Environment Day: Create a new social contract
Build local capacity and resilience against risks; boost a low-carbon economy for jobs, growth and sustainability
The financial package announced by Prime Minister (PM) Narendra Modi to help a desperate economy, articulated five pillars of a self-reliant India. But what kind of economy will we rebuild? How will administrative systems respond to future shocks? Will society become more resilient? This is the time to negotiate a new social contract.
Crises typically provoke three types of responses: Panic, paralysis or pragmatism. We have seen signs of the first (citizens hoarding groceries, attacking medics). We have seen the second, with delayed and confused responses to the tragedy of migrants.
In the midst of an economic and humanitarian crisis, does sustainable development have a chance? In the rush to kickstart the economy, the appetite for environmentally-sustainable choices could shrink. At the same time, historically low oil prices offer a chance to reform energy subsidies (fossil fuels get seven times more subsidy than renewables and electric vehicles in India). A fiscal boost could be tilted towards more resilient, climate-friendly infrastructure.
A pragmatic response is not foreclosed. The pandemic has driven home the lesson: Prevention is far better than cure. A new social contract must, therefore, rest on three pillars: Razor-sharp focus on tail-end risks; commitment to jobs, growth and sustainability; and a culture of discipline.
Tail-end risks have a low probability but devastating impact. In many sectors, regulations consider worst-case scenarios such as structural integrity of buildings in earthquakes. Pandemics, food shocks, water scarcity, or power grid collapse demand similar approaches. With $13 billion in estimated damage, the costliest cyclone in the northern Indian Ocean (Amphan) underscores why the tail risks of today could become the norm tomorrow. Climate risks or destruction of biodiversity hotspots are more dangerous because these risks are non-linear, rising with time and triggering a further collapse of ecosystems. There is no flattening of the curve, just a long tail of disastrous consequences.
We must first identify the worst outcomes we wish to avoid. Using best available information, administrative systems must assess direct and systemic impacts (for example, how could a water crisis trigger food shocks, migration, social instability?). Risk resilience must involve not just bureaucrats but also scientists, economists, technologists, sociologists and political scientists to assess interactions across and impacts on various human systems.
Risk assessments must be periodically reported to the highest decision-making authorities. But the focus must be on building district-level crisis response capacities (including decentralised infrastructure). The pandemic has exposed the limits to centralised decision-making without local capacity. The weakest links can unravel the best-planned responses.
A commitment to jobs, growth and sustainability can shape the recovery. First, identify sectors ripe for new investment (low-carbon infrastructure is essential) when there is more liquidity and lower interest rates. Second, with a stressed financial system, isolate project and non-project risks for sustainable infrastructure investments to combat traditional investor conservatism. Governments must adhere to contracts and pay infrastructure developers. Third, use fiscal stimulus to drive entrepreneurial ventures (rooftop renewables, sustainable agriculture, battery charging infrastructure), which leverage the latest tech and deepen local supply chains. After the 2008 financial crisis, China spent $590 billion to boost new (clean tech) industries. Fourth, use low oil prices to tax fossil fuels. In return, subsidise pollution-mitigating equipment in power plants or help micro, small and medium firms become more energy-efficient — and more competitive. Fifth, promote (green) sectors that have high employment coefficients. These include a hydrogen economy (1.9 million potential jobs), sustainable cooling (2 million-plus potential jobs), distributed energy infrastructure (already 300,000-plus jobs), clean energy-driven rural micro-enterprises, and decentralised water infrastructure.
A social contract also comes with responsibilities for citizens towards the State and each other. A society that prides itself on raucousness and a tolerance for a chalta hai attitude has a once-in-a-lifetime chance to shed its pathology of indiscipline. A new culture of discipline must rely on adherence to rules without exception, mindfulness about how individual irresponsible actions adversely impact others, and a consciousness that minor behavioural shifts can transform the landscape. Personal hygiene has wider health co-benefits; wearing masks makes us more conscious of air pollution; reducing waste and recycling natural resources create a symbiotic relationship between people and the environment.
Trust between people and the State depends on transparency, sensitivity to vulnerable communities, commitment to inclusive and sustainable prosperity, and a promise to be more disciplined. We don’t have to settle for panic or paralysis. Let us lay the foundations of a pragmatic social contract.