The Indian economy is a bright spot in an otherwise bleak global economic landscape. It is the fastest-growing major economy, ahead of a persistently slowing China. It is now one of the most attractive destinations for foreign direct investment and the sheer scale of its expanding consumer market whether for smartphones or digital devices, motor vehicles or fine wines and spirits, makes it an indispensable destination for multinational companies.
But, this optimistic outlook is built on the shifting sands of a resource-constrained world and an ecological crisis that are overturning the basic assumptions underlying development strategies spawned by the industrial revolution in Europe more than two centuries ago.
Despite technological advances and human ingenuity, development remains anchored in a resource and energy-intensive pattern of economic activity, both in production and consumption processes. Its underlying assumption is one of unlimited resources, through expanding extraction and more efficient use of existing resources through constant technological innovation.
This was a realistic assumption when only a small cluster of countries, constituting a fraction of the world’s population, embarked on the path of industrialisation. They had access to resources throughout the world, initially through imperial conquest and colonisation and later, in a world of independent and sovereign states, through the establishment of an international economic and trading order, which preserved access to resources and markets. This enabled, over time, affluent lifestyles based on mass consumption. These inevitably became the aspirations driving growth in developing countries.
As development impulses spread beyond the original cluster, particular to highly populous, large and continental size economies such as China and India, the implicit assumption of unlimited resources that can enable the replication of those lifestyles in large developing countries is no longer valid. For example, not all the oil resources in the world would support a density of private car ownership in India as prevails in the US — 900 per thousand or even Europe — 700 per thousand. If India’s population reached 1.6 billion in 2050 then an American norm would translate into 1.4 billion cars on Indian streets. Even a fraction of this would, in the Indian context, be completely unsustainable.
India is also facing acute water stress even at a fairly low level of development and yet its agricultural growth strategy remains water, fertiliser and pesticide intensive. Persisting with this strategy will undermine water as well as food security for future generations.
There is another reason why India needs to re-look at its development strategy. It is committed to the 2015 Paris agreement on climate change that will require an early shift from fossil fuel use to renewable sources of energy and cleaner sources such as nuclear energy. It is also committed to the 17 sustainable development goals (SDGs), which, for the first time have made ecological sustainability an integral and indispensable element of each such goal.
More recently, India also signed on to an early elimination of hydrofluorocarbons, used in the rapidly expanding refrigeration and air-cooling equipment industry. Similarly, it has also agreed to a more rapid reduction in carbon emissions from its aviation sector. This will be a major economic burden since like refrigeration and air-conditioning, it, too, is a rapidly expanding sector of our economy. Therefore, even as our development imperatives are becoming more urgent, the international environment is becoming a progressively more limiting factor for our choices. We can expect neither adequate finance nor technology from advanced countries to support the adjustment we need to make. How do we deal with this challenge?
One, we need to acknowledge that our development strategy is neither compatible with the international commitments we have taken on, nor, more importantly, with the goal of ecological sustainability.
The toxic air of Delhi is an early sign of dangers of persisting with this strategy. We need to pioneer a different approach to growth, an approach that is resource-frugal, which makes a quantum shift from fossil fuels to renewable and cleaner sources of energy, and which prioritises conservation over consumption.
This will require a new accounting practice reflecting the changed priorities. For example, pricing a tree left standing in the forest over a tree that is felled as timber or discouraging private transport and investing in public transport using fiscal instruments. Two, we will need to change the concept of affluence away from the resource-guzzling and waste-generating definition that drives economic processes. Having fresh air to breathe, clean water to drink and a green earth to walk on should as much be components of affluence as are goods available to consume.
Three, the country will have to embrace the concept of circular economy, which means adopting “the 3 Rs” — Renewables, Recycling and Re-Use. This necessitates pursuit of zero waste and zero discharge in production and consumption processes.
Our energy systems must shift from the use of fossil fuels to renewable sources. We should create an economic system in which waste from current production and consumption processes is recycled to produce serial generation of usable products. And, we must abandon a culture which values the instant and the disposable more than it does durability and re-usability of products.
More than a shift in economic strategy, India needs a cultural shift and mindset change back to a value system bequeathed to us by our forebears — to look upon nature as a source of nurture, not an object of conquest, never to take from the planet more than it has the capacity to regenerate and above all, a sense that we must bequeath to succeeding generations a world which can sustain life in all its wonder and diversity as we have been privileged to enjoy.
Shyam Saran is a former foreign secretary. He was the prime minister’s special envoy on climate change, 2007-10