Green environment, clear skies, clean water! For most of the cities, which followed the path of rapid growth and development, these were the sacrifices they made. The wave of industrialization started back in the 17th century but the harm done to the environment by rapid industrialization came to lime light only in the 1970’s. Going forward, a slew of laws, regulations and treaties were signed globally to ensure that the global policy makers keep the environment at their mind and heart while making major decisions. While most nations are now aiming and striving to trace a more sustainable path to development, for developing countries balancing the economic progress with an interest to the environment remains an ardent task. Most believe that economic growth and environment are like two opposite sides of a coin or like two fag ends of a rope, which cannot meet. However, a less popular opinion does exist, where some economists are of the view that economic growth is followed by an improvement in environment quality and when nations are economically well off then they start to care about the environment also.
Dr.Sabuj Kumar Mandal and his team at IIT Madras have been particularly interested in understanding this complex relationship between economic growth and the environment. In their latest study, which is published in the prestigious international journal Environmental and Sustainability Indicators (Elsevier), Dr. Mandal and his student, Dr.Devleena Chakravarty have presented their empirical findings on the relationship between economy and the environment in the context of selected developing countries.
“Achieving economic growth in a sustainable way-without putting much pressure on the environment- is the challenge that global economies are facing. This is even more challenging for developing economies since environmental protection is not their policy priority amidst the presence of wide-scale unemployment and poverty. Therefore, developing economies cannot afford to bring stringent environmental regulation in place to protect the environment. The proponents of Environmental Kuznets Curve (EKC) hypothesis, however, advocate that growth is actually a cure for environmental problems, rather than being a cause of it. In their view, environmental problems escalate at the initial phases of growth; it declines thereafter once a certain level of income is achieved by the economies,” says Dr. Mandal, Assistant Professor at the Department of Humanities and Social Sciences, IIT Madras and the corresponding author of the research paper.
In their research, the team was particularly interested in understanding whether the economic progress makes a positive or negative impact on the environment efficiency which leads to produce more output with lower level of emission. The researchers sought out to find if the society of developing and progressive nations are adopting cleaner technologies to protect the environment or are progressing further without paying any heed to the environment.
For this study, the researchers calculated environment efficiency in terms of carbon dioxide and sulfur dioxide emissions; the more of these emissions meant less environment efficiency. They took average environmental efficiency scores in terms of carbon dioxide (CO2) and sulfur dioxide (SO2) and correlated it with the average gross domestic product (GDP; a measure of economic condition) per capita of more than 15 developing countries such as India, Kenya, Brazil, Malaysia, Indonesia etc. from the period 1992–2011. The results of the study showed that the relationship between environmental efficiency in terms of CO2 per capita yields an “inverted N shaped” relationship with economic growth whereas SO2 have an insignificant impact of growth on efficiency.
“Our empirical findings show that while growth, to some extent, could be a solution to environmental problems caused by the global pollutant, CO2, it is not so for the local pollutant, SO2. Countries must adopt local level policies like, proper planning for urbanization among others, to control the emission of local pollutant,” adds Dr. Mandal.
All in all, the study concludes that in developing countries the economic progress is not being followed by the environment wellbeing or the Environmental Kuznets Curve hypothesis is not fully applicable in such contexts.
“The article is extremely important as it has the necessary scientific rigor in methodology, the evidence base is reliable and findings are policy-relevant. In the conclusion, why foreign direct investment should be linked to environmental performance indicators in host countries so that demand for cleaner production technology increases within developing countries and economic growth can be detached from emission, is well articulated. Developing countries will need to continue to grow in terms of per capita income for the next couple of decades and depend on foreign direct investments. So the findings of this study can inform both the recipient and remitting countries to revisit their policies. Also, this can be included in any negotiation mechanism for global cooperation. This is an ideal study which shows how economic and environmental policies can go together and need not be in contradiction to each other,” comments Prof. Joyashree Roy, Bangabandhu Chair Professor at the Department of Energy, Environment and Climate Change, Asian Institute of Technology Bangkok, who is an expert in this area.
Dr. Mandal’s team is all geared up for the next phase of this study. While in this study, they combined all the economies to carry out analysis, in the next phase they aim to take heterogeneity between countries in consideration while carrying out the analysis. Other than that, they are also interested to include more countryspecific factors like environmental standard,composition and structure of industries, the share of renewable energy, research and development for clean technologies etc. to explain the intercountry variation in emission and environmental efficiency.
Article by Aditi Jain
Here is the link to the research article: