Sankar Ray/ kolkata
The mega-catastrophe in Nepal, triggered by an earthquake of 7.9 on Richter scale has slapped a lesson for the posterity of economists, sociologists and philanthropists. It’s time to put a halt on unbridled urbanization and so-called hi-tech industrialization. It reminds me of a famous essay by Rabindranath Tagore , Prakritir protishodh (Revenge by the Nature). The Nepal Earthquake of 25 April 2015 once again shows that direction of devastations in any mega-disasters is towards cities and their huge structures.
Not many weeks ago, a UN report, ignored by the media , inferred that very few industries would earn profit if environmental costs are included. Michael Thomas, writing on the UN report, quoted Mark Twain who famously said: “‘it’s easier to foolpeople than to convince them that they have been fooled.”
To put it blindly, the current system allows pretty much every corporation to externalize both environmental and social costs. In this connection, a study by Trucost ,which was commissioned by of The Economics of Ecosystems and Biodiversity (TEEB) program sponsored by United Nations Environmental Program, went into how the biggest industries earn money and set in contrast to 100 different types of environmental costs . Trucost examined six aspects : water use, land use, greenhouse gas emissions, waste pollution, land pollution, and water pollution. If one takes into account the externalized costs into effect, not a single of 100 industries was actually making a profit. To elaborate the point , the huge profit margins , reaped by the world’s most profitable industries (oil, meat, tobacco, mining, electronics is” being paid for against the future: we are trading long term sustainability for the benefit of share-holders. Sometimes the environmental costs vastly outweighed revenue, meaning that these industries would be constantly losing money had they actually been paying for the ecological damage and strain they were causing. “
Moreover, the study has it abundantly clear that our current regulatory system is corrupt/deficient. No time should be wasted to stop allowing companies to pretend that they are “environmentally responsible” when they are worse behaved than any child you have ever met
The study has aptly been captioned, Natural Capital at risk: the Top 100 Externalities of Business. It states, “Natural capital assets fall into two categories: those which are non-renewable and traded, such as fossil fuel and mineral “commodities”; and those which provide finite renewable goods and services for which no price typically exists, such as clean air, groundwater and biodiversity. During the past decade commodity prices erased a century-long decline in real terms , and risks are growing from over-exploitation of increasingly scarce, unpriced natural capital. Depletion of ecosystem goods and services, such as damages from climate change or land conversion, generates economic, social and environmental externalities. Growing business demand for natural capital, and falling supply due to environmental degradation and events such as drought, are contributing to natural resource constraints, including water scarcity. Government policies to address the challenge include environmental regulations and market-based instruments which may internalize natural capital costs and lower the profitability of polluting activities. In the absence of regulation, these costs usually remain externalized unless an event such as drought causes rapid internalization along supply-chains through commodity price volatility (although the costs arising from a drought will not necessarily be in proportion to the externality from any irrigation). Companies in many sectors are exposed to natural capital risks through their supply chains, especially where margins and pricing power are low.”
82-page report, available on net, monetized the value of unpriced natural capital consumed by
primary production ,covering agriculture, forestry, fisheries, mining, oil and gas exploration, utilities and primary processing industries like cement, steel, pulp and paper, petrochemicals that dominate the global economy through standard operating practices, excluding catastrophic events. For each sector in
each region , Trucost estimated the natural capital cost broken down by six environmental key performance indicators (EKPIs), and a ranking of the top 100 costs is developed from this. It also made estimates of the 20 region-sectors with the highest combined impacts across all EKPIs to provide a platform for companies to begin to assess exposure to unpriced natural capital, both directly and through supply chains And it looked into how investors expose their assets, while highlighting sector-level variation in regional exposure to impacts to identify opportunities to enhance competitive advantage.
Trucost’s analysis has estimated the unpriced natural capital costs “at US$7.3 trillion
relating to land use, water consumption, GHG emissions, air pollution, land and water pollution, and waste for over 1,000 global primary production and primary processing region-sectors under standard operating
practices, excluding unpredictable catastrophic events. This equates to 13% of global economic output in 2009. Risk to business overall would be higher if all upstream sector impacts were included. All impacts are in 2009 prices and reflect 2009 product quantities, the latest year for which comprehensive data
“The global natural capital cost of land use by the primary production and primary processing sectors analyzed by the study is estimated at US$1.8 trillion, the study noted.
The global natural capital cost of water consumption by the primary production and primary processing sectors analyzed in this study is estimated at US$1.9 trillion. The top 100 region-sectors accounted for 92% of these costs, which are concentrated in agriculture and water supply. Water that is directly abstracted from surface or groundwater is rarely paid for adequately if at all, and its substantial value to society varies according to its regional scarcity. Abstracted water was valued according to national water availability. Rates of water use take into account national irrigation rates for agriculture, which is responsible for the vast majority of global water use, and local recycling rates and distribution losses for the water supply sector. The volume of water use by country-sector was valued by applying national water valuations to calculate the social cost of water consumption. Resulting values for water use were aggregated to create a ranking of the top 20 water consuming region-sectors in terms of social cost. Water costs were significant for several sectors in Asian regions and Northern Africa. “
The global natural capital cost of greenhouse gas emissions by the primary production and primary processing sectors , is frightening : US$2.7 trillion.The top 100 region-sectors account for 87% of these costs. Impacts are dominated by thermal power production, steel and cement manufacturing, fugitive methane emissions and flaring at oil and gas wells, and energy required to supply and treat water. Coal power impacts are high in regions with significant electricity production and where coal has a large share of the grid mix, such as Eastern Asia and North America.
Its time for civil rights groups to come together and dive into an all-round campaign to save the planet from predatory industrialism and reckless urbanization.We harmed ourselves by ignoring agriculture and traditional forest villages