Economy

Gambling Between Cost and Benefit

Because wherever we live, whoever we are, we all share the same responsibility. Make our planet great again -Emmanuel Macron

These words reflect a powerful recognition of mutual responsibility and positive attitude towards environment. Emmanuel Macron has rightly stressed upon the need for responsible attitude towards environment in making it great again. Human beings have degraded the environment for the sake of ease and comfort. It is time to build a mutually sustaining, contributing and enduring human-environmental relationship. Over the period of time, the world has witnessed major environmental disasters which caused great repercussions in both the environment and the economy. Although the much sought after and debated phrase—Sustainability and Future Generation—is still in vogue, sometimes it takes real life experience for human beings to rethink their responsibility towards making better environmental decisions.

Modern day developmental projects and innovations highly focus on economic feasibility and aim at reducing the cost and gestation period of big budget projects. The focus is only on producing efficient output. Often, these developmental projects are not economical in the real sense. Many of the developmental projects have compromised on the environmental cost. The structural transformations that began with the second Five Year Plan have completely altered the proportion of forest cover in India. Increased urbanisation and industrialisation resulted in huge environmental degradation and pollution. Although the economic growth stimulated by deforestation was very high, its implications on environment were much larger. The increased use of plastic bags and non-biodegradable products has increased the stress on environment.

In spite of awareness raising efforts, many of the large scale projects still ignore the environmental cost. Although highways can be constructed at reduced environmental cost by reducing the number of trees felled along the roads or by choosing routes that circumnavigate the forest area, the idea of reducing environmental cost is rarely considered by the project creators. The discounting principle often goes opposite in the case of environment. The future cost when discounted gives very little motivation for the people to act differently. This is largely because of the pleasure inflicted by the short term but direct benefits that the society gains. This is when the real economics of environment and disaster came into picture.

The Kerala flood is one of the most recent examples to bear in mind. Although the rescue operation and rehabilitation went successfully, gaining praises and admiration, the economic side of the disaster has to be well understood. The present Ernakulam district of Kerala was once a marsh and it was irrevocably converted to residential and industrial areas. Likewise, many of the lower lands and marshy terrains were artificially elevated and restructured. In the case of other districts, especially in the case of hilly areas, the situation is not different. The major proportion of the population is situated in the environmentally sensitive areas that are highly prone to landslides and earthquakes. Then the question arises—where to accommodate this growing population? Even then the answer should not be at the cost of the environment. Development and progress must proceed, but at a lower cost of environment and giving lesser stress to the future generation.

Climate change and global warming are not the result of the actions of the current generation alone. We are sharing the responsibility for the irresponsible behaviour of the previous generations. The cost of development and innovation at a higher environmental cost for increased current benefit and reduced current economic cost has in fact reduced the future benefit and increased the future cost to a multiplied rate. Also, a study of the performance of developing and developed economy shows a paradoxical result. The loss associated with environmental disaster is comparatively lower in the high incoming countries, thanks to their highly prioritised welfare schemes and policies. But many of these large economies also are the highest contributors to environmental pollution.

America’s withdrawal from the Paris Climate Summit is just an evidence for the selfish motives of economies. But the idea of environment as a public good shouldn’t be ignored. Also the positive response of a country towards environment will make other countries beneficial to the benefits of better environmental conditions and vice versa. Sometimes the environmental disruptions are largely propelled by the developed economies. However, the blame falls on the lower income countries and other environmentally affected countries, due to their ineffective political tackling and geographical locations. Thus, the costs of extreme events reflect not just the environmental conditions but the global distribution of wealth and income.

Hence, towards this cause, a more sustainable and sensible approach has to be taken. Wherever there is human intervention, there is a cost associated to it as well. Development and progress must proceed, but it should not be at a high future cost. There is a huge amount of opportunity cost associated with this future cost. Ideally, money spent on ambitious projects can be better diverted into more necessary sectors like the education, healthcare, welfare schemes, poverty alleviation, research and development, etc. Policies must focus on mitigation as a priority and adaptation as a necessity. Let the economical policy decisions be more eco-conscious and work towards building a sustainable society.

Picture Credits : carrolpqplearning.wordpress.com



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