If bureaucrats could accept poverty-alleviation as a mainstream agenda to make a powerful diminution of rural poverty, accounting for the GDP of the poor can be the way forward
It has taken the world a while to reach the understanding that nature can never be taken for granted. Unfortunately, in India, this is not the case and utilisation of common natural resources like forests, green cover, oceans, rivers, fish stocks and so on, doesn’t reflect anywhere in our Gross Domestic Product (GDP) accounting, as these are difficult to chronicle. This economic inconspicuousness of nature’s services becomes an underlying concern, which has generated debate and discussions like The Economics of Ecosystems and Biodiversity (TEEB) initiated by the United Nations in 2007. TEEB is a global initiative focussed on “making nature’s value visible”. Its main objective is to mainstream the value of biodiversity and ecosystem services into decision-making at all levels. It aims to achieve this goal by following a structured approach to valuation that helps decision-makers recognise the wide range of benefits provided by ecosystems and biodiversity, demonstrate their values in economic terms and where appropriate, capture them in decision-making.
Although conservationists like Pavan Sukhdev and Gretchen C Daily — pioneers in illuminating and quantifying the economic value of our natural environment — who are awarded with the Tyler Prize for Environmental Achievement in 2020, have clearly put forward the same opinion, acceptance remains elusive. The economic invisibility of nature to drive humanity and dependence upon market-based economic systems, remain at the heart of deserved recognition to account for nature in the GDP, especially in relation to the survival of marginalised sections of society. This invincibility somehow hampers the cognition to acknowledge the GDP of the poor via negative externalities. Often, in the process, the secondary sector (industrial) omits to make the required dent due to an invisible characteristic attached to the transformation, from sourcing of raw material to processing of finished produce.
Think-tanks and economists realised the requirement for true demonstration of environmental economics or “greenomics” for its invisible values much earlier and American biologist and philosopher Garrett Hardin’s The tragedy of the commons is an exemplar to this. For the uninitiated, the tragedy of the commons is a situation in a shared-resource system where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling the shared resource through their collective action. It is quite worrisome that big business houses and people at large are not able to value the gratuitous support provided by nature due to imprudence and the incompetence to distinguish private goods from public goods.
Greenomics is all about economic factoring of public and non-marketed (those not made by man and not transacted in the market) goods in computation of the national domestic product of an economy. It is definitely essential (and poses a challenge in a way) to evaluate the intrinsic economic value, as most of the business minds have tried to comprehend today. One such endeavour comes through the Global Initiative for a Sustainable Tomorrow (GIST) platform to quantify the impact of negative externalities by allocating economic values to invisibles to make it a plausible option for inclusion by the bureaucrats and corporates.
The concept of GDP accounting of the poor appears to be crucial in that it has to blend sustainability along with big data that is accessible to all. The TEEB framework facilitates all of the above by merging it with data analytics, technology and sustainability.
Certainly, it is not about placing a price on nature, rather it is about recognising, demonstrating and valuing nature’s services to people. Nobody is buying or selling a cloud. The reality is that forests can generate rainfall that is vital for agricultural productivity. However, recognising and demonstrating that true scientific value is the reality now.
The idea propagated by TEEB’s Indian members, “GDP of the poor”, holds relevance especially in a fragile atmosphere of everlasting ecological uncertainties that undoubtedly will decide the future placement of the nation on the global map. Their report signals that the rural production system would suffer the most, given the destruction of our ecosystems. The question that we must ask ourselves is, that if nations like Vietnam, Indonesia and so on, can separately compute the GDP of the poor, why not India, despite three of the members on the board of the TEEB being Indian. Initiatives like zero-budget natural farming in Andhra Pradesh and Maharashtra are welcome and the need of the hour. If bureaucrats could accept poverty-alleviation as a mainstream agenda to make a powerful diminution of rural poverty, accounting for the GDP of the poor can be the way forward.
(The writer is Assistant Professor and Senior Research Scholar, DRC/FMS, University of Delhi. Inputs by Kushankur Dey, Assistant Professor, IIM Lucknow. The views expressed are personal.)
