The Economics of Nature

Over the last 20 years, the Indian economy, driven by a reforms programme that has focused on building industry and infrastructure, has grown at an enviable pace. Progress, however, has come at the expense of the environment; thereby rendering the growth phenomenon an unsustainable one. In India, and in many other countries, environmental concerns are often regarded as an issue that can be tackled in the future, once growth has borne all of its fruit and poverty is eradicated. By and large, ecosystem degradation is considered a rich country's burden with the developing countries taking the view that scarce resources must first be invested in industry, infrastructure and technology, rather than in environment protection. This approach needs to be reviewed on two counts. For one, the environment has a large role to play in sustainable growth, which is the avowed objective of all nations and, second, not factoring in the cost of ecological degradation leads to growth figures that are unrealistic and inflated. We believe that keeping the environment subordinate to overall economic success does not pay in the long run. Likewise, countries in pursuit of sustainable development will find that it is impossible to maintain growth while the environment threatens to collapse.