 In the last session we tried to understand the linkages between economic activities and the environment. Today I thought as I mentioned end of the last session to you that we will try to examine the relationship between the process of economic development and the environment. As you all know that why is it important to look at the process of development because different countries are in different stages of development at various points in time. If you look at it during the first world war or second world war or in the 1970s or today. Stages of development at which different countries are in very different. So therefore we have number of classification. We say we classify some as OECD countries that is the Organization of Economic Cooperation Development which is sort of synonym for developed countries or we call them group G7 or G8 the developed countries or advanced countries, capitalist economies. Several of these synonymous phrases we keep using they are not really synonymous but several of these phrases we use to turn them. And on the other end of the spectrum we have low income economies or poor developing economies, emerging economies then the concept of BRICS etcetera come that is BRICS stands for the first acronym basically the first letters of five countries Brazil, Russia, India, China and South Africa. Because why are these called as big group because this is the group of countries which seems to be comparable in terms of levels of development and they are on similar path in terms of rate of progress of economy. They want to make the distinction because they are also countries in sub-sahar and Africa who are really struggling. So I always tell the students in the classroom that we can feel complacent about what you have achieved but it all depends on with whom you compare or you feel you know really bad that no you are not able to achieve what others have achieved etcetera it all depends on with whom you compare yourself with. So if you are going to compare yourself the progress of your economy with respect to the economies of say Somalia or Ethiopia you may feel complacent but if you are going to be comparing with China for instance among the developing countries I am talking about China or you know Brazil you may not feel very comfortable see that then the law of this debate about why India is lagging behind China are we doing good in terms of environment or development all this question do really proper. So what I wanted to say here is so there are different countries in the world which are in different stages of development and this is about to happen historically it has been happening and also is about to happen over a period of time. So there will be a degree of difference in terms of levels of development levels of living levels of per capita income in all this country. In a typical development economics lecture I will try to look at why are the countries at different stages of development and you know what can we do to sort of bridge the gap between them etcetera but this is going to be a discussion on environmental studies. So if you start this you know start this introduction to the students they will also get motivated they will say why I am studying environment not because Supreme Court makes me study it because also because out of my interest and what is the interest here is see basically different stages of development so there are these differences between economies or between countries in levels of development is you know could largely be because of different approaches that they have adopted to achieve economic development. So approaches in other words I mean pathways the road map for development is drawn by each of this country sometime in concentration with each other sometimes together through international forums very often independently because this has to take into account the local constraints local resource conditions local market conditions and the like. So therefore there are different approaches to development sometime we try to emulate others we try to copy we try to follow what others have done and see whether that can be suitable for us very often several of the countries look upon India also for instance in the month of March I attended a conclay in Bhuvaneshwar where this was a sort of countries in the Indian Ocean well I myself did not realize before attending that meet and I was invited to give a talk there when the so many countries in Indian Ocean which all got represented there looking forward to India's leadership in terms of furthering their own economy therefore there are you know lessons that we can learn and there also the modification that we can make in our approaches to development so given all this our discussion in the fore known first session today is going to be on seeing how are different approaches to development do they have first of all do they have differential impact on the environment or do they all are equally good or equally bad and if they are then can we correct our approach to development so let me begin this discussion here on you know talking about that's why I titled this approaches development and its impact on the environment so the basic question that we're going to ask here only one question are there any systematic association between approaches to development and the environmental conditions now the question is you can ask me why are you asking this question there are reasons why I expect that they might be I'm saying they're not they will be they might be in view of the fact that approaches to development influences number of variables number of factors which in turn can influence environmental conditions that is why you know it makes us it may not have a direct impact it may have an impact via media through these variables what are they how exactly this takes place etc before I come to what exactly the approaches development are we'll talk about it but you know differential approach or any approach to development affect by enlarge the following factors I'm just giving an example of some it's it's not completely exhaustive firstly it tries to alter the structure of domestic production what do you mean the structure of domestic production that is you say whether the economy is by enlarge characterized by primary sector secondary or tertiary in the traditional sense now we call it agriculture industry or services and within the industry we talk about whether manufacturing or non-manufacturing what is the structure of domestic it does alter the structure of domestic production we gave Philip to IT sector IT sector is one of the fastest growing sectors in the economy for more than a decade now it was in the 1980s we gave Philip to micro electronic based industries biotechnology based industries so they were leaders but if you look at historically from 1950s till now although we did not give much of emphasize the fastest growing sector has been the services sector so approaches to development all it tends to affect the structure of domestic production so which in turn is likely to affect the environment we will see that in a while so firstly understand how they approach your development what all it does it affect secondly approaches development also affects the nature of the binding most binding constraints face the economy so for every economy there are constraints the hurdles why they are not able to grow fast why they are not able to achieve the levels of living or income levels of say the advanced countries so there are number of constraints that they face so approach the way we drop on the roadmap for development or approach to development is basically to remove these constraints so that we are placed on sustainable growth path in terms of consistently we will be able to grow at a high rate so it also affects the it also is expected to change the remove or alter the most binding constraints facing the economy let me give you two examples if you look at India in 1950s the foremost constraint that people talk about at the time was absence of technology or technical know-how and also absence of capital both physical capital goods as well as financial capital well financial capital can be brought from elsewhere what about physical capital goods as well as the technology so the planners were thinking whether we should depend on imports for them so then the question is should we just import once and then sort of remix in India I mean the adopted in India so that we become you know we can be innovative on that Allah Japan what they did important adapt technology or what exactly are the ways through which you can do can we just encourage domestic R&D effort now all this are number of things steps through which you can do thirdly I mean you also we have to see how do we encourage people to save so that we have enough investable resources for the economy and finally most important infrastructure infrastructure cannot be made elsewhere and imported here you have to make it here all the infrastructure facilities have to be made here locally you can bring gas and you know others through pipeline but you can bring infrastructure roads and dams from elsewhere you have to make them here so therefore the nature of the most binding depending on how much government is ready to invest in all this it changes the constraints thirdly the technological in investment choices so in in macroeconomics we have a concept of what is called crowding in or crowding out effect effort now when the government invests in certain sectors we expect the private sector also to invest in those sectors that means crowding in effect wherever the government inverse the private sector also goes and you know so that it augments to the growth of that sector sometimes when government inverse private sector we say government is already investing so much money so I may not have a role to play before I stay away from that's called crowding out effect the idea here is the technological investment choices of the economy is by and large you know governed or triggered by government intervention government policies so what kind of technological and let me give again an example Amitya Sen wrote this book called choice of techniques where he talked about should we use labor intensive method all method of production or should we encourage capital intensive method of production in a country with law abundant supply of labor what Arthur Lewis called it and economic development with unlimited supplies of labor one can always use labor intensive technology should we really embark upon capital intensive technology so choice of technology is very important again choice of investment are we going to invest more in making bread or invest in factories are going to turn out more textiles or guns so therefore technological investment choices are extremely important in terms of approaches development also fourthly in order for the development to take place we create number of institutions in social structures in the 1950s in India we created we had industrial licensing act in 1969 we came with the MRTP act which is monopolies restrictive trade practices act in 1973 we came up with Farah foreign exchange regulation act all of them have been modified now after 1991 the kind of institution that were built at the time now the role of institution is to sort of regulate and not monitor earlier the situation was to monitor dictate terms industry what to do what not to do etc what is allowed what is not allowed etc now the role of SEBI or insurance regulatory authority or telephone regulatory authority they're all regulation they will give freedom to the enterprises to do what they want but they will only be a watchdog they will look at what exactly they're doing if need be they will interfere because they cannot become anti-competitive and several of this factors so in social structures also keep changing with different approaches to develop fifthly approaches development also affects the income distribution that is very important not everybody thinks that economies will simply follow what Simon Kuznet said based on a study of hundred years data of the US economy he says that income disparity will widen as economy progresses in the initial phase but beyond certain threshold the inequality in income between people will start declining for a variety of reasons now environmental economies have now started establishing whether same you know inverted uter U shape curve was too far in terms of relation between economic development and environment also so income distribution economic approaches development also affect income distribution whether it's going to increase the disparity between halves and amnots or is going to reduce the disparity between rich and poor that's something also we need to keep in mind and finally in this sort of points that I made it is not exhaustive as I said some examples only it will also affect the domestic relative to international prices let me give an example of people you know especially those who drink coffee I can't survive without drinking a cup of coffee in the morning that's why I thought I'll give that example domestic relative to international price when the coffee market in India was highly regulated domestic no export ex coffee growers are not allowed to export mostly confined to domestic sales only so demand supply is there is a mismatch we will import coffee prices there under check now when our industry is garment manufacturers textile manufacturers are allowed to earn foreign exchange software developers are also in for me coffee growers asked why you don't you allow us also in foreign exchange so government says yes we have to allow them so when they then they were allowed to freely export when they started exporting obviously they were getting better price than what the price they were getting in the domestic market as a result the prices of coffee sold in India went up so the gap between domestic and international price that existed before we opened up coffee allowed coffee to be exported and today the gap today are very different gap has narrowed there is a huge gap between international domestic price before regulated price here for the domestic market etc now they are sort of getting closer so it will also affect the domestic relative to international I am not here to say whether it is good or bad so we are basically saying these are the factor that can all change with differential approach to development okay having said this now before we will try to see what impact it can have on the on the environment in a while so these variables that we just talked about in the previous slide in terms of income inequality in terms of international prices investment choice technology choice etc all these variables affect two important factors among many others so I am only going to talk about these two today one is the energy consumption which is relevant from the environment point of view and secondly the pattern of land use in the agriculture system so these two when they are affected how exactly they are affecting we will come to it in a while that we need to establish how they are affecting these two they will also affect several others so these two know when they are affected in turn affect the extent of environmental degradation because these are crucial factor land land use pattern and use you know in agriculture and the energy consumption part these two are crucial factors that will have a big say on the environmental degradation whether environmental degradation will take faster slower solar or later etc all this will depend on this that is why it is important to understand the developer strategy so if you are able to therefore identify which approach is going to be environmentally more benign than the others then accordingly you can make your choice so that is why as I said right at the beginning late starters and development can look at it as sort of an advantage rather than occurs so because developed countries may not be able to reverse some of the adverse effect that they already have faced but now they are definitely changed it etc okay before I get into environment so environmental damage by and large in developing country which is of information to you but before I do that I also want to tell you one other important aspect I guess most of you would be reading newspapers in the last 15 years from year 2000 onwards you have seen you know multinational companies emerging out of developing countries before that we only know multinational companies coming from developed countries to developing countries earlier they used to export from their location to developing countries seeking for more and more market so that they can expand but then they thought best is why don't we go on use the resources available there produce it there and sell it there itself so among all this you know countries that invited multinational why did they invite multinational now we are also saying invite multinational invite multinational because they are going to bring in the investment why do you need more investment then only economy can grow at faster rate now we need investment also because in macroeconomics we have what is called the savings investment constraint that is if you want economy to grow at say 5% 8% you have to your planners will tell you what is the proportion of GDP that you need to invest depending upon the capital output ratio so if you assume capital output ratio to be 4 is to 1 simple macroeconomic identity that we assumed Indian planners assumed in 1950s and 60s so if you want 5% growth rate of your GDP you need to invest 20% of your GDP 5% per annum growth rate of your GDP you need to invest 20% of your GDP now the question is do you have so much of savings in the economy because savings is equal to investment you can only invest what you the economy saved and if the savings are less than the investment targets then you need to bring money from capital from abroad so the investment targets in number of these countries are 35 to 40% and in fact if you look at Japan South Korea etc in their growth phase that is between 19 late 1960s and 1980s they all have invested 40% of the GDP and the economic savings rate also reached about 40% over a period of time so but until you reach that savings rate you need to bring capital from abroad so when you bring capital from abroad there are things attached to that definitely there are conditional there are no free lunches nobody comes here to do charity they come here to do business they want to make money now when they come here to make you know the inverse to produce give employment opportunities to people make money all fine so we are not going to debate about multinationals are good bad that's a different debate altogether so but developing countries economies the enterprises have also started investing in other countries you would have heard about Tata acquiring chorus several Infosys acquiring number of software developing countries software companies and other countries several of these investments have been taking place you know Indian company is going and investing overseas even small and medium enterprises from Ludhiana, Tirupur etc has started setting up plans elsewhere of whatever they say because of you know better policy environment there than here because they said policy paralysis and several of these factors we are not getting into that also Chinese so did the Chinese companies but you know in the I wrote in 2000 I was trying to compare between Indian enterprises and Chinese enterprises which have gone overseas and we found in the case of China that much of the overseas investments have been in oil exploring companies in Sub-Saharan Africa crude oil with the start to bring in back to China all that is fine so they said it is like the old colonial model where you invest in resource sector bring the resource for your development but in the process of using starting using the crude oil now you have seen recently the outdoor air pollution in China has gone several times now people are saying is because the poor quality of oil that they are getting from this African countries they only went and invested explore the oil and then bringing it back to their country and then they say is quality and then they are it was huge amount in order to clean the oil to be made use say for example reduce the sulfur content in here and several of this factor so your outward investment bringing in resources for your development imagine getting oil at cheap price because your own company but it has adverse environmental consequences where it is used where your own country so one has to be careful about all these aspects as well so that is one example I thought I will tell you since we might have read about this in the you know they are repeating is it the right wise decision to have invested in oil exploration in those countries what do we do or should we explore and then sell it to other countries as then bring it back to China so that is an example I thought you should keep in mind again outward investment opening up of the economy allowing your companies to go abroad invest overseas approaches to develop can also be harmful to your country if you do it with China model especially with respect to oil experts okay now coming back when we talk about environmental damage we see a large difference possibly one is not very sure therefore it is a debatable point between developed and developing but again we are not getting into that we will only talk about it briefly in our in each of the aspect but environmental damage when you talk about in developing at least by and are restricted to four factors air and atmospheric pollution water pollution and depletion declining water table especially land degradation soil erosion recidification and also deforestation each of it will have adverse development consequence because they also threaten the fundamental basis of your development itself okay so let us look at each of these aspects now especially from a developing country point of view now the scientific and technical base of this I am not going to get into debate with you because most of the most of you are already aware of this I am going to give you an economist perspective on each of this environmental factors in developing countries especially from a development perspective now what we definitely know is the energy generation and energy utilization emit hydrocarbons nitrogen oxides sulfur dioxide ozone into the layer as I said you know all of you are familiar with this places where energy producing and energy consuming activities are concentrated where they are located the concentration of this pollutant is also very high so which means we have to deal with that particular area first and then are the area where it is consumed or used now what is unique about developing countries here in developing countries what happens is there are multiple kinds of problems the air pollution is aggravated by the use of energy inefficient technology because your productivity of the energy manufacturing sector energy generation is very low so energy inefficient technologies with inferior pollution control and by the use of cheaper high sulfur content low quality coal and fuel oil especially for heating and transport an example here is ice you know they talk about quality of Indian coal and quality of coal that is imported from other countries Australia etc. Quality of fuel oil sulfur content in diesel for example there is a always there is always argument between the petroleum ministry and the environment ministry in New Delhi especially in this there are countries like Netherlands where there is a coordination between three ministries the tackling environment ministry industry ministry and oil ministry come together to discusses here mostly what happens in India is right hand does not know what the left hand is doing so each one operate as if they are autonomous or independent so sometimes the policies can be connected I will give you some examples where I have been part of some of the discussions there and then you pointed out that they are coordinating each other instead of complimenting each other so it is an important issue in respect with respect to energy generation and production some studies have shown that of the 18 cities which are worst polluted in the world defined only three are in developed countries average daily emission of SO2 exceed the WHO safety daily mean standard in over 50% of the developing countries so even on good days Beijing, Tehran and Rio have mean daily concentrations of SO2 about two and a half times the WHO standard and these are not the developed countries and what is also happening if you look at historically while developed countries cities are improving those are developing countries are actually deteriorating especially in most urban centers what is the reason for it unplanned urbanization now we are thinking in terms of smart cities are we talking about environmentally smart cities or we are talking in terms of you know smart quote unquote in terms of the looks and other facilities etc pressure of development urban concentration nobody can understand it better than us who are living in a large urban agglomerate like Mumbai pressure of development urban concentration all issues here which is true in most of the places also in India unplanned urbanization is the most important cause of all this but is it a problem only in urban areas is it problem less in rural areas not at all when it comes to rural air pollution particulate matters like organic matter and various oxides results seasonally from burning grasslands and from the forest clearing activities for cultivation and grazing etc we are very common in sapsa region sapsa and african region and also there are very very serious issues of indoor concentration of carbon monoxide particulates and hydrocarbons in households without proper ventilation a study by a colleague I know the last about I should say 7-8 years back by Professor H. P. Patel from Centrified Environmental Science and Engineering IIT Bombay showed that improperly ventilated kitchen in rural areas and where exactly they use the firewoods rather for fire to cook the amount of pollution inhaled by the person who cooks mostly it is you know women who cook in these places is equivalent to the adverse effect of that on the health is equivalent to smoking 20 packets of cigarettes a day that is the magnitude of pollution they are inhaling because of poor ventilation. Now there are projects on smokeless chulas which are given in number 12 households in India people are talking about solar but before the smokeless chulas came so the MIT has a poverty lab and two colleagues from there are doing a lot of research and what happens to people when we give especially from the poverty point of view they are trying to look at it especially they have chosen the most poor people poor households in Orissa and the project is called smokeless chulas they distributed smokeless chulas and trying to see the impact of it in T plus 1, T plus 2, 3 plus 3 years etc using experimental economics approach and found substantial improvement in the quality in fact the health countries are much better now than what it used to be before smokeless chulas. So the rural air pollution situation not outside but inside the house inside especially kitchen and other areas it is also cause for concern in number of countries including in India I just made an attempt to give you some data of the pattern of use of commercial energy. If you look at developed countries and emerging economies, emerging economy means the fastest going which includes I put Brazil is an exception that is why I put that there which is sort of closing to this 40 percent of the commercial energy used for industry 30 for commercial and residential use that is service sector and others and 20 for the transportation sector. Now see the last row in poorest developing countries 75 percent of the commercial energy used for transportation so which is not going to add so much to development in terms of GDP but adding more to pollution. What kind of industry that grow they were given Philip an importance in these economies. So we know that most politic industry is already listed by several studies including by Government of India. Petalizer, cement, paper and pulp, chemical, metal industries, petroleum reeling are heavy energy uses and in these industries energy accounts for about half of the totally intermediate cost. Now it is uneven use of energy across sector which makes the main link between development strategy there. So if you are emphasizing more and more on these industries for your development to be leaders of your development to lead it from the front obviously we will have the heavy energy uses adverse energy impact environmental impact. If you are emphasizing on other industries which are less energy intensive you could have a favorable environmental impact. So therefore that is the kind of link that you can possibly have but how can everybody follow the same strategy that is a big question. Now let us move on to water two kinds of issues one is pollution other one is depletion. Two major water related problems are there contamination and depletion and surface and ground water are being contaminated by agriculture, industrial, urban, human waste. Safe drinking water and sanitation are a major urban environmental problem not that they are not a problem rural area there are problem rural areas also because it is worse in rural between 25 and 75 percent of rural population because it varies from different countries in different developing countries do not have access to safe drinking water because sanitation that is why now we are talking in terms of building toilets in all the households in rural areas after 60 years of planned development and the results are chronic diseases microbe infection aggravated malnutrition increased infant mortality shortened life expectancy etc. What happens in developing countries is nearly 73 percent of the water is used for irrigated agriculture 21 percent per industry in only 6 percent of the domestic and developing countries account for 75 percent of the world's irrigated land area required about twice as much water per acre as do the developed countries and irrigation is increasing most rapidly in this country in order to intensify the agriculture cultivation except on top of it there is a problem of land degradation soil erosion and desertification. Cultivable land is the basis of livelihood of 80 percent of population in India we have more than 60 percent still dependent on agriculture for the survivor livelihood extremely rapid population growth leads to unsound agriculture practices whose results are land degradation land erosion desertification etc. which all need to be tackled because more and more demand so you have to bring in more and more land under cultivation what is the magnitude of the problem soil erosion through the loss of top soil that is either washed away or blown off the land effects over one third of the world's total rain fed plants estimates of extent of desertification the extreme end of the gradual process of loss of soil fertility and soil erosion very very substantially and according to United Nations environmental program two fifth of Africa's non-desert areas one third of Asia's and one fifth of Latin America's are the risk of desertification therefore one need to be worried about this aspect why am I talking about all this isn't this already in public domain where is the development economy is coming to be it is coming into being because who is affected it is the world's poor who are most seriously affected why because they depend on the most marginal lands for the livelihood so if you say this is a trade off if you say look you should not cultivate these lands because they are not environmentally good it is not environmentally good to cultivate them then their livelihood will go for a toss population pressure agriculture practice poverty price policies and economic institutions interact to produce the devastating effect in mutually reinforcing cycles so there is a trade off that we need to have development and then take care of the poor or the development should only cater to the certain income groups so in most of this case if we see how exactly the poor affect us this is exactly how poor are affected the most then you will ask me how do you know it is poor affected most let me give you a typology increase in population density poverty already existing poverty existence lack of in alternative income earning opportunities and land degradation leads to reducing fallow time below the time required for natural restoration of soil nutrients this interacts with the use of biomass for fuel to reduce soil fertility and attempts to respond to reduce yield by clearing more marginal lands for cultivation that are highly erodible leads to further land erosion and greater loss of land productivity that is exactly how it affects and clearing of land coupled with shorter fallow periods also results in deforestation and deforestation increases water and off and leads to situations flooding in downstream areas therefore widening the gap widening and reinforcing cycle of environmental degradation and poverty only people are affected poor people are affected now it exacerbates its effect on poverty whether even there is provincial rainfall of flooding or extreme drought before are the most affected people so you need to have there are policy measures to take another not saying the others are not affected but they are the hit the most so typically what happens here is lost of productivity of land and soil erosion leads to further impoverishment and set in motion technological and institutional changes which reinforce the other negative trends of agro ecology and now with commercialization of agriculture monoculture replaces traditional mix cropping pattern that were necessary for soil fertility and therefore problems of more intensive agriculture has sort of come up now now we are also doing some study on the impact of climate change on land use pattern so some of these insights are coming from there on top of it if you see land reforms in India continue to remain a paper tiger for several decades the land tenure pattern changed due to agricultural integration and commercialization one of the reasons why farmers are driven to suicide nobody wants to talk about land tenure pattern enclosure of commons and loss of free access to gathering of biomass fuels very important factor adversely affects the rural households tenure changes lead to greater rural inequality and anticipate both absolute as well as relative poverty so as doctors normally say prevention is better than cure how do we prevent being late starters we can think of doing something about all this so prevention requires an integrated approach to development along with poverty and the environment it is hard to design it is not easier said than done start to design and more expensive no doubt than the simple integrated rural development program perhaps that is the reason why many countries have not yet embarked on this path but it is high time they think about how to do it one such way in which we have tried to given a recommendation to the government I thought in between also try to study about what research we have done is there is a joint study that I undertook in collaboration with Indians of science Bangalore and Jadapur University in Calcutta where we tried to assess the impact of NRGA national rural employment guarantee program we took a particular district in Karnataka called Chitradug and then Ramon and sort of explained how we already published paper in economic and political weekly we demonstrated how using NRGA schemes in the rural areas we can build ecosystem services because by definition by the of the act passed by parliament NRGA is not supposed to create any physical assets like buildings etcetera so it can have a sort of check dam but without the concrete walls so you can have other rural works program and you have to use unskilled labor only some of the conditions so with using this we said how you can build ecosystem services in rural areas you can improve the biodiversity in that area reserve or improve which in turn can help you address the problem of climate change environmental hazards now we were invited when we prepare this report we are invited to make a presentation to the government we set all this possible so the idea is being considered now for implementation let us hope what exactly it can be done because it doesn't contradict the provisions in the act and at the same time your employment generation will go on and what you're going to develop is ecosystem services which will sort of help the local maintain the ecological balance so this is an attempt like prevention is better than cure it may also address some of the deforestation issues because deforestation in the sense of an unsustainable tree clearing interacts with land degradation in a mutually reinforced and two-thirds of LDC less developing countries tropical forests are Brazil Indonesia and Zaire number of reasons for deforestation evolution of agricultural systems development of particular sectors like livestock logging hydroelectric projects industrial fuel wood consumption increase in accessibility and human and natural calamities like war forest fires and the like all cause deforestation what happens with deforestation is soil erosion flooding and acidification again I'm not getting into the details of it since we're already aware of the scientific and technical you know input into this but again I'm coming back to the point from my development economics point of view the poorer are the hardest is because they live on the most marginal soils in the area that are most prone to runoff and flooding and prefer to rely on gathered wood for cooking in one of the studies in the eastern coast of India especially you know in the district of Kendrapara in Orissa we are shown to the government how the problem of energy poverty exacerbate other poverty among the poor households BPL population when there's a climate related or climate induced extreme human like flood is a new concept called energy poverty which is coming to being that because whole world is talking about energy conservation but here we are talking about not having have had access to energy and now they're also this term called energy poverty those who don't have any minimum consumption of energy standard on a per day basis love adverse global effects of this loss of topical products leads to global effects like species extinction emission of greenhouse gases etc and loss of species entire loss of genetic material important to medicine now about one quarter of the prescription ducks in the US are based on chemicals derived from plants and tropical forests how much of our plans are being used for many skin purposes maybe all these information to you we are also exporting lot of medicinal plants and loss of species diversity is also an important to agriculture since it provides the science for engineering plans with particular trades so globally deforestation also leads to emission of greenhouse gases by releasing CO2 into the atmosphere but immediately and through subsequent burning of decomposers so how do you manage this with proper forest management forests are renewable resources and temperate forest deforestation is a reversible process also however many of the adverse immediate effect of unsustainable deforestation or may not be relatively reversible therefore we have to take care so if we could have policy intervention with the speech of this the what we're trying to say is all patterns of economic development lead to environmental damage and accelerated development leads to most rapid increase in environmental degradation that's the first question that is asked when government says you must universe more money pump in more money into the economy to put the economy on the fast growth path immediately people say what will be the effect on environment today we did not think about it 1950s and 60s but today we cannot say we are not aware and therefore what we are saying is all environmental effects are amenable to policy influence of the margin because most economic decisions are at the margin not in absolute terms we can sort of shift is not to say economic development is unimportant or there's a trade off between economic development and environment therefore don't develop nobody can say that development will have to definitely take place but keeping in mind the environmental regulation so what are the options available to you so the environmental policy or policy towards environment is expected to combat two aspects but today you cannot say everything will be dictated by the state in 1950s and 60s we tried nobody will listen to you now we are a market-based economy like several other countries there's no country in the world that you can say completely you know state control economy no one including China state does play an active role the state here refers to government plays an active role let's take the example of malaysia and singapore the government plays a very important role although they are also market driven in u.s. again government plays a very important role in japan south korea in all these countries government played a very important role but government will have to sort of understand how the market functions and influence the economic actors through the market only because in the market most of the investors will look at it from short term self-interest if they are not then they are not rational human beings they have to look at it from that point of view only because nobody is doing business for charity they may make money from business and use it for corporate social responsibility but you cannot say your business itself should be for charity nobody will invest so you have to combat between the invisible hand that is influencing the market forces the phrase given by Adam Smith invisible hand for the market forces market economy and the short term self-interest of those who benefit from the source mining policies so therefore and you have to educate them the and you know make them appreciate the need for longer run and least at least some of the poor can need to have concern for all this therefore environmental policy will have to definitely keep that in mind the long-term interest how do we do that that we can do by drawing upon your pathways to develop and approach to develop so coming back to the question therefore are they some approaches which are environmentally benign difficult to answer so therefore I rephrase the question can you say there are some development strategy which are worse than others from the environmental point of view yeah that may be easier for me to identify so let us try and see whether which are the worse or can you identify something which are so what are the pathways that are there etc but for us you need to understand the pathways themselves quickly in five minutes I will tell you what kind of development strategy that different countries are followed and here I am not talking about just India I am talking about this drawn upon development pathways used or approaches development used by several countries in the world usually we do the distinguish development approaches development or development strategies in terms of two aspects the pace of development fast slow second in terms of what are the primary engines of growth for example the American growth model or development model is also looked at close by to what is called the Fordism automobile sector it is automobile sector which was given lot of prominence right from the beginning Japan also followed it for some time and that was the engine of growth other sectors because automobiles have strong backward linkage all the components and parts will have to be manufactured by several people strong forward linkage because once the automobile is done then to ride the auto cars you have to have good infrastructure and once that is there then you can connect places and trade will help to bring about development overall automobile is what they sort of focused on and the only difference between them and other countries is they by and large you know followed upon private mode of transportation automobile mode as a private mode of transportation not in terms of public transportation like railways etc. British by and large follow the railway system public mode of transport now subsequently they build the public transport so it is possible that you identify different countries in terms of what are the primary engines of growth and of course different pace so there are interrelated instrumental dimensions the developing countries the phase but the primary in terms of these two pace and engine of you know primary engines of growth obviously every country would like to achieve development at the fastest rate and accordingly choose the primary engines of growth so there is a debate in India saying that we have chosen IT sector as an engine of growth in the last 10 years so that led to lot of you know scientific and technically skilled manpower immediately finding job so mushrooming of engineering colleges find more and more demand for it more and more employment perfect is it going to be environmentally benign we do not know what is the adverse effect of it no no it is all there is no pollution here but anything is they demand more and more energy so if you can correct the source of the method through which you generate energy it should be solved this sort of debate one gets into so again as again say is iron and steel sector which we emphasis 1950s and 60s or the micro electronic base industries in 1980s chemical base industries 1980s etc so based on the pathways adopted for development or strategy or approaches development it is possible to cluster countries classify countries and then put them in different clusters but here you must understand that there are differences among the and the among along the dimensions among countries pursuing same development strategy also we were supposed to have followed the model prepared by felman for Russia former USSR but we did not blindly follow we adopted it to suit the local conditions therefore there is a difference in the dimension among countries pursuing the same development strategy again almost all the countries are market based but the degree of state intervention varies in Malaysia and Singapore the government is very active is may not be same in Greece and other some of the European countries or African country so while it is possible to identify countries and put them in different clusters the differences in how countries cluster along these dimensions are larger among countries engage in different development strategy also in the sense that it is very difficult to say New Zealand follow this strategy this approach Singapore follow this approach and India follow this approach also because these countries remain did not remain static they approach to development also do not remain static over a period of time they modify the approach to development they change the approach to development which mean they are shifted from one cluster to another so the first point I am making it although we are making a cluster of countries putting them in different groups but the any no country remained in the cluster one cluster for too long they kept changing so therefore we are not going to talk about countries you know over a period of time because that will be a separate course in itself but we are going to talk about in which cluster when they stay they harm the environment more than another okay when you talk about you know cluster and approach to development etc there are traditionally in the textbook of development economics they normally identify three approaches one which says that you know countries have chosen industrialization as part of the already agriculture exists primary sector exists so therefore you want to industrialize modernize in contrast some others say no no no we want to first strengthen the agricultural sector that's our blood and butter by a large upon agriculture and agriculture development will make sure that we are becoming a developed country thirdly there are countries which say no no no I want to have always a balanced between agriculture industry you may wonder why service is not mentioned here because most of the traditional development economics textbooks don't talk about service sector they only talk about agriculture industry has two manufacturing sectors to producing productive sectors and then balance between them so one way of classifying them is in terms of this another ways of classifying the countries is distinguish between two one is inward orientation closed economy where you don't want to you have apprehensions about your trading relationship with other countries in the world therefore you don't want to really embark upon imports and export being influencing your development inward orientation outward orientation so inward you want to be more and more inward closed economy you don't want to be affected by you know what happens in other economies in the world whereas most countries after 1991 have by and large adopted outward orientation globalization is outward orientation where you are linking economy with the economy of the rest of the world so one can also classify countries in terms of whether you are closed economy or open economy or inward oriented outward oriented so with this introduction there are theories who try to classify economies in terms of five approaches those who say that many countries adopted import substitution so you are dependent on import today but you don't want to depend on it perennially or forever so your approach should be to start those industries who will produce commodities that are currently importing over a period of time so that you don't depend on imports anymore some others said no no no what we are doing is we want to start export from right from beginning so it's basically export let go we will not only produce for ourselves but also for the export let go this is very important see import substitution takes place mostly in large countries whereas export let go this is required in small countries because you have to reap economies of scale imagine a country like UAE or Singapore small countries they have to have export let go because if they don't export and trade with the rest of the world their economy will remain very small some others said no no what we want to have is a balanced growth of agriculture and industry fourth one are countries which are really poor in terms of resource investment technical know-how etc therefore they by and large remain as exports of staples the export of forest timber and other resources a lot of people say that lot of you know resources from India used to be exported during the British regime but fortunately we did not remain exporters of staples for a long time but some of the countries in South Africa continue to remain staples and finally there are also countries which have adopted what is called agriculture first and development of agriculture we will develop the industrialization so ADLI approach that's also they followed to quickly tell you import substitution means your domestic industries are all enjoying a a closed market protected market and you want to emphasize more and more on heavy industries so that you don't depend on imports of capital goods iron and steel and others from other countries so you do export but basically primary export which you can just to finance your import because you have to import to start with the capital goods and technology after that you want to start producing yourself what happens which each of these approach we are going to talk about the impact on environment our concern is that we are not this is not development economics so in most countries that followed import substitution who followed it several countries in the world at some stage in life especially in the initial stages of development and British government followed it for India between the two world wars India was an open economy in early 20th century but after the first world war the British wanted us to become import substitution economy and of course we adopted this after 1950 also first fire plan from second fire plan till fifth fire plan we adopted import substitution only so did Japan and South Korea but they all reverted it they they got rid of it in 1960s itself we pursued it for too long what happens now now that we know that so many countries have adopted this looking at the economic growth rate in those countries during that period is very low and buying very highly input intensive and capital intensive as a result factor productivity growth are low and your agriculture was neglected or ignored it remains subsistence and they were relying more on input intensive commercial agriculture for food production exports etc and the huge disparity income distribution and there is a large gap in productivity is all bad from the environmental point of view so most of them had difficulty in adjusting to external shocks and also suffered balance of payment constraints as a result they just couldn't care about the environment they were full of problems in in this aspect itself now we find among almost all the countries accepting Britain where for themselves have engaged in import absorption in the early stages of development but degree they vary in degree and how long they continued etc and Asia Latin America differences lead to differential environmental consequences also as against some countries followed export led growth much later in 1960s East Asia but they have more labor intensive patterns of industrialization and higher share of consumer goods manufacturing achieve higher rate of economic growth productivity growth and export growth but what happens here is they have by and large followed union model rather than bimodal part of the agricultural development now what helped them the most in all these countries early redistributive universal land reforms supplemented by small farm agricultural strategies so first they implemented land reform so that there is no unequal impact on different size class of agriculture population and the emphasis was on agricultural investment in extension and technology dissimilation etc again there are different phase of export led growth first phase manufacturing exports conserved labor intensive capital goods consumer goods clothing textile etc second states shift from labor intensive to skill intensive definitely if you look at relatively they have much less environmental consequences than import absorption because the pattern of their plant etc as we see it now there are countries which are always believed in balanced growth will mostly followed in densely populated small economies they combined the agriculture with industrialization and posting of high productivity diversified high value added agriculture Denmark and Switzerland are examples of this here agriculture did not protect they did not protect agriculture from influx of cheap grains overseas farmers shifted to specialized high value agriculture like commercial direing and achieved a high standard of living share the benefit of growth more widely that is why the per capita income levels and living standards here are much better what happens to the environmental effect of all this so better environmental effect than the export led growth because it combined environmental conservation technology with non-energy intensive manufacturing industries the industry that grew in countries in these countries are non-energy manufacturing intensive Taiwan and South Korea also embarked on this for some time because they implemented land reforms land to the tiller policy prior to major investigation but the problem here is their agriculture technology has been more input intensive rather than resource conservation which is followed by Denmark and Switzerland so therefore that is how they differed in all this fourth is the case of Staffel export it is a disaster from the environmental point of view because they are raised poorest of poor economies and most of them were colonial under the colonial control and they export wood log without proper forest conservation policy and poor exchange rate also become give them less money and adverse soil and forest conservation practices although low energy per unit of GDP so if you look at the energy conservation that is low but then there is no development and finally let us look at the area like countries agriculture development led industrialization where the first step is to increase the productivity of food agriculture focusing on medium and small farmers then the economic linkage of the income expansion provide a stimulus for expansion of mass market for domestic wage manufacturers they also formulate appropriate agriculture terms of trade so try to the same so the several countries that follow the step by step first agriculture then use the surplus of agricultural for industrialization present day developed countries like Canada, France, Germany, Britain, Japan, Sweden and the US are all followed for a long time currently very quietly Indonesia is trying to adopt this to large extent China and Hungary can also be you know area like type although I said as I said earlier nobody remains in that so the environmental impact of this is it reduces energy requirements however they have the potential for substantial damage to soils because they are emphasizing on agricultural development all the time so in the absence of specific attention to soil and forest conservation in technology is propagated to increase productivity it can also be harmful for this country so they have to be alert with respect to that so that is why the difference between some developed countries and other developed countries come back to that so therefore coming back to the question that we asked is it possible to say that there are some development strategies are environmentally better than others probably we can say yes but then we have to say definitely this is a cautious yes only but if you ask me in contrary are they some without decidedly worse or we definitely say yes especially those who have adopted imports of social for a long time because these are the rates of intercontinental linkages and you have to depend on each other and also those who are following a staple export for a long period of time that can also be really adverse environmental consequences so basically what we are trying to therefore understand here is different countries have followed different I have drawn and followed different approaches to development different pathways to development as developing countries are still drawing upon pathways to development there is opportunity for them to learn from the experience of their own economy as well as the economies of the you know neighboring or you know comparable developing countries and then modify their approach to development and see whether they can address environmental concern in the development strategy itself it took a long time in for us 12th fire plan of which I was also remember to you know draft a part of it several of the exercise after several rounds of discussion we were able to convince the government to address environmental concerns into the action development strategy itself we hope the same will be addressed by Niti Ayod as well because that is what is important from the because we cannot say we will compromise on development no way we need to develop the per capita income has to go up they should be all around development of the economy but at the same time we will see whether we can adopt certain pathways as I said earlier prevention is better than cure planning and you know implementation of what is planned these are normally behind development strategies would be very useful from our point of view also so that means there is scope for us to talk about bringing sustainability in the development part then how do we operationalize sustainable development in a development perspective that is what we are going to see in the post t session but I will now pass for some time if there are any quick questions clarification you want I am ready to take it up now thank you SKN senior how agricultural development led industrialization affects on current land development bill good question I have not really thought about land development bill I am basically looking at it from development economics and development theory plus point of view well see actually the problem with land development bill as people have pointed out is you know when there is a trade-off between agriculture industry should be emphasized more on if you speak Indian agriculture will be will not be affected for the both growth of their lands or crop patterns or etc I think most of the people who oppose land development bill have been saying that you know industrialization should not happen at the cost of agriculture okay as long as the government can ensure that agriculture the cultivable land are left for cultivation and it is only those which are non-contivable which are being you know used for other purposes etc it should be fine so but the problem comes only when there is when there is a trade-off and then you say which land you want to use it for good morning sir yeah good morning madam another question mostly in the present scenario air pollution is caused by main industries and the vehicles the industries have filters like cyclone for separators and back houses like that but why can't we use the filters in the automobiles but vehicles what type of filters is to remove air pollution well I guess there are number of steps we can take to reduce air pollution process safety has been talking about it to you about reducing air pollution but what I wanted to say is this countries that adopted automobile sector led development are now facing the brunt of it carbon emission are the worst the highest carbon emission comes from those economies which have led for automobile you know led the economic development so in that sense we are actually better off we did not really go in for that but our automobile development has been by and large because of poor public transport system so once you improve on that we should be able to take care of the air pollution here as well but air pollution is not simply because automobile alone in India unplanned industrialization as I said earlier. Hello good morning sir sir I have one question what is the environmental impact of construction of your dam well I guess I know before I talk about environmental impact I would first say what about the dislocation of people who are living in that area that's my first worry then I talk about environment that is what I am trying to address it here but unless you rehabilitate people and then take care of the livelihood requirements you can't really talk only in terms of environment because the environmental impact of constructing a dam is far of widely established in number of you know forums but you know you have to compare the benefits of the dam with respect to the costs of constructing the dam especially environmental aspect etc. So specific you know aspects are the use of that particular piece of land itself I would say in that area the area is likely to get inundated by water so how are you going to sort of take you have to relocate the people who are already living there that is going to be the most important challenge. Out of five development strategy as you have mentioned which one is good suited for India? No no see I as I said that I am not saying these are the only five I am only saying took an example of this five we have also followed you know in some sense each one of it at different points in time so I will say staple export before independence import substitution immediately after independence then we are trying to get into agriculture development late industrialization but very very briefly because we thought we when green revolution was adopted we will try to do that then immediately industrial champion said no no no don't get into that so we never followed the model of Denmark and Switzerland that's the only thing that we did not do and so he whatever we followed in nuts and bits of it as than in in total so I wouldn't say you know and I also I am not here to say that you know you have choose one among these five these are all examples to evaluate whether there is a differential impact that's all so the prescription will come in the second part of the lecture where I talk about sustainable development. Good morning sir. Environmental cost benefit analysis everywhere practiced in India. Yeah it is essential that we that we have whether we carry out environmental cost benefit analysis in India for every project it is mandatory now is very very very required that's exactly what we are going to say how we look at it. So you know some of these questions you may be able to get a clarity after I make the next presentation which where I am say what is the roadmap okay in terms of achieving sustainable development then we will maybe spend more time you know on the discussion. So we will break for tea now and come back at 11.