Make growth environmentally sustainable

Sustainability and environmental concerns continue to make headlines in the contemporary world order, contrasting with reportage of Covid-19 resultant economic contraction. As we move towards economic recoveries and resurgences, it is essential that we take account of the linkages between the two - a domain relatively untalked about. It is critical to understand that environmental accountability and climate action can fuel our economic futures.

As per OECD, the links between the economy and the environment are manifold: the environment provides resources to the economy, and acts as a sink for emissions and waste. Natural resources are essential inputs for production in many sectors, while production and consumption also lead to pollution and other pressures on the environment. Poor environmental quality in turn affects economic growth and wellbeing by lowering the quantity and quality of resources or due to health impacts and so on.

From this standpoint, the concept of sustainability becomes all the more significant to consider. Sustainable development aims to optimize the net benefits of economic activities, while sustaining humanity's stock of productive assets - physical, human and environmental - over the years and ensuring a social safety net to meet the needs of the economically vulnerable. Simply put, it attempts to invigorate economic progress in an environmentally conscious manner while attempting to achieve intergenerational equity.

With these observations put together, it is easy to understand that sustainable development is directly correlational to several economic benefits. For instance, as Hindustan Times reports, India can gain $11 trillion in economic value over the next 50 years by limiting rising global temperatures and realising its potential to 'export decarbonisation' to the world, a new study by Deloitte Economics Institute show. The study infers that if India doesn't act now to mitigate the effects of climate change, it could lose $35 trillion in economic potential, which could be 12.7 per cent of its gross domestic product (GDP), by 2070.

Accelerated decarbonisation could bring significant benefits to India and the world. India could use the transition to a low-emission footing to restructure its economy towards growth in advanced industrial sectors, leveraging lower-cost clean energy export markets, as the region experiences a rapid increase in energy demand over the coming years. Environmental accountability is thus interminably significant because it produces real benefit and also bolsters our commitment towards the future of humanity. Yet, economies have consistently failed the environment.

As a consequence of our general indifference and inability to treasure nature, alongside greed to exploit the environment without giving it time to replenish its reservoirs have cost us a lot. Economic progress without sustainability is a myopic phenomenon and needs to be addressed.

On a policy level, several changes have to be made to ensure this, beginning with promoting quality research and study on the same. While the predominant factors connecting the economy and the environment are qualitatively known, assessments of environmental policies are often hampered by a lack of consistent quantitative metrics to compare the costs and benefits of policy changes, or by a more general lack of empirical evidence. A statement by OECD notes how the economic costs of biophysical and environmental consequences of policy inaction, and the associated benefits of new policies, are often not quantified. Therefore, economic discussions are often dominated by the very visible costs of policy action and consequently, it is essential to improve the toolkits that economists use to assess the benefits of environmental policies.

Consciousness towards this also has to be promoted. Environmental assets and the natural capital are a major component of national and global wealth. General awareness about the consequences they can cause will position citizens to pursue sustainability and demand the same from authorities. Citizens can truly integrate social, economic and environmental dimensions of our existence and give economies and nations ideal conditions for progress. Education towards this end alongside regular powerful campaigns can prove instrumental in this regard. Better legal regimes to ensure conformity to environment-friendly standards of economic activity are also necessary in the same vein. International environmental laws require restructuring to effectively manage problems pertaining to population, biodiversity, climate change, ozone depletion, air, land and water pollution, conservation of marine resources and related concerns.

Curbing ecological crises and using long routes to economic accomplishments can secure our futures while giving us ideal conditions to pursue sensible and conscious development. Sustainable development has its own worthy rewards and understanding the nexus between the environment and the economy is crucial to this mission.

(The author is Founder, Upsurge Global, and President SAHE (Society for Advancement of Human Endeavour)