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
were available.”
“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
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