Rebalancing ecology, economics & ethics

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Rebalancing ecology, economics & ethics

Friday, 25 February 2022 | BKP Sinha

Rebalancing ecology, economics & ethics

We need policy instruments and intervention strategies for behavioural change such as educational programmes and incentives for conservation

Our growing understanding of complex systems, including ecosystems, has challenged the prevailing economic model of a closed circular flow of production and

consumption. This model has been described as ‘natural laws’ of equilibrium of market forces.

Especially in a world of limited resources, it becomes evident that neo-classical economics fails to reflect social, economic, and environmental factors.The circular flow diagram in neoclassical economics is just an abstraction of the economy, showing that it can continue to reproduce itself indefinitely without any additional inputs. However, all of the resources (non-renewable or renewable) required to sustain this circular flow have to come from the environment. At the same time all of the waste produced by firms and households inevitably returns to the environment. The dependence of the economic system on the natural ecosystem is so complete that the human economy can rightfully be regarded as a subset of the earth’s ecosystem.

Considering today’s environmental problems, ranging from global atmospheric degradation and toxicity of the environment to loss of forests and massive species extinctions, it isimportant that we understand the relationship between ecosystem and economic systemand our obligations towards the environment.

Since Vedic times, we have been taught to live in peace and harmony with nature and to conserve it. But as civilization progressed, economics and ecology have separated and their ethical implications has almost been forgotten in the tide of unbridled capitalist greed, one-sided individualism and egocentrism.

Today’s Gross Domestic Product (GDP) obsessed growth has become a synonym for rising living standards. But in reality, some people have benefited more from growth than others and there are still a significant number of people worldwide,who lack access to basic necessities, such as food, clean water, healthcare and continue to live in hunger, illiteracy etc. The inequality has risen over the past several decades in advanced economies, but remained unnoticed. However,the looming threat of catastrophic global warminghas raised serious concerns about the connection between growth and carbon emissions. The problem with GDP is that it conflates qualitative development with quantitative growth and also misrepresenting economic growth by excluding social factors, environmental impacts and natural capital. For e.g. agricultural expansion, will be shown as net economic gain, despite the degradation of ecosystem services.

Eradicating global poverty within the constraints of the natural resources is a huge challenge in hand. The increasing population has already pushed the planet over four planetary boundaries - climate change, land conversion, fertilizer use, and biodiversity loss. A holistic approach is required which integrates social, ecological, and economic indicators in evaluatinghuman well-being, sustainability of a country’s or business’ growth, identifying losses and devising better policies and practices to minimize them.In addition, a shift in accounting system is needed to incorporate all aspects of profits and losses, not just financial gains, but also negative externalities like pollution, waste and other social and environmental impacts.

We cannot sustain growth forever, given our planetary limits which gives rise to a very important question that is highly debated. What is the limit of economic growth?

In present scenario, Herman Daley’s concept of a steady-state economy is known to be critical to sustainable development and is often discussed in connection with economic growth and its impact on ecological integrity, environmental protection, and economic sustainability. “It entails stabilized population and per capita consumption that do not exceed the carrying capacity of the ecosystem”. Given that natural resources are limited, rather than trying to achieve growth (quantitative), we should focus oninnovation and improvement (qualitative). He also suggested, that taxes should be levied on resource use rather than income.Such a shift would force

people to use resources more

wisely, encourage eco-friendly

technologies and simultaneously improve employment and ecological sustainability.

Our current economic system is putting an enormous pressure on the planet and the traditional ways of conducting businesses will soon collapse, forcing companies to come up with new solutions. By determining the path forward, companies can save time, reduce costs, increase efficiency andgaincompetitive edge, which are critical for their success and survival. By innovating and applying clean technologies, they can reduce pollution levels, deploy resources more sustainably, recycle a higher share of wastes and products or treat residual wastes in an environmentally safe manner. Besides, companies need to reinvest their earnings into restoring, preserving, and expanding the planet’s resources. Failing to do so can negatively impact their revenues. Corporations must adapt a new outlook that does not treat growth and social welfare as zero-sum game.

Indeed, it is more productive to work with nature than against it.However, we have focused only on the resources that can be exploited from the earth’s ecosystemsand not on the services provided by these ecosystems. GDP has induced unstainable practices that have contributed to climate and biodiversity crises. Over the past two decades forests have degraded significantly due to land use changes, mining, infrastructure projects, commercial logging, overgrazing, etc. Although, the country’s total forest cover has increased,but it has mainly increased in the open forest category (degraded forests) due to plantations, monoculture, etc. on private lands, while dense forests (good forest) has decreasedinside the Government-managed forests. According to India State of Forest Report 2021, 45 percent of India’s forests would be at risk of

climate change by 2030 if carbon emissions increase moderately. In a high emission scenario, that number rises to 65 percent. Additionally, the growing stock of trees in forests declined by 8 percent and the carbon stock is just 7,204 million tonnes.

Massive plantations, particularly monoculture species, deforestation in subtropical and tropical rain forests has become detrimental to biodiversity and ecosystem. Likewise, excessive use of chemical fertilizers and pesticides in agriculture are contributing to greenhouse gas emissions. Also, land degradation, particularly in rainfed land, has become a major concern for Indian agriculture, where agriculture contributes a significant amount to the country’s GDP and on which lives and livelihood of farmers and forest dwellers depend.

Forest loss and extinction of species can deprive us of valuable resourcesand services like timber, nuts, fruits, medicines andpreventionof soil erosion, floods anddroughts,  water filtration, fisheries, pollination and pollinators - functions which are especially important to the communities relying on natural resources for their everyday survival. Considering that naturally regenerated forests tend to store nearly 32 percent more carbon, forest restoration should take precedence over tree planting.

Understanding that our economy is a subset of our ecology is critical. It is therefore vital that human behaviour toward nature be modified and corrected. To achieve this, ecology and ethics need to work in tandem. Ecology gives us insight into natural ecosystems and the laws and regulations that govern them, whereas ethics enables us to establish inner bridles against overexploiting nature. It is imperative that to achieve sustainable development, the broken harmony between economy, ecology and ethics be restored. We need policy instruments and intervention strategies for behavioural change such as educational programmes, incentives for conservation, land use ministry, etc.

The Covid-19 pandemic has shown us that when governments decide to make something happen within their countries, policies can happen almost overnight. It is absolutely possible to change things, but only if we change our political values, interest and mindset.

(The writer is a former IFS officer. The views expressed are personal.)

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