S.G.VOMBATKERE | 17 JUNE, 2019
Global Warming and Our Model of Economy (2)
The concluding part of an essay on the dangers of growth
You can read the first part here
Economic growth is an existential threat. Continuous economic growth year upon year is growth compounded, and the size of an economy growing at say 7% will double in ten years. The energy demanded, acquired and consumed to enable such economic growth will also approximately double.
Former RBI Governor C.Rangarajan said in 2016 that “The potential to grow at 8 to 9 per cent at least for a decade exists. We have to make it happen.” Thus by 2026, with government’s concerted effort, the size of the economy, the energy consumed and global warming gases emitted for such growth would have more than doubled for India alone.
At the global level, this worldwide energy consumption (mostly of fossil fuels) year upon year, which is integral to economic growth, has resulted in atmospheric CO2 rising to 415 ppm, a level not exceeded for the last 3 million years. This is accelerating global warming and climate change, which are existential threats to all life forms. The direct cause-and-effect relationship between economic growth and global warming/ climate change is undeniable.
Maintaining corporate control
India’s New Economic Policy formulated in 1991 by then Union Finance Minister Dr Manmohan Singh, was specifically about IMF-WB orchestrated economic reform including structural adjustment, all based firmly upon unending economic growth. NEP 1991 was effectively furthered by the thousands of opinion, policy and decision-makers in governments and Indian institutions of higher education, who were trained at private foreign universities and World Bank Institutes.
These persons continue to have easy access to, and disproportionate influence in, the corridors of power in central and state governments, regardless of the political party in power.
Persons so trained were and are in positions of power at various levels in various ministries, and they promote the mindset of ideas, policies, proposals, plans and projects to yield the targeted rates of GDP growth so that India may “progress”.
This mindset has proposed and promoted capital and machine-intensive mega-projects, which need land, water and mineral resources. For this, state and/or central governments, with help from the deep state, circumvent, bypass or amend laws enacted to protect people or the environment from such projects.
Governments justify such projects by touting economic growth, a sales pitch which has always satisfied people of all political persuasions.
On-the-ground challenges by affected populations to such projects, are met with police action in favour of the corporations and against protestors. Litigation is difficult and expensive and out of reach of poor project-affected people, and in any case, usually fails.
Sometimes, the affected populations merely demand that existing laws (such as the Forest Rights Act, Panchayat (Extension to Schedule Areas) Act & Right to Fair Compensation, Transparency in Land Acquisition, Resettlement and Rehabilitation Act, 2013) be implemented faithfully, but governments usually win against the people, and corporations have their way.
People’s resistance to amendments meant to weaken such laws has even been labelled as “naxal” or “maoist” to criminalize legitimate protest, and individuals who help (the generally poor and illiterate) people affected by the project, are subjected to SLAPPs or charged under draconian laws like UAPA. The message as to who-is-boss is unequivocal.
The same economic policy has gained momentum with successive governments, and under the BJP-led NDA government starting 2014, its implementation has been intensified across sectors. Over the years, successive governments have sent top ministers travelling along with corporate honchos, to the annual World Economic Forum at Davos, to decide how to spur economic growth, and how to defeat economic competitors, even as they negotiate carbon credits and propose Sustainable Development Goals.
The “wisdom” typically brought home from Davos is that worldwide economic growth is uncertain, and growing economic inequality and climate change are worrying issues. However, questioning the economic growth paradigm is economic blasphemy.
According to a recent BBC report, the economist Dr Rathin Roy “believes that India’s rapid growth has been essentially powered by its top 100 million citizens. The leading indicators of economic prosperity, he says, are things that these Indians consume – cars, 2-wheelers, air conditioners and so on. Having had their fill of home-made goods, they have now moved to imported luxuries – foreign holidays and Italian kitchens, for example”.
Money generated by GDP growth is used for the industrialised production of goods and services,, which depends upon extraction and consumption of the supposedly “free” natural capital of resources like minerals, fuel, fresh water & land. This year-on-year (unending) GDP growth demands year-on-year increased consumption of natural capital, while the production processes produce more and more pollution of land, water and air.
Unending consumption of goods and services is highly energy-intensive and directly connected with energy use (burning of fossil fuels, principally oil). It generates greenhouse gases which cause global warming. However, the only thing that economists appear to fear is a slowing global economy because the rate at which goods and services are purchased (consumed) is flagging.
The corporate influence on economic policy has resulted in capital-intensive mega projects designed to boost GDP growth, which have countrywide and worldwide effects. The reality of sustained public protests against these projects is a part of the worry brought home from Davos.
Still, rather than addressing the causes of protests, state and central governments, influenced by the politician-bureaucrat-corporate nexus, ignore, rubbish or suppress them, by police beatings or firings, charging protestors with “war against the state” and sedition, and jailing them under draconian laws or trumped-up charges.
Another method of the PBC nexus maintaining control is the creation of the “revolving door”, by which key executives or scientists in industrial/commercial corporations are manoeuvred into government administrative posts where they influence policy, and seamlessly revert to the parent corporate sector after a tenure.
On the one hand, the Ministry of Environment & Forests (MoEF) has been re-named with Climate Change (CC) added to its designation (so now, MoEF&CC), and on the other, this same ministry is part of the PBC nexus to slacken environmental laws, rules and regulations so as to enable extractive and manufacturing industries and the hospitality industry to expand into new regions and generate profits. This increases GDP and boosts economic growth, but it is oblivious to the resulting intensification of GW and CC.
It is learned that scientists retiring or leaving the MoEFF&CC are not replaced by scientists, but by bureaucrats, who cannot apply scientific rigour to environmental problems, but uncritically obey bureaucratic and political dictats, making a joke of environmental protection.
In 2008, Prime Minister’s Council on Climate Change, Government of India, issued a 56-page National Action Plan on Climate Change (NAPCC). It states: “Emphasizing the overriding priority of maintaining high economic growth rates to raise living standards, the plan identifies measures that promote our development objectives while also yielding co-benefits for addressing climate change effectively”, and outlines eight missions and three programs for implementation.
NAPCC suffers from a fundamental conflict between the priority of maintaining high economic growth rates – which do not raise living standards but increase economic disparity – even while enhancing the ecological sustainability of India’s development path, as demonstrated below:
(#) “Maintaining high economic growth rates” (raising GDP growth rates) involves not merely higher consumption but growing rates of consumption of all sorts of goods and services. This will raise demand and consumption of oil, and inevitably result in increased GHG emissions and consequent increased GW.
(#) Promoting the present development objectives which are based upon economic growth, actually defeat measures to reduce GHG emissions and reduce the intensity of the inevitable effects of climate change. This is incompatible with “yielding co-benefits for addressing climate change effectively”.
The present economic policy and CC are incompatible bed-mates – the former cannot sleep with the window open and the latter cannot sleep with the window closed. Trying to tackle CC while actually working to sustain rapid economic growth is as illogical as trying to mop a floor dry without turning off the tap. The economic growth ideology is clearly unsustainable, and inconsistencies in the “Overview, Principles and Approach of NAPCC” display a regrettable myopia in policy.
The current economic model of endless year-on-year consumption-driven production of goods and services has serious downstream effects. Drawing endlessly on the “natural capital” of primary mineral and other finite resources for projects to boost economic growth inevitably depletes it. In turn, it adversely affects the forests, rivers and lakes, land and oceans (the “ecological capital”), which is depleted and its balances destroyed.
As natural capital and ecological capital are depleted by projects designed for the production- consumption treadmill, there is inevitable effect on people through displacement and loss of livelihood, which destroys or adversely modifies the social structure of communities and families, creating social tensions and unrest.
Peace in society is “social capital”, since development of any sort can only be successful in a peaceful society. But the “sacrosanct” economic growth paradigm results in loss of social capital and this is evidenced by the glaring, growing economic suffering and social unrest in urban, rural and forest areas.
The divergence between money growing exponentially due to year-on-year economic growth, and energy availability remaining stagnant or reducing, can result in a collapse of the financial system, ominous signs of which are manifesting in different ways.
Yet economists of all political persuasions, willing prisoners within their ivory tower of economic growth, urge the government-of-the-day to adopt urgent measures to increase consumption of goods and services, and strive for ever higher growth.
World leaders are uncomprehending or ignorant of the cause-and-effect relationship between their economic policies and large scale ecological collapse. They are unable to relate obvious negative inter-societal and intra-societal consequences with economic growth policies, being helpless in the stranglehold of the neoliberal PBC deep state.
GW-and-CC is a major consequence of the economic growth paradigm. Homo sapiens has brought itself along with a host of other species to the brink of a great extinction.
The way forward
It is not difficult to understand that tackling environmental threats is Priority One among a list of worldwide socio-political imperatives. Survival is not possible without the protection, preservation and conservation of natural resources and biodiversity, for egalitarian provision of the basic needs of water, food & energy, clothing & shelter, and health, education, welfare and employment, for all – emphasizing the word “all”.
Tackling environmental destruction and climate change faces strong opposition from the ruling US administration and ignorance/ indifference/ opposition among most other governments worldwide, since they all represent the interests of their respective PBC nexus more than that of the people whom they represent.
Defeating the entrenched ideology of economic growth involves organizing socio-political initiatives to give primacy to sectors such as energy, food, water, shelter, jobs & employment, health and education. Perhaps the most prominent is a political initiative in USA called the “Green New Deal”, which brings economics to heel in the larger interest of human societies.
The Green New Deal “will convert the old, gray economy into a new, sustainable economy that is environmentally sound, economically viable and socially responsible. It seeks to solve the climate crisis by combining quick action to get to net-zero greenhouse gas emissions and 100% renewable energy by 2030 along with an ‘Economic Bill of Rights”.
The GND sets a target year and proposes the way forward to meet that target. Unlike the SDGs (which actually encourage economic growth) proposed at Davos, the GND is practical, clear-headed and socially responsible, and deserves the most urgent study in all societies, for implementation.
Leaders and opinion-makers in societies need to acquire the practical wisdom to understand that climate change due to global warming is an existential threat to most living species and certainly to human societies.
The threat is growing, not receding.
Measures based on that understanding need to be implemented urgently, to mitigate the effects of climate change, and find an easier transition to so-called “deep adaptation” necessary for species survival.
Solutions for mitigation and adaptation as a survival route for human societies, clearly lie in rejecting the evil of unending economic growth. A good start would be to quickly adopt non-fossil-fuel-based technologies. Our lives and the lives of future generations depend on it.
S.G.Vombatkere was commissioned as an officer into the Corps of Engineers (Madras Sappers) in 1962. In 1994 the President of India awarded him the Vishisht Seva Medal for distinguished services rendered during military service in the cold, high altitude region of Ladakh. He retired from active service in 1996 in the rank of Major General.
Cover Photograph: At a refugee camp in Mumbai, a child tries to make his way during ration distribution taken for The Citizen in 2016 by photographer Zacharie Rabehi