governance, political economy, institutional development and economic regulation

Posts tagged ‘natural resource use’

Book Review: Just erratic not deranged


Amitav Ghosh’s latest book—The Great Derangement—is an exploration of why contemporary culture, imagination and political systems have failed to prevent global warming, despite its cataclysmic long-term effects and disruptive short-term outcomes.

His choice of the book’s title reflects the conundrum facing poor nations. They are not the ones who benefited from the carbon economy. But to aspire to do this now, when there is no carbon space left, is a one-way ticket to self-annihilation. Hence, the derangement of the modern world, racing towards a future, where consuming itself becomes the only option. Curbing global warming means debunking the fundamental values on which the modern world is built. Central to this artifact is the notion that man is the centre of the universe. Non-human forces, like nature, have no place in this calculus of liberty and modernity.To recognise global warming as a problem, you first have to reject the paradigm that the unconstrained liberty of man is a leitmotif of human progress. Hence the unwillingness and the inability to face or deal with the problem.

Nature’s pawns

This is a cleverly crafted book, as would be expected from a novelist extraordinaire. Divided into three parts, it starts with “Stories”. This segment situates humans as powerless, organic sub-systems of a larger force—restless and dynamic nature. Stories of his family—climate refugees from Bangladesh; of self-doubt after a sudden, destructive tornado in Delhi; of raw beauty and sudden death in the muddy, torpid, densely tangled greenery of the Sundarbans reinforce that we are not masters of the universe.

Inequality and the urge to splurge

The second section on History, draws together three defining strands of the late 17th to the early 20th centuries. First, the availability and use of fossil fuels which were an important precondition for wealth and power. Second—the use of technology to improve productive capacity. Third—the growth of modern empires as the political mechanism for extracting the supply of raw materials; controlling access to technology and keeping overseas markets open for exported manufactured goods. Empires faded in the late 20th century but the extractive process continued. The elite—foreign and domestic—comprise not more than one fourth of the world population, but continue to become wealthy at the expense of the bottom three fourths.


The third section is on Politics. Ghosh argues cynically that so little has been done to mitigate climate change because the rich world will be able to insulate itself from the horrific outcomes. The shock will primarily be borne by the poor. Littoral countries like Bangladesh, Seychelles and Vietnam and poor communities, within countries, will be the worst affected.

A captive media

Ghosh believes the deafening silence in the media around climate change is because it has been bought out by the huge corporates who own fossil fuel assets. The silence in literature is because his peers—writers, poets and intellectuals—are bludgeoned into conformity by the formulaic path to success of shunning the unpredictable and situating a story within the predictable activities of everyday life, with the individual as the central character.

Can religion help where politics has failed?

Not much can be expected from politicians either. They are so immersed in “bio-politics”—catering to the short-term interests of a defined population of voters—that they have little appetite for long-term global risks. For what it is worth, differences in economic ideology across parties have become minimal in India. All the political parties which have ruled India since 1991 have adhered to the broad neo-liberal construct of economic development. So, quite possibly, the devil lies in the incentives created by this economic model to produce and consume in larger volumes. He cites the December 2016 Paris Agreement as subterfuge and doublespeak, promising to do much without, in effect, doing anything.

He compares this shallow and evasive, politically negotiated international agreement with the direct and forceful Encyclical Letter of Pope Francis issued at the same time. The latter fingers the ruling “technocratic paradigm” and the objectification of endless growth as the problem rather than the solution. It calls for tempering individualism with the balm of social and ecological justice. Ghosh notes that similar voices are being heard within the Hindu, Muslim and Buddhist faiths. This leads him to believe that greater community activism led by religious leaders could be the answer to mobilize opinion for definitive steps to abate global warming.


Ghosh’s stand is unusual for a secular rationalist. But this is consistent with an approach which absolves religion of its divisive outcomes. He speculates (page 150) that Mahatma Gandhi was assassinated by a former member of a Hindu party because he was perceived as weakening India by opposing industrialisation and consumerism. No references are quoted to support this “economic” explanation. The more usual view is to attribute the killing to Hindu apprehensions that the Mahatma was too politically accommodating of minority interest.Ghosh also seems to step lightly away from the conundrum that using religion for secular purposes is akin to riding a tiger, particularly in India’s surcharged environment, perpetuated by religious faultlines. Indira Gandhi paid the price for doing just that.

The world is increasingly more not less sustainable



Ghosh’s rhetoric is elegant and elegiac. His reasoning is impeccably logical. But his morbid assessment of where we are today and of our future prospects does not triangulate with reality. The world is becoming less carbon-intensive. Every incremental unit of output requires less energy than the previous one. It is true that explosive economic growth in Asia since 1980 has negated this advantage and the global mean temperature continues to increase. But renewable energy options are being developed for air, road and marine transportation, thereby further diluting the link between the use of fossil energy and economic growth. Similarly, technology developments like LED lighting have vastly improved the efficiency of energy services. Climate risk is increasingly being factored into the cost of insurance and the hurdle rate of return for investors. This will drive smart green investments.

We are winning the war on poverty

International aid agencies, governments—of which China is the exemplar, and communities, all working in tandem, have successfully reduced poverty and are on track to eliminate it by 2030. Yes, inequality is on the rise but at a significantly elevated base income level. The opening up of international trade has diluted the link between political domination and market access. Even small nations like Vietnam or Mauritius have benefited from international markets. International trade has democratised resource endowment by making petroleum, minerals and metals available to resource-poor countries. Three out of the four largest economies today—China, Japan and India—are natural resource-poor. They have grown over the last half century by importing fossil fuel and technology. None of the three tops the charts in military might.


Choice and progress

The spread and deepening of democracy has expanded opportunities for the disadvantaged and smashed earlier glass ceilings, including for women. Adoption of the open economy model has expanded imported competition while deregulation has nurtured domestic competition, for the benefit of consumers. There is more choice today than at any point in history.The world is a more peaceful place than a century ago. That this holds true despite growing sectarian violence in India’s near abroad and an increase in the number of nations armed with nuclear weapons, illustrates the high stakes everyone has in an enduring peace.

Plurality rules

Today, plural models for progress exist. These models are not country or culture specific. They are instead domain specific. Of the top 20 corporates in the world which accumulated the maximum value over the period 2009-2015, not a single company was in oil or gas; as many as eight were in technology or health care. All of them excelled at the capacity to innovate, communicate and compete. It’s a new world out there which defies explanation using traditional paradigms.

None of this means that we are on top of the problem of global warming, yet. But just as surely, there is more light visible, at the end of the tunnel, than has ever been seen before.


Adapted from the authors essay in Swarajya October 7, 2016


Accidents happen


Can accidents be completely avoided? Can our environment be monitored; analysed and controlled to make everything predictable? Astrologers will tell you they have been doing exactly this for ages. Not everyone believes them.

An astrologer has predicted that India’s next PM will be a bachelor. This had raised the hopes of Rahul, Bhenji, Amma, Didi and Naveen Patnaik. Modi has a wife and so clearly is not in this contest.

The BJP- India’s Hindu party, the one supported by “fundamentalist Hindus” and backward sadhus and sadhvis- oddly does not seem to believe in Astrology. They decided to go with Modi despite knowing that he was not strictly a bachelor. Possibly, the BJP has other in-house Astrologers who do not agree with the first prediction. But then that calls in question the science of Astrology itself, if practioners disagree on outcomes just two weeks away.

Medical “science” is no different. It junks homeopathy as being theoretically indefensible. But it has no explanation of why Buddhist lamas can die “clinically” and yet remain “alive” in the Lotus posture in which they died, with no decay of the body for years, till they decide to “leave” it. Modern science is far from the frontiers of certainty.

What about parenting? How long should you shield your growing children from risk and uncertainty? Indian parents go out of their way to protect their children as long as they are physically and financially able to do so. This is how they themselves were brought up. In a closely controlled and rigidly stratified environment this is possible. But in an “open” environment, where innovation is key, the past presents very few lessons for the future because the future bears no resemblance to what has happened. IBM did not know this and where are they today?

In the financial world, bankruptcies happen to the ”best” companies. They also result in better companies prospering against the inefficient ones. In India we still do not let companies die. We protect banks and large corporates from the risk of bankruptcy. “Industrial reconstruction” is the name of the game. It doesn’t work. Instead, such protection creates a culture of weak and fat companies like Air India and Kingfisher. These companies, which gorge on the tax payer’s money, the equity of minority investors, who are foolish enough to invest in them and our money saved in Banks, bur negligently lent to such companies as for example Bank of India. The lesson is that death, sometimes by accident, should not be averted beyond a point.

If there were no accidents and we had absolute certainty, there would be no progress, only the stillness of the grave. An apple accidentally fell on Newton’s head which lead to the theory that in the absence of balanced, countervailing natural forces the world would explode/implode.

Can there be reward without risk? The trick lies in drawing the line between the two sensibly. Merchant bankers, private equity managers, political pundits, businessmen, doctors, human resource managers and teachers and know how to balance risk and reward. For this core skill they are compensated handsomely except GP doctors, HR managers and Teachers. All three cater to the human mind more than to the dry dictates of their discipline. But science is increasingly making them redundant by progressively degrading the value of basic human skills. It is substituting human skills with more efficient machines at an alarming rate. Driverless cars and pilotless airplanes; robots on the production line; robots in shops and soon robots in the home; robots for ground level surveillance; drones in the air.

On the flip side science has also progressively reduced the risk from accidents for humans. People live longer and healthier lives but whether net productivity has increased as a result is debatable. A rigorous analysis of net economic growth after accounting from the environmental loss from negative externalities has never been done systematically in any country. It was tried in China in 2005 but quickly abandoned when the high economic growth rate got reduced to zero in some provinces.

The problem with not accounting for natural resource use is similar to a consumer overusing her credit card. For such feckless consumers a “debit card” which deducts the bank balance for every use is better. Green GDP accounting applies the “debit card” discipline to countries.

Seemingly “riskless” economic and “quality of life” benefits encourage wasteful use of resources because they appear “costless” in the near term. Climate change is an outcome of our successful endeavor to cocoon humans from want, disease and death. This has increased population to unsustainable levels. It has also made the rich across the world highly resource intensive. Delicate lives require air conditioning; motorized transport; communication networks and vast quantities and varieties of food, all of which degrade water sources, air quality and the biosphere in which we live. Bottled mineral water for drinking; gallons of water for endless showers; swimming and golf courses have made us water addicts. Our rivers and seas, air quality and land degradation can be directly related to the pressure of a growing population and an increasingly unsustainable lifestyle.

Upgrading all 7.2 billion of us to the average quality of life of the top quintile would either require a quantum leap in clean technology to outpace current population growth or very quickly degrade us to destruction. Paul Ehrlich (The population bomb. 1986) posed this question. Half a century on we still face the same conundrum.

More people live in degraded environments today than in 1965. Whilst the “environment hot spots” of 1965 in the industrialised countries have been cleaned up, the “hot spots” have shifted to more populous locations in developing countries. In 1955, air pollution was the biggest killer in Texas, US. Today smog from burgeoning automobiles and factories is the killer in Beijing. If rivers were fetid in the 1950s in the US, the Holy Ganga River is a cesspool today in India. Despite huge advances in technology since 1965, we still do not know how to give 7.2 million people the minimum acceptable standards of life within the available resources.

Economic theory tells us a young population is a demographic dividend. What it ignores is that barriers to international migration for the young into the rich world, severely limit the world demographic dividend. Meanwhile poor countries are unable to utilize the abundant volumes of young people available to them. They do not have the resources to push the young up the “skills ladder” faster than technology makes old skills redundant.

As a race we are increasingly unable to deal with nature. Modern armies have such a heavy supply chain to keep their soldiers healthy, well clad and alive that they lose out on tactical flexibility. They face the classic logistics problem Rommel faced in Africa with his tanks outpacing the supply chain. This is also why the US troops were no match for the Vietcong (1956-1975) and NATO troops have failed against the Taliban, in Afghanistan (2001-2014). Both the Vietcong earlier and now the Taliban, are comfortable living with nature and use nature to their advantage. The average GI from the streets of Kiryas Joel, New York (the poorest place in the US) does not have this advantage.

Accidents happen and they are a must if we are to keep growing. What we can do is to enhance our capacity to manage and deal with accidents.

As parents we have learn to deal with the inevitable misfortunes and misadventures of our children with fortitude.

As citizens we have to become resilient to destabilising political change by making government progressively less crucial for our welfare. We must take on the risks and responsibilities ourselves.

As humans, we need to drastically reduce our foot print on nature and learn to live with personal discomfort; the loss of loved ones and shifting fortunes with equanimity.

At the end of the day all anyone wants is to lie on the beach with a drink at hand; or get our lunch ourselves from the fruit trees, vegetable garden or the river next door. We must not fool ourselves into imagining that this idyllic life comes without the need to swat flies and mosquitoes; avoid snakes, rats and lizards or sans sweat, cold or fever.

The price of accidents is discomfort. The benefits are sustainable life. Choose wisely. How long can we observe nature through a protective plate glass?


Tag Cloud

%d bloggers like this: