Written by Nikita Banerjee, a final year international affairs student.
Edited by Luvya Khushlani, a first year economics student.
Credit: Open Source
Abstract: This paper would aim to trace the relationship that India’s economic growth and subsequent per capita income share with its environmental development level, or lack thereof. The Environmental Kuznets’s Curve studies the relationship which developing countries share between their per capita income and the level of environmental deterioration they are willing to incur for the same. As per the theory, countries choose to develop to a level where they can withstand environmental damage. Post reaching their aspired economic standing, they choose to ‘clean up’, with the resources they then possess. This paper, in particular, would delve into the Indian case study which becomes important for two reasons. Firstly, India is not yet a developed country, it is still on the journey of development which situates it at the mode of the Kuznets’ Curve. Secondly, with the recent Covid-19 pandemic, it was the need of the hour to produce plastic-based goods (PPE kits, vaccines, masks, gloves) at industrial levels, leaving no scope to look after the environment at a choke point in medical history. Therefore, this paper would attempt at understanding India’s future course of action with the effect of the aforementioned factors acting upon it at this time.
Thesis:
Be it in a directly or inversely proportional relationship, environmental degradation and economic growth of a country’s economy cannot be disengaged. This mutual elasticity can particularly be seen in India under the effect of the Covid-19 pandemic.
In the past few years, India has begun to emerge as one of the fastest-growing economies within the developing countries’ circuit[1]. The Environmental Kuznets Curve seeks to trace a (negative) relationship between the level of economic development a state achieves, with respect for the pollution it incurs in its environment. Understandably so, most of the pollution that the country puts up with comes from its industrial sector, at the time of expanding its economy and establishing greater sources of a higher per capita income for the country’s workforce[2]. Owing to this fact, the Covid-19 pandemic showed a (temporary) slowdown in the number of emissions produced by India’s industrial sector. Since production and manufacturing both had come to a temporary halt due to the unforeseen medical crisis, the number of pollutants released into the environment decreased proportionally too. However, it was understood that such a sudden reduction in the number of pollutants being expelled into the environment was not sustainable or efficient. It was a temporary reduction in the inverse environmental impact of rapid economic growth, which showed that the Covid-19 pandemic did not aid in any controlled carbon dioxide levels. The carbon dioxide levels go on increasing in the environment due to continued economic activity over a course of time. Hence, a sudden or even a short-lived reduction or slowdown in the industrial process of a developing country cannot help bring about a sustained impact on the carbon dioxide levels in its environment. Despite agreeing to the Kyoto Protocol of 1997, India has not been able to stop its carbon dioxide emissions from increasing at an increasing pace. As can be seen in the graph below, South Asia is only second to the Middle Eastern (or West Asian) countries in terms of its growth of financial mitigation investments, which in turn harbour greater carbon emissions.
Figure 1: Finance flows and mitigation investment (Source: The Closing Window: Climate crisis calls for rapid transformation of societies. (2023, February 14). UNEP p. XXVII.
Gene M. Grossman and Alan B. Krueger (1991) had very famously researched the hypothesis that low industrial activity will lead to low environmental damage as well. However, with recent developments in India, this hypothesis can be questioned, considering the hard-to-comprehend nature of CO2 and NO2 emissions in the environment, especially after the effect of the pandemic. At the same time, India’s CO2 emissions did fall by 30% in 2020 for the first time in the past forty years, based on the Centre for Research and Clean Air’s 2020 report. This brings to light the fact that different industrial sectors may be diffusing different intensities of CO2 into the environment, which is why such a steep fall in the emission levels came to be noticed. Even with their initial analysis of the EKC, Grossman and Krueger, while looking into the North Atlantic Free Trade Agreement, maintained that sulphur dioxide and smoke increase with the GDP only at a low national income level, and vice versa. Therefore, these pollutants, though severe in nature, cannot be blamed in the industrialisation process of a country as much as CO2, for whom institutions and policies must be put in place to be controlled by economic growth based on Grossman and Krueger’s analysis. How fossil fuels are used frivolously in the industrialisation of an economy further adds to the increased CO2 emissions, owing to the manner of their composition.
Considering the aforementioned factors, it can be deduced that India is an exception to the study of EKC since it does not conform to all of its previously understood requisites. However, even if not due to industrialisation directly, the effect of employing labour and in turn, its effect on the population produces similar results for the environmental condition and quality in India, a heavily labour-intensive economy.
In a research conducted by Marco Mele and Cosimo Magazzino (2020), they conducted a data source and series analysis of annual data from 1980 through 2018, determining the causal relationship between CO2 emissions, PM2.5, NO2, and their subsequent impact on GDP. The results of their study concluded the fact that the EKC is bell-shaped (U-shaped curve), or that how economic growth initially remains constant, then increases to finally decrease and remain constant. Another shocking relation between the concentration of PM2.5 and the Covid-19 pandemic in the Indian case study is the one-way causal link between the PM2.5 concentration and deaths due to Covid-19. This is because great or prolonged exposure to fine particles in the air can adversely affect one’s lungs, possibly leading to an inflamed respiratory tract or even chronic effects. Hence, PM2.5 concentration has shown a 15% increase in the death rates due to Covid-19, making a person’s immunity more vulnerable. In particular, cities such as New Delhi and Mumbai were affected the worst by the pandemic. This circles back to the point that these cities are involved in one of the highest levels of (industrial) trade and generation, including modes of imports and exports for India. The level of economic growth and development which India harbours through these cities is magnanimous, which can be seen reflected in the mortality rates in these cities. Furthermore, even though the environmental condition of India relaxed initially due to lesser industrial activity, it was a temporary stoppage, and it did not have long-lasting or efficient results. Furthermore, the development of vaccines, masks, gloves, and PPE kits were also plastic-intensive production processes, which also added to the plastic pollution in soil and water. This was the need of the hour which could have not been paused, but the repercussions of whom have simply added to the already long-standing environmental deficit India has chosen to undertake to develop economically.
A few possible solutions to the issues highlighted above could be as follows. Firstly, the machinery and the vehicles adopted for imports and exports, or the general supply chain production lines should be that of less emissive technology. Furthermore, Indian farmers form the backbone of the agricultural economy and the profits which India makes each financial year. Hence, these farmers should be educated about and encouraged by the centre to practice sustainable and natural fertilising methods, streamlining the effects of chemical-free fertilisers on soil. Furthermore, to control the effects of EKC on India, the green cover could be increased to capture the dust which would in turn reduce the pollution levels in the environment. Alternatively, there should be more focused policy implementation regarding waste management and emission limits in states to maintain a healthy environment while industrialising.
In conclusion, one can see how environmental degradation and the economic growth of a country’s economy cannot be disengaged. Be it through direct or indirect means, economic growth has an impact on the environment in one way or another. What makes the Indian case study so exceptional is the fact that in certain aspects, it serves as a perfect theoretical blueprint of the EKC hypothesis while in the rest, it is an amusing challenge to long-standing economists and their research. Therefore, the Covid-19 pandemic can be seen as one of the most (recent) prominent factors which have had an impact on the manner of mutual elasticity[3] that environmental degradation and economic growth of that country’s economy share.
References
Mele, M., & Magazzino, C. (2020). Pollution, economic growth and COVID-19 deaths in India: Machine learning evidence. Environmental Science and Pollution Research, 28, 2669-2677. https://doi.org/10.21203/rs.3.rs-40851/v1
Villanthenkodath, M. A., Gupta, M., Saini, S., & Sahoo, M. (2021). Impact of economic structure on the environmental Kuznets curve (EKC) hypothesis in India. Journal of Economic Structures, 10(1). https://doi.org/10.1186/s40008-021-00259-z
The Closing Window: The climate crisis calls for the rapid transformation of societies. (2023, February 14). UNEP. https://www.unep.org/resources/emissions-gap-report-2022?gclid=EAIaIQobChMIxY7s0aa9_QIV0RxyCh0rMw0NEAAYASAAEgK5ZfD_BwE
[1] (Mele & Magazzino, 2020, p. 2669) [2] It refers to the number of persons actually working. This measure does not include those persons who are willing to work but are not getting work. (Source: https://byjus.com/question-answer/explain-the-meaning-of-labour-supply-labour-force-and-workforce/) [3] Elasticity is the measure of the responsiveness of one economic variable to another. (Source: https://www.britannica.com/topic/elasticity-economics)
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