedanta group for bauxite mines and for expansion of an alumina refinery in Orissa from one million to six million tonnes per annum.
Jairam Ramesh, the MIT-trained engineer who is the minister of environment and forests, said recently: 'Is the debate really environment versus development or is it one of adhering to rules, regulations and laws versus taking the rules, regulations and laws for granted? I think the latter is a more accurate representation and a better way to formulate the choice.'
Until Mr Ramesh took over the ministry in 2009, getting environmental clearance was considered as part of the 'licence raj', the system of greasing palms to get the requisite permits. Now many projects find the environmental laws cannot be bypassed.
Until the late 1960s, little thought was given to the environment. Since then ecological concerns have been given form in pieces of legislation such as the Water Pollution Control Act passed in 1974, the Forest Conservation Act of 1980, the Environment Protection Act of 1986 and, most recently, the Forest Rights Act of 2006.
Though the assessment of environmental impact currently done is often of poor quality and needs to be made more professional, a beginning has been made.
There have been cases when environmental clearance has been given on conditions being fulfilled. This happened to the provisional approval for a second airport for Mumbai and for a 10,000 MW nuclear power station on the Konkan coast, south of Mumbai.
Other projects previously passed, for instance a new hill station near Pune, have been temporarily stalled.
Mr Ramesh often maintains that 95 per cent of all projects sent for approval to his ministry are cleared. The ones that are not often involve mining. A differentiated approach needs to be taken for mining activities between essential and non-essential needs.
If India is to grow at 9 per cent, its electricity consumption should go up by 6.5-7 per cent annually. And since 70 per cent of the electric supply is from coal-fired plants, the Ministry of Coal believes that local production of coal should be doubled in 10 years to one billion tonnes per annum, to generate another 90 gigawatts of electricity.
The Environment Ministry's maps show that many of the new mines lie in 'no-go' zones for mining. This is disputed by the coal ministry. Since increase in power generation is vital for increase in GDP growth and for the country's prosperity, some kind of compromise on regulations for the mining of coal may be necessary.
But the iron-ore mines and the huge bauxite deposits are a different matter. Much of the iron ore is exported, mainly to China. It partly balances the vastly unequal trade. However, many of the mines are illegal.
The iron-ore mines, particularly in Goa and Karnataka, are not even following basic procedures of trying to restore the land after extracting the ore.
Considering that this is a scarce mineral resource, strict environmental norms should be imposed, even if exports fall. A similar case could be made for the mining of bauxite, especially since there is strong opposition to the mining in the Niyamgiri hills in Orissa, considered sacred by the aborigines. Mining, more than any other industry, creates the strongest opposition, and stringent laws need to be imposed to stop reckless exploitation.
