The Chinese have a problem. They are ageing fast and one-child policy hasn?t helped. Such an adverse demographic shift, where a country greys before it becomes rich, has serious socio-economic consequences. Many years ago, Albert Maslow postulated a hierarchy of needs, first in a 1943 paper and then in a 1954 book. Physiological needs come first. The world of psychology may have debated and empirically tested Maslow?s postulates, however, we do know at different levels of development, priorities are different. Water-borne diseases may be important at a certain level of income, life-style diseases at another.
John Snow (1813-58) lived in 19th century England, when people knew little about infectious diseases like cholera. In 2003, a poll among British doctors voted Snow as the greatest physician of all time. Snow taught us the importance of clean drinking water and sanitation, a lesson India still hasn?t imbibed. Should India worry more about health outcomes resulting from these improvements and existence of malnutrition, or should we be concerned about high cholesterol? This is also true of environment. Simon Kuznets (Nobel Laureate in 1971) is associated with two curves. The first correlates inequality with per capita income and suggests that, as development proceeds, inequality first increases and then declines.
The second is an environmental Kuznets curve (EKC), not suggested by Kuznets himself, but named after him because it exhibits the same inverse-U pattern. This has also been empirically tested and has been found to hold for some variables connected with the environment, though not all. Environmental measures and policies are no longer part of WTO negotiations in the sense that they were originally suggested in Singapore in 1996 or Seattle in 1999. What was the Indian reaction when developed countries proposed inclusion of labour and environmental standards? These were perceived as thinly disguised attempts at protectionism. At our level of development, we aren?t ready for these. Open up your markets. Allow our exports, so that we attain higher levels of per capita income. We will then begin to attach premiums to environment and labour.
Negotiations on climate change are no different. Here is a sample, from the Joint Statement of BASIC (Brazil, South Africa, India, China) environment ministers at Cape Town on April 25, 2010. ?Ministers were of the view that it will not be possible to deal with mitigation actions by developing countries, without also dealing with support for those actions and the two-fold commitments by developed countries to both provide finance for developing countries and reduce their own emissions, with consequences of non-fulfilment.?
Fairly explicitly, a trade-off between environment and growth is stressed and without directly mentioning Kuznets, EKC is brought in, emphasising that because of concerns of equity between developed and developing countries, developed countries shouldn?t push environment too hard. Fair enough and it is a compelling argument. By the same token, environment should be less of a concern in India?s backward states (Bihar, Madhya Pradesh, Chhattisgarh, Jharkhand, Orissa), because poverty and non-development are major issues there. One cannot have one kind of logic for international negotiations and another for domestic policy. As a country, we are rich in labour resources. Therefore, as developed countries, don?t use NTBs (and other means) to restrict our exports of labour-intensive products. Most (though not all) of India?s poorer states are rich in mineral resources. However, sitting here in Delhi, we will not allow those to be exploited. We will resist environmental standards when they are perceived to be imposed by the developed world from the outside. But we have now internalised the process and we will therefore impose environmental standards on poorer states. Who should be the right entity to take a decision about the trade-off? Should it be the ministry of environment & forests (ME&F)?
Forests and protection of wild animals and birds figure in the Concurrent List and mines figure in both the Union and State lists. Quite often, protecting environment is about appropriate property rights (interpreted as decentralisation) and right prices. Indian systems are inordinately centralised, a legacy of colonial times. Ostensibly, we have a decentralised constitutional system in place. It is just that government doesn?t believe in decentralisation and planning from down upwards. Witness the way ME&F treats reserve forests. Witness the way Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act of 2006 diluted the original Bill (and recommendations of a JPC) and reduced role of the gram sabha, circumventing spirit of PESA, too. Hence, let us not mix up issues.
Yes, tribals should be consulted when exploitation of mineral resources is planned. But no, ME&F sitting in Delhi should not determine their destiny. By allowing ME&F this role, we have ensured India?s backward areas become green before they become rich. Or more accurately, they remain green without becoming rich. In a perverse way, ME&F has accomplished what we didn?t want developed countries to do.
The author is a noted economist